What to expect from BHEL Q2 results today?

MUMBAI: Shares of capital goods major BHEL were subdued ahead of its second quarter results today. The company is likely to report a net profit of Rs 818 crore for the quarter ended September 2013, down 36 per cent, as compared to a net profit of Rs 1,275 crore in the corresponding quarter last fiscal, says ET Now poll.

Net sales for the quarter are seen at Rs 8,800 crore, down 15 per cent, from Rs 10,400 crore in year-ago period.

EBITDA is seen down 40 per cent at Rs 1,150 crore from Rs 1,900 crore and margins are seen slipping to 13.1 per cent vs 18.3 per cent.

According to analysts, the revenues are likely to decline on falling order book. Execution of projects is likely to be constrained due to liquidity issues.

BHEL has not announced any major orders in second quarter. It may report orders worth Rs 2,000 – 4,000 crore in second quarter.

Margins will be impacted by negative operating leverage.

"Amid depressed inflows, execution roadblocks on select private sector jobs and order book decline of ~14 per cent YoY as of September quarter, we estimate 2QFY14 revenue of Rs 88.4 billion, down 15 per cent YoY. A steep 400 bps decline in OPM estimate to 14 per cent is led by sticky and growing SG&A expenses and moderate increase in staff expenses," said JP Morgan report.

"We estimate September quarter PAT of Rs 8.25 billion, down 35 per cent YoY. Weak results are a consensus expectation, any significant unexpected beat of topline/margin is an upside risk," the report added.

At 11:30 a.m.; the stock was at Rs 141, down 0.91 per cent, on the BSE. It touched a high of Rs 143.15 and a low of Rs 140 in trade today.