BHEL; 438% returns in 5 years; Revenue Growth 11.33%; Why not to invest ?
Company Snapshots
- Bharat Heavy Electricals Ltd (BHEL) is an integrated power plant equipment manufacturer, controlled by the Govt. of India
- Engaged in design, engineering, manufacture, erection, testing, commissioning and servicing of a wide range of products and services for the core sectors
- Equipment for sectors such as Power, transmission, Industry, transportation, renewable energy, Oil & Gas and defense.
- BHEL accounts for ~53% of India’s total capacity of utility power projects.
Revenue Breakup
BHEL has 2 major Revenue sources
- Power Sector (~76% of revenues): The company has capabilities to manufacture the entire range of power plant equipment including thermal, gas, hydro and nuclear power projects.
- Industry Sector (~24% of revenues) : various products/ solutions for various sectors viz. transportation, renewables, defence & aerospace, energy storage solutions
Fundamental Analysis
Key Ratios
| Market Cap | ₹ 1,09,755 Cr. |
| Current Price | ₹ 315 |
| High/Low | ₹ 335 / 94.8 |
| Stock PE | 389 |
| Industry PE | 62.6 |
| ROCE | 2.97% |
| ROE | 1.10% |
| PEG Ratio | -17.5 |
| Debt To Equity | 1.65 |
Financial Trend
Revenue: 5 Year Comparison
Revenue Growth 11.33%
- 2020: 21,463 crore
- 2024: 23,893 crore
- 5 Year Percentage change: 11.33 %
Net Profit: 5 Year Comparison
- 2020: -1,466 crore
- 2024: 282 crore
- 5 Year Percentage change: 119.23 %
Shareholding Pattern
Change in Shareholding Pattern
| Mar-23 | Jun-24 | 1 Year Change | |
| Promoters | 63.17% | 63.17% | 0.00% |
| FIIs | 8.58% | 9.10% | 0.52% |
| DIIs | 15.50% | 15.03% | -0.47% |
| Public | 12.76% | 12.71% | -0.05% |
Stock Price Returns
1 Year Stock Returns
- BHEL has given 1 Year returns of 205.05 %
- 1 Lakh invested in July 2023 would have become 3.05 Lakhs in June 2024
5 Year Stock Returns
- BHEL has given 5 Year returns of 438.88 %
- 1 Lakh invested in July 2020 would have become 5.38 Lakhs in July 2024
Company Valuation
- Current PE- 389
- Median PE- 36
- Company is Highly Overvalued: As the Median PE is less than the Current PE, so we can say that company is company is overvalued.
Why not to invest ?
- Currently 5 years Revenue Growth stands at 11.33 % & 5 years Stock returns is 438% which is not justified
- BHEL is currently trading at 11 times its median valuation which is PE=389, this is a really high valuation.
- There are some PSU companies without strong fundamentals are trading at higher valuation (BHEL is one of them)
- Even the company’s net profit is not consistently increasing for the past 5 years & here stock price is consistently increasing.
- This is not the right time to invest heavily in this particular company when it is trading at such a higher valuation.
- If you are invested in this company then it would be advisible to book some profit & keep very limited percentage.
Check Out this- How Titan turned 1 lakh into 8.8 crore
Disclaimer
- Money Minded School is not a SEBI registered investment advisor, Please do your own research before investing
- This article is a complete guide about Bharat Heavy Electricals Ltd (BHEL)
- These information and forecasts are based on our analysis, research, company fundamentals and history, experiences, and various technical analyses.
- Also, We have talked in detail about the share’s future prospects and growth potential.
- Hopefully, this information will help you in your further investment.
- If you have any further queries, please comment below. We will be happy to answer all your questions.
- If you like this information, share the article with as many people as possible
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