28 April 2014
Update | Sector: Capital Goods
BHEL
BSE Sensex
22,688
S&P CNX
6,783
CMP: INR191
TP: INR240
Buy
Cyclical factors support recovery
Strong operating leverage and FCF improvement to drive re-rating
Stock Info
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
M.Cap. (INR b)
M.Cap. (USD b)
BHEL IN
2,447.6
208/100
-5/29/-18
466.9
7.7
Financial Snapshot – Consol. (INR b)
Y/E March
2014 2015E 2016E
Net Sales
396.2 325.4 358.4
EBITDA
PAT
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div Yield (%)
13.2
1.4
8.5
2.2
19.7
1.4
9.7
1.6
12.7
1.3
5.6
2.4
47.4
35.2
14.4
33.9
23.7
9.7
47.5
36.6
15.0
BTB has inched up to 2.5x in FY14: a key trend driving cyclical factors
During FY14, BHEL’s BTB inched up to 2.5x (from lows of 2.2x in September
2013). Also, Power segment BTB had improved to 2.5x in FY14 (from lows of
2.3x in Sept 13); we expect bounce back to 3.0x in FY15.
Industrial order intake was up 23% YoY in FY14. R&M and International
segment also witness 19% / 28% YoY increase in order intake.
Focus on cash realization led to a cash surplus situation after a gap of 4
years in FY14; also the rising trend in debtors had been arrested.
We believe that improvement in BTB is an all important trend for capital
goods companies, and has ramifications on several cyclical components
including working capital, operating free cash flows and operating leverage.
(46.2) (32.7) 54.5
133.4 139.7 149.4
11.2
11.5
30.0
7.1
7.4
30.0
10.4
10.6
30.0
Strong operating leverage, cyclical factors support recovery
BHEL is strongly exposed to cyclical factors: i) Contribution margins at ~42%
vs expected EBIDTA margin of 12.4% (adjusted) in FY14, leading to a
meaningful operating leverage ii) Core NWC stable at ~200 days; cyclical
factors of Retention money (at ~200 days in FY14E vs 55-60 days in FY07-09)
and customer advances (deteriorated from 63% of revenues in FY09 to 34%
in FY13) that impacted reported NWC are expected to normalize.
Thus, we expect Operating Cash Flows to improve from average of ~INR20b
in FY10-13 to ~INR92b in FY15/16E. This will lead to an increase in net cash
from INR63b in FY13 to INR209b in FY16E (~46% of current market cap).
Shareholding pattern (% )
As on
Dec-13 Sep-13 Dec-12
Promoter
Dom. Inst
Foreign
Others
67.7
12.0
15.9
4.5
67.7
12.0
15.5
4.8
67.7
12.5
15.1
4.7
Binary trends support execution, focus shifts on public sector
We analyzed each of the private sector projects in BHEL's order book to gauge
the possible trends in execution. We calculate that unexecuted private sector
order book stands at ~INR255b (~30% of power sector order backlog). Of this,
~INR179b are non-moving / slow-moving, and of the balance INR75b private
sector backlog, we calculate that this corresponds to just ~20% of the initial
order value. Thus, the focus increasingly shifts towards public sector projects
(both Central and State sector) and is positive as private sector faces several
headwinds in project execution, including funding and viability issues.
Stock Performance (1-year)
Maintain Buy
We expect BHEL to report EPS of INR14.4 in FY14 / INR9.7 in FY15E / INR15 in
FY16E. At the CMP of INR191, the stock quotes at PER of 13.2x FY14E / 19.7x
FY15 / 12.7x FY16E. Maintain
Buy
with price target of INR240 (PER of 16x
FY16E). The key variable to watch out for is the impact of the Pay Commission
(effective January 2017), and could be an important swing factor.
Satyam Agarwal
(AgarwalS@MotilalOswal.com); +91 22 3982 5410
Nirav Vasa
(Nirav.Vasa@MotilalOswal.com); +91 22 3982 5422
Investors are advised to refer through disclosures made at the end of the Research Report.

BHEL
BTB improvement in FY14: key trend driving cyclical factors
During FY14, BHEL’s BTB has witnessed a cyclical uptick to 2.5x (from lows of 2.3x in
September 2013). The management stated that the focus on cash realization has
resulted in coming back to cash surplus situation after a gap of 4 years; also the
rising trend in debtors has been arrested. Thus, improvement in BTB is an all
important trend for companies in the capital goods segment, and has ramifications
on several components including working capital, operating free cash flows and
operating leverage.
#1
Power segment BTB inches up to 2.5x in FY14 (from lows of 2.3x in Sept 13);
expect bounce back to 3.0x in FY15
For BHEL, power segment BTB had more than halved from peak levels of 5.2x in
3QFY09 to 2.3x in September 2013. Based on the FY14 provisional numbers, we
calculate that the end FY14 BTB has possibly inched up to 2.5x, and we expect the
number to bounce back to 3x in FY15E. This is driven by possibility of increased
order intake, particularly in the power segment, from average levels of INR220b in
FY12-14 (gross intake, excluding order cancellations) to average of INR260b in
FY15/16E. Over the past three years, BHEL has expanded its offerings in the power
segment meaningfully and will also enable the company to capture a larger share in
project execution, going forward.
Expect power segment revenues to improve 9% YoY in FY16,
FY15 revenues down 33% from peak levels in 2QFY13 (ttm)
Power Rev (INR B, ttm)
% YoY
We expect power segment
BTB to bounce back from
lows of 2.3x in Sept 2013
currently to 3x in FY15E
Expect BTB to bounce back to 3x in FY15, from lows of 2.3x
in 2QFY14
Power Orderbook (INR B)
BTB (x)
Source: MOSL, Company
Source: MOSL, Company
BHEL has expanded its power sector offerings meaningfully over past three years
Year
FY14
FY13
FY13
FY13
FY13
FY12
FY12
FY12
Increased Offerings, Technology Licensing’s, etc
Commissioned Critical piping / Heavy Boiler parts factory at Trichy
Expand offerings in nuclear for BOP, Control centre instrumentation etc
Marketing of Coal Handling & Ash Handling Plants as independent systems
Enterprise Framework Agreement with Shell for Gas Turbine Generator
Technology Licensing with Mitsubishi Heavy Inds, Japan for Flue Gas Desulphurization
Introduced new ratings 300MW sets
Stabilization of CFBC boiler technology (250MW /125MW boilers)
Developing Power plant EPC capabilities
Source: MOSL, Company
28 April 2014
2

BHEL
#2
In industrial, BHEL is
expanding the product
portfolio, particularly in
Transmission and
Transportation segments.
These segments could
become key revenue
contributors
Industrial segment intake up 23% YoY in FY14, still down 63% from peak
During FY2014, BHEL’s order intake in the industrial segment stood at INR50b (up
23% YoY), but still down meaningfully from peak levels of INR135b in FY10.
Industrial segment in the past comprised of: Industrial Products (~52%),
Transmission (32%) and Transportation Segments (16%). Given the reliance on
Captive Power plants (67MW+) where the market size has declined meaningfully,
the order intake remains impacted.
However, we believe that the economics for setting up a captive power plant based
on imported coal has improved, given the ~15-20% tariff hikes by SEBs for industrial
consumers over the past three years; and thus the market will bounce back with
pick up industrial activities.
Also, in industrial, BHEL is expanding the product portfolio, particularly in
Transmission and Transportation segments.
Transmission:
765kva Transformers and Reactors are awaiting pre-qualifications
from NTPC / PGCIL (which requires operational track record), and the initial
products (for the private sector) have been delivered. Also, GIS products (33kva)
are under field trials. For STATCOM, the company is in the process of developing
low KVA applications. BHEL has been associated with several HVDC projects
since 1985, and higher trend in project awards could also lead to increased
order intake.
Transportation:
BHEL is in the process of setting up Mainline Electric Multiple
Unit factory in Rajasthan at a capex of INR10b. Also, electric loco manufacturing
capacity is being expended from 50 in FY12 to ~75 in FY14. Technology
absorption for IGBT based Propulsion systems for Electric Locomotives (upto
6000HP) and Electric Multiple Units is under process. Metro rail also presents
interesting growth opportunities, and BHEL is in the process of technology tie-
ups.
Industrial segment order intake up 28% YoY in FY14 (INR B)
Industrial segment Revenue composition (FY12/FY13)
Transmission,
32.0%
Industrial
Prds, 52.0%
Transportation,
16.0%
Source: MOSL, Company
Source: MOSL, Company
28 April 2014
3

BHEL
#3
R&M / International business has also witnessed cyclical uptick in FY14
For BHEL, R&M intake has improved meaningfully from ~INR20-22b in FY10-12, to
INR34b in FY14. Typically, services contribute ~20% of the R&M revenues, while
spare parts contribute 80%; given the higher margins, the pick-up in order intake is
positive. We believe that the improvement in R&M is a structural trend, given the
increased energy costs. In the international segment, BHEL has operated in 75+
countries, with installed capacity of 10GW+.
R&M has high margins, intake up 48% in last 2 years (INR B)
International business intake (INR B)
Source: MOSL, Company
Source: MOSL, Company
28 April 2014
4

BHEL
Strong operating leverage, cyclical factors support recovery
BHEL is strongly exposed to cyclical factors: i) Contribution margins at ~42% vs
expected EBIDTA margin of 12.4% (adjusted) in FY14, leading to a meaningful
operating leverage ii) Core NWC stable at ~200 days; cyclical factors of Retention
money (at ~200 days in FY14E vs 55-60 days in FY07-09) and customer advances
(deteriorated from 63% of revenues in FY09 to 34% in FY13) that impacted reported
NWC are expected to normalize, as we expect BTB to increase from 2.5x currently to
3x in FY15/16E.
Expect EBIDTA margins to bottom in FY15, supported by operating leverage
We expect BHEL’s EBIDTA margins to decline from 19.4% in FY13 to 10.4% in
FY15E, and improve to 13.3% in FY16E. During this period, we expect
contribution margins to be maintained at ~42%, and thus the expectations of
margin expansion are largely a function of the operating leverage, particularly
staff costs (16.7% in FY16E, vs 18.7% in FY15E) and provisions, including
Liquidated Damages (at 3.6% in FY16E vs 7.1% in FY14E).
Staff cost for BHEL is largely fixed in nature and thus entails a very strong
operating leverage: during FY01-FY12, staff cost declined meaningfully from
23.9% of revenues to 11.4% of revenues; and given the poor operating leverage,
we expect the same to increase to 18.7% of revenues in FY15E. Provisions also
have a cyclical character, and are a function of the execution stage of the
projects. Given the meaningful cost and time overruns in terms of project
execution over the last 2-3 years, the quantum is expected to increase
meaningfully to 7.1% of revenues in FY14 and we expect the trends to normalize
going forward (at 3.6% in FY16E).
Net additions to provisions, including Liquidated Damages
are highly cyclical in nature (% of revenues)
Expect staff costs at 18.7% of revenues in FY15, completing a
full circle (INR B)
Source: MOSL, Company
Source: MOSL, Company
28 April 2014
5

BHEL
Operating cash flows to improve; Core NWC stable
For BHEL, a large part of the variation in the reported net working capital is
being driven by cyclical factors, such as retention money (at ~200 days in FY14E
vs 55-60 days in FY07-09) and customer advances (deteriorated from 63% of
revenues in FY09 to 34% in FY13, but stable as % of order book at 12-14%). Thus,
while the core net working capital has been fairly stable at ~200days, the
reported number has been volatile from negative 24 days in FY09 to 188 days in
FY14E.
Given that we expect the above cyclical factors impacting NWC to support
recovery in FY15/16E, we expect Operating Cash Flows to improve from average
of ~INR20b in FY10-13 to ~INR92b in FY15/16E. This will lead to a meaningful
increase in net cash from INR63b in FY13 to INR209b in FY16E (~46% of current
market cap).
Customer advances have remained stable (as % of order
book), but volatile as % of revenues
Retention money is largely a function of negotiation with
the customers, and expect the quantum to decline (INR B)
Source: MOSL, Company
Source: MOSL, Company
NWC volatility a function of cyclical factors; expect a meaningful improvement in FY16E (Days)
FY02
NWC (Structural Factors)
Debtors (excl Retention) 220
Inventories
107
Loans and Advances
53
Sundry Creditors
99
Other Liabilities
17
Core NWC
264
NWC (Cyclical factors)
Retention Money
Customer Advances
Provisions
Reported NWC
FY03
190
105
50
96
17
232
FY04
185
96
47
79
15
234
FY05
211
112
47
80
17
273
FY06
164
102
33
77
14
208
FY07
148
89
24
75
12
174
FY08
173
108
22
84
14
206
FY09
164
109
34
81
15
211
FY10
155
103
31
84
14
190
FY11
163
100
30
74
19
200
FY12
172
105
23
84
9
207
FY13 FY14E FY15E FY16E
177
90
22
80
14
195
177
95
23
80
15
200
172
97
25
77
16
200
167
95
24
78
13
195
25
101
29
158
25
95
37
125
25
143
49
68
18
176
47
68
32
150
40
50
57
165
47
20
54
215
56
(12)
58
229
64
(24)
75
213
42
10
89
187
70
32
104
154
59
97
129
124
69
131
213
211
145
134
140
128
91
112
106
188
159
105
Source: MOSL, Company
28 April 2014
6

BHEL
Binary trends support execution, focus shifts on public sector
We analyzed each of the private sector projects in BHEL's order book to gauge
the possible trends in execution. We calculate that the unexecuted private
sector order book stands at ~INR255b, and thus contributes ~30% to BHEL’s
power sector order backlog of INR835b. Of this, ~INR179b are non-moving /
slow-moving, and largely comprises of subsequent units in projects that are
being postponed given the financial and viability constraints. Of the balance
INR75b private sector backlog, we calculate that this corresponds to just ~20%
of the initial order value, and thus several of these projects under execution are
in advanced stages of commissioning.
Given these binary trends in private sector order backlog, the focus increasingly
now shifts towards public sector projects (both Central and State sector) in
terms of gauging execution for BHEL. This is positive as private sector faces
several headwinds in project execution, including funding and viability issues.
We expect BHEL’s revenues to decline 19% / 18% YoY in FY14/FY15 given the
constrained intake and increased proportion of slow moving backlog; and then
improving in FY16 (growth of 10% YoY) as execution improves from recent
project wins in the public sector.
We analyzed each private sector power project in BHEL's order book to
gauge the possible trends in execution
Given these binary trends in
private sector order
backlog, the focus
increasingly now shifts
towards public sector
projects (both Central and
State sector) in terms of
gauging execution for BHEL
For BHEL, a sizeable part of the power sector project awards in FY10 (at 80%,
INR330b) / FY11 (at 40%, INR180b) were from the private sector, and many of these
projects face multiple execution challenges. We calculate that the unexecuted
private sector order book stands at ~INR255b, and thus it contributes ~30% to
BHEL’s power sector order backlog of INR835b. Of this, ~INR179b are non-moving /
slow-moving and comprises of nearly two-thirds of the private sector order book. Of
the balance INR75b private sector backlog, we calculate that this corresponds to just
~20% of order value, and thus several of these projects under execution are in
advanced stages of commissioning.
Non-moving / slow-moving order book of INR179b:
We understand that 7.5GW
of capacity, comprising INR179b of private sector order book are non-moving.
This includes 6 projects (~INR110b, 60% of non-moving order book) where work
on the initial units is being completed, while the financial and viability
constraints have led to the subsequent units being kept on hold. Key projects in
the non-moving category are: Indiabulls Nashik and Amravati (INR58b), DB
Power (INR38b), Abhijit Group (INR19b), Visa Power (INR13b), Monnet Power
(INR13b), etc.
Balance ~INR80b in final stages of project commissioning; several projects
perceived as slow moving have witnessed ~15-20% project execution in
9MFY14:
We understand that ~13 projects (16GW) in the private sector are
currently under execution by BHEL. The initial order value of these projects
stood at INR390b, and we calculate that on an aggregate basis, ~83% of the
work on these projects has been completed. Thus, several of these projects are
in the final stages of commissioning in 4QFY14 / FY15. Our analysis also indicates
that the project completion has increased from ~64% in March 2013 to ~83%
7
28 April 2014

BHEL
currently; and thus while the pace has remained constrained given the tight
liquidity conditions; still a 19% project completion in nine months is
commendable. Key projects where execution in 9mFY14 has exceeded 30%
include: i) Monnet Power (Malibrahmani Unit 1, 525MW) ii) Avantha (Jhabua
Unit 1, 600MW) and iii) Hinduja National Power (1040MW). Importantly, few
projects perceived as slow moving have also seen execution at ~15-20% of the
project cost: i) Bajaj Energy (Lalitpur, 1980MW), ii) Jaiprakash Power (Bara,
1320MW), iii) Dainik Bhaskar (Baradarha, 1200MW), iv) Indiabulls (Amravati
Phase 1, 1350MW), etc.
BHEL: Private projects under execution are approx 83% completed
Award
Project Cost Spent
Mar-13
Dec-13
FY09
Tanmar, Raigarh
Jindal Power
2,400
56
64
FY09
Goindwal
GVK
540
28
32
May-09
Korba West
Avantha
600
28
34
Jun-09
Hinduja National
Hinduja
1,040
36
48
Jul-09
Derang, Angul
Jindal India
1,200
34
45
Jul-09
Malibrahmani
Monnet
525
29
39
Nov-09
Bara
Jaiprakash
1,980
56
80
Feb-10
Nashik - Ph I
Indiabulls
1,350
37
46
Feb-10
Amravati - Ph I
Indiabulls
1,350
49
60
Mar-10
Seoni
Avantha
600
19
28
Jul-10
Baradarha
Dainik Bhaskar
1,200
47
59
Sep-10
Raigarh
Visa Power
600
12
16
Mar-11
Lalitpur
Bajaj Energy
1,980
52
76
Total
15,365
483
628
Approx project completed (Calculated, %)
64.0
83.2
Source: MOSL, Company
Note:
This analysis is based on various data sources including company managements / presentations,
industry sources, media articles, etc; and has not been verified by the management of BHEL. Hence,
while the actual numbers could vary, the intent is to understand and analyze the possible trends.
Project Details
Company
MW
BHEL: 22% of power sector order book is slow moving, largely comprising private sector
May-09
Mar-10
May-09
Mar-10
Mar-10
Mar-11
Mar-11
Sep-10
Oct-11
Mar-12
Project
Korba West
Bela TPP
OPG Power
Raichur
Usha Jayaswal
Nashik - Ph II
Amravati - Ph II
Raigarh
Singrauli
Vizag
Total
% of Power sector order book
Customer
Avantha
Ideal Energy
OPG
Surana Power
Abhijit Group
Indiabulls
Indiabulls
Visa Power
Dainik Bhaskar
Abhijeet Projects
MW
600
270
270
420
540
1,350
1,350
600
1,320
300
7,545
INR B
12.9
7.0
6.8
11.4
12.7
28.9
28.9
13.3
37.8
6.3
179.1
21.5%
Source: MOSL, Company
28 April 2014
8

BHEL
Valuation and view
We expect BHEL to report EPS of INR14.4 in FY14/INR9.7 in FY15E / INR15 in FY16E.
At the CMP of INR191, the stock quotes at PER of 13.2x FY14E / 19.7x FY15 / 12.7x
FY16E. We maintain
Buy
with a price target of INR240 (PER of 16x FY16E).
BHEL is making efforts in terms of expanding the contribution from the industry
business, particularly transmission and transportation, and they provide interesting
long term business drivers. The key variable to watch out for is the impact of the Pay
Commission in FY17, and could be an important swing factor. However, we believe
that a part of the impact will be mitigated by productivity improvements over the
medium term, and thus the impact is possibly not structural. We would be watchful
of the trends.
BHEL: Forward year PE band
48
36
24
12
0
8.6
17.6
18.5
PE (x)
Peak(x)
Avg(x)
Min(x)
40.9
12.0
9.0
6.0
3.0
0.0
0.9
4.2
1.3
BHEL: Forward year PB band
PB (x)
Peak(x)
Avg(x)
Min(x)
10.7
28 April 2014
9

BHEL
BHEL: Operating matrix
FY06
Order Intake (INR b)
Power
R&M
Industry
International Business
Cancellations
Total Order Intake
Order intake Growth (% YoY)
Power
Industry
International Business
Order backlog (INR B)
Power
Industry
International Business
Total Order backlog
Growth (%)
Segmental Revenues
Power
Industry
International Business
Total Revenues
Revenue Growth (% YoY)
Power
Industry
International
Total
EBITDA Margins (%)
Contribution Margins (%)
Staff Costs (%)
Other Expenses (%)
Net Working Capital (Days)
Reported (excl Cash)
Customer Advances
NWC (excl Customer Adv)
90
19
47
33
-
189
(19)
15
425
280
60
35
375
3.9
98
37
10
145
50.5
21.9
29.9
40.5
18.9
43.3
13.7
10.7
53
150
202
FY07
245
32
60
19
-
356
155
27
(43)
376
70
43
550
88.2
127
50
11
187
29.5
34.9
3.2
29.0
20.4
43.3
13.9
9.0
24
165
189
FY08
387
24
69
23
-
503
48
15
21
710
88
57
852
41.1
159
44
11
214
25.5
(12.7)
5.7
14.2
18.9
44.4
15.8
9.7
-4
215
212
FY09
444
28
92
33
-
597
15
34
41
974
130
71
1,170
18.7
213
56
12
280
34.1
27.8
4.8
31.0
15.7
38.5
15.4
7.4
-19
229
210
FY10
401
19
135
36
-
590
(11)
46
9
1,125
208
91
1,424
(1.1)
269
57
16
342
25.8
3.0
32.0
21.8
17.7
40.4
15.7
6.9
14
213
228
FY11
443
21
114
37
-
605
11
(15)
5
1,258
232
117
1,641
2.5
348
90
12
450
29.5
56.3
(22.2)
31.6
19.9
40.3
13.5
9.5
35
187
222
FY12
176
23
79
2
58
221
(57)
(31)
(94)
1,077
175
94
1,347
(63.5)
379
102
15
495
8.8
13.5
21.7
10.1
20.3
41.5
11.4
9.4
98
154
253
FY13
227
29
41
20
-
317
29
(48)
756
933
115
104
1,152
43.2
396
100
6
502
4.5
(1.6)
(60.8)
1.3
19.4
42.1
11.9
10.9
133
124
257
FY14E
170
34
50
26
-
280
(20)
23
28
804
100
124
1,027
(11.5)
334
65
6
404
(15.7)
(35.0)
-
(19.4)
12.4
42.7
15.1
15.2
190
134
324
FY15E
204
40
60
25
-
329
19
20
(3)
779
105
142
1,026
17.5
269
55
6
331
(19.4)
(15.0)
10.0
(18.3)
10.4
42.6
18.7
13.5
162
140
302
FY16E
232
46
72
25
-
375
14
20
-
763
114
159
1,036
13.9
293
64
8
364
8.9
15.0
20.0
10.1
13.3
42.2
16.7
12.2
108
128
236
28 April 2014
10

BHEL
28 April 2014
11

BHEL
Financials and valuation
Income statement
Y/E March
Revenues
Change (%)
EBITDA
EBITDA Margin (%)
Depreciation
EBIT
Interest
Other Income
Extraordinary items
PBT
Tax
Tax Rate (%)
Reported PAT
Adjusted PAT
Change (%)
2011
397,638
21
80,532
19.9
5,441
75,091
547
10,206
5,305
90,055
29,945
33.3
60,110
56,650
21
2012
472,278
19
99,076
20.6
8,000
91,076
513
12,656
-193
103,026
32,623
31.7
70,403
68,922
22
2013
476,177
1
93,898
19.4
9,534
84,364
1,253
11,217
-4
94,324
28,177
29.9
66,148
65,540
-5
2014
388,317
-18
47,381
12.0
9,516
37,865
1,206
13,565
0
50,223
16,323
32.5
33,901
35,240
-46
(INR Million)
2015E
317,438
-18
33,925
10.4
10,664
23,261
1,155
12,254
0
34,360
10,652
31.0
23,708
23,708
-33
2016E
349,555
10
47,513
13.3
11,908
35,606
1,245
17,953
0
52,314
15,694
30.0
36,620
36,620
54
Balance sheet
Y/E March
Share Capital
Reserves
Net Worth
Debt
Deferred Tax
Total Capital Employed
Gross Fixed Assets
Less: Acc Depreciation
Net Fixed Assets
Capital WIP
Investments
Current Assets
Inventory
Debtors
Cash & Bank
Loans & Adv, Others
Curr Liabs & Provns
Curr. Liabilities
Provisions
Net Current Assets
Total Assets
2011
4,895
196,643
201,538
1,021
-21,636
180,924
80,497
46,488
34,009
17,338
4,392
515,229
108,521
274,656
96,302
35,751
390,043
314,078
75,965
125,186
180,924
2012
4,895
248,837
253,732
1,234
-15,462
239,504
97,066
54,098
42,968
13,476
4,617
591,237
135,487
357,405
66,720
31,624
412,794
336,380
76,414
178,443
239,504
2013
4,895
299,546
304,441
14,152
-15,507
303,086
107,832
63,248
44,585
11,716
4,292
625,185
117,638
398,882
77,321
31,344
382,692
293,270
89,421
242,493
303,086
2014
4,895
321,547
326,443
14,094
-15,507
325,030
117,634
72,005
45,630
5,000
4,292
615,515
100,962
414,911
73,056
26,586
345,406
248,476
96,930
270,108
325,030
(INR Million)
2015E
2016E
4,895
4,895
336,934 360,700
341,829 365,595
14,094
14,094
-15,507
-15,507
340,417 364,183
129,424 143,214
82,669
94,577
46,755
48,638
5,000
5,000
4,292
4,292
588,454 623,243
84,121
90,884
333,269 298,571
147,314 208,753
23,751
25,035
304,085 316,990
202,714 210,158
101,371 106,832
284,370 306,253
340,417 364,183
E: MOSL Estimates
28 April 2014
12

BHEL
Financials and valuation
Ratios
Y/E March
Basic (INR)
EPS
Cash EPS
Book Value
DPS
Payout (incl. Div. Tax.)
Valuation(x)
P/E
Cash P/E
Price / Book Value
EV/EBITDA
Dividend Yield (%)
Profitability Ratios (%)
RoE
RoCE
Turnover Ratios (%)
Asset Turnover (x)
Debtors (No. of Days)
Inventory (No. of Days)
Creditors (No. of Days)
Leverage Ratios (%)
Net Debt/Equity (x)
2011
23.1
25.4
82.3
6.2
25.4
2012
28.2
31.4
103.7
6.4
22.3
2013
26.8
30.7
124.4
5.4
20.0
2014
14.4
18.3
133.4
4.2
30.0
2015E
9.7
14.0
139.7
2.9
30.0
2016E
15.0
19.8
149.4
4.5
35.1
8.2
7.5
2.3
4.6
3.3
33.3
46.1
2.5
247.9
97.9
90.7
0.0
6.8
6.1
1.8
4.1
3.4
30.9
43.3
2.3
271.9
103.1
104.2
-0.3
7.1
6.2
1.5
4.3
2.8
23.7
31.1
1.8
300.7
88.7
97.5
-0.2
13.2
10.4
1.4
8.6
2.2
10.7
12.1
1.3
382.3
93.0
88.7
-0.2
19.7
13.6
1.4
9.8
1.5
7.1
7.0
1.0
373.8
94.3
84.2
-0.4
12.7
9.6
1.3
5.7
2.4
10.4
10.1
1.0
304.1
92.6
87.5
0.0
Cash flow statement
Y/E March
OP/(Loss) before Tax
Depreciation
Others
Interest
Direct Taxes Paid
(Inc)/Dec in Wkg Cap
CF from Op. Activity
(Inc)/Dec in FA & CWIP
(Pur)/Sale of Invt
Others
CF from Inv. Activity
Inc/(Dec) in Net Worth
Inc / (Dec) in Debt
Interest Paid
Divd Paid (incl Tax)
CF from Fin. Activity
Inc/(Dec) in Cash
Add: Opening Balance
Closing Balance
2011
84,750
5,441
0
547
29,945
-36,596
41,503
-17,339
-3,593
0
-20,932
-6,369
-256
547
14,999
-22,171
-1,599
97,901
96,301
2012
103,218
8,000
0
513
32,623
-85,648
-11,438
-13,097
-225
0
-13,322
6,169
213
513
11,302
-5,434
-30,194
96,302
66,108
2013
94,329
9,534
0
1,253
28,177
-8,217
31,108
-9,390
325
0
-9,065
-43
12,918
1,253
23,064
-11,442
10,601
66,720
77,321
2014
50,223
9,516
0
1,206
16,323
-8,874
15,699
-3,846
0
0
-3,846
0
-58
1,206
14,855
-16,119
-4,266
77,321
73,055
(INR Million)
2015E
2016E
34,360
52,314
10,664
11,908
0
0
1,155
1,245
10,652
15,694
82,030
36,356
97,054
87,390
-11,790
-13,790
0
0
0
0
-11,790
-13,790
0
0
0
0
1,155
1,245
9,850
10,917
-11,005
-12,161
74,259
61,439
73,056 147,314
147,314 208,753
E: MOSL Estimates
28 April 2014
13

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