Shares of Bharat Heavy Electricals Limited (BHEL) experienced a seven percent surge on Monday, November 13, following the release of the company’s fiscal second-quarter results for 2023-24 (Q2FY24) on Friday. BHEL reported a net loss of ₹238 crore for Q2FY24, compared to a net profit of ₹12.10 crore in the same period last year. Despite the loss, the state-owned engineering firm’s shares saw a positive response.
In the July-September quarter, BHEL’s revenue from operations stood at ₹5,125.3 crore, a slight decline of 1.5 percent from ₹5,202.6 crore in the corresponding period of the previous year. The total income dropped to ₹5,305.38 crore from ₹5,418.74 crore in the same period a year ago.
Notably, BHEL reported a 3 percent increase in consolidated revenue for its power segment, reaching ₹3,927.18 crore, compared to ₹3,814.35 crore in the previous year. However, the industry segment’s consolidated revenue experienced a marginal decline to ₹1,017.6 crore from ₹1,113.60 crore.
Prabhudas Lilladher, a domestic brokerage firm, assigned a ‘reduce’ rating to BHEL stock, describing the Q2FY24 performance as dismal and below expectations. The stock’s current trading multiples (49.4x/28.1x FY24/25E) led to the ‘reduce’ rating.
On Monday, BHEL shares opened at ₹129 and witnessed a 6.97 percent gain, reaching an intraday high of ₹138 apiece. Despite the company’s challenging financials, the positive market response indicates investor optimism.
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