BHEL Q1 Review – Improving Prospects For Coal-Based Power Capacity: ICICI Securities


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Bharat Heavy Electricals Ltd.’s Q1 FY23 revenues grew 61% YoY to Rs 46.7 billion led by 67% and 52% YoY growth in power and industrial segments, respectively.

Raw material ‘cost to sales’ proportion remained elevated at 70% versus 67% in Q1 FY22. Improved execution and control over fixed costs helped narrow Ebitda loss to Rs 1.7 billion from a loss of Rs 4.7 billion in Q1 FY22.

BHEL’s order intake was at Rs 25 billion, taking the orderbook to ~Rs 1 trillion (4.3 times trailing twelve months sales). However, as per NTPC Ltd.’s recent announcements in annual analyst meet, it plans to add six gigawatt of brownfield thermal capacity.

Given the ongoing global energy crisis, we expect NTPC’s capacity addition plans to translate to orders in the near future. We are keenly monitoring pickup in flue gas desulphurisation tendering for non-NTPC coal plants as well.

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