CMP-252

The 'MAHARATNA' company earning profits since 1971-72 and paying great dividends since 1976-77. Though the order book is sound at 1.1 lakh crore and growing, the slowdown in power sector and troubled coal fields had put pressures on this company.A record turnover of 50,000cr in 2012-13 saw a dip to end with just over 40,000cr 2012-14. 

It operates majorly in power, transmission and defence. it is a manufacturer of a range products and systems for thermal,gas,hydro and nuclear-based utility and captive power plants. It is also a manufacturer of range of industrial systems and products. The company is currently in execution on four turbines of 700MW for Nuclear Power Corporation, a 500MW solar plant and an 185million manufacturing unit for commuter rail system

Many opportunities exist in naval guns, field gun, aero engine technology and multi-million dollar projects that the Ministry of Defence has. The BHEL-HAL (Hindustan Aeronautics Ltd) joint venture is in initial stages for developing aero engine technology.It aims for development and manufacture of the indigenous field gun for the Ministry of Defence.

The company is expected to ride big on MODI govt focus on Power and FDI in Defence, both which would provide this company much higher valuations. though the stock has already seen a run up of 40% it is still far below 2010 levels of 2560.

Trading at just 17x PE multiple right now, this is a gem to buy right now with limited downside and mutli high upside in 2-3 years.

BHEL has a fine management looking to revive the fortunes of the company

For more news http://www.thehindubusinessline.com/companies/competition-from-china-is-no-longer-a-threat-for-bhel/article6160121.ece

Recommend to buy at current levels