BHEL earnings likely to disappoint despite stong business: Prateek Agarwal

In a chat with ET Now, Prateek Agarwal, Business Head & CIO, ASK investment Manager, shares his views on BHEL. Edited Excerpts:

ET Now: What is the market pricing in with BHEL right now?

Prateek Agarwal: In terms of BHEL, there is a dichotomy in views as to for how long the EPS downtick continues. Some people believe that 16 would be the last year from 17 EPS uptick will start. Others believe it will be for longer that we will continue to see EPS downtick. On the positive side what has happened is the business has started to get in lot of new orders. Over the next few months some more order should happen.

This is a business which is standing out. In this super critical game the entities which end up with first few years will be able to indigenise quickly, and hence will have a cost benefit over the longer term. BHEL clearly benefits versus everybody else in the space. Also because of the relative moments of currencies, the Chinese equipment no longer look so attractive. So BHEL stands out. It is just that how would earnings be over the near term. We really believe earnings disappoint will continue.We are not extremely positive on the name.