Low Base Effect May Aid BHEL In The Second Quarter
Bharat Heavy Electricals Ltd. is forecast to report strong profit growth in the July to September quarter on the back of low-base effect, while sales may rise 10.8 percent powered by a pick-up in execution.
Net profit is expected to rise to Rs 59.3 crore in the second quarter of the financial year 2016-17 compared to a loss of Rs 204.9 crore in the corresponding quarter of last year, according to Bloomberg consensus estimates. Low base of profitability should lead to optical improvement, however, absolute profitability is likely to remain elusive, ICICI Securities said in its note to clients.
Net sales is expected to grow 10.8 percent to Rs 6,466.4 crore, according to an average of analysts estimates tracked by Bloomberg. Sales are forecast to decline 88.7 percent on a sequential basis.
Revenue is expected to rise as execution in some of the slow-moving orders have picked up. In the transmission and distribution space, the company is expected to deliver 10 percent growth in revenue on the back of strong orders, both in international and domestic markets, India Infoline Private Wealth Management said in a report.
Earnings before interest, tax, depreciation and amortisation is likely to come at Rs 67.8 crore against a loss of Rs 474.2 crore in the corresponding quarter last year.
What To Watch
Management commentary on ground-level improvement in industrial capital expenditures and the outlook on new order inflow and price realisation will be keenly monitored in the capital goods sector, Nirmal Bang Institutional Equities said in its note to clients.
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