Avoid BHEL: Prashastha Seth, IIFL Wealth

Prashastha Seth, Senior Fund Manager at IIFL Wealth gives his views on BHEL in a chat with ET Now

ET Now: What is your call on BHEL?

Prashastha Seth: It is still an avoid for us. BHEL is facing a structural issue with respect to order inflow and we do not see that changing in a hurry.

There are two issues BHEL is facing. As a whole, the orders are drying up in the sector and there is much increased competition in the sector and none of this is going to change.

The new players like L&T, who have got the capacity at the wrong time, have to be fairly aggressive to build in a base for themselves in the market.

So, you would continue to see strong price in the segment. BHEL has seen substantial erosion in terms of working capital. My sense is even though valuation gap is fairly cheap, unless you get some sort of news in terms of power sector reforms, this stock is likely to languish at these levels only.