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

1. 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.
2. 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.
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