Underweight Bharat Heavy Electricals Ltd, target Rs 122 : JP Morgan

JP Morgan has Underweight call on Bharat Heavy Electricals Ltd. with a target price of Rs 122 .The current market price of Bharat Heavy Electricals Ltd. is 127.95 Time period given by analyst is Half-yearly when Bharat Heavy Electricals Ltd. price can reach defined target.
BHEL's provisional sales growth for Oct-Nov is ~7%, implying steep deceleration over 1HFY17 growth of 19%. There is likelihood of over 10% QoQ dip in Q3 sales and EBITDA loss during the quarter. BHEL has not reported any large thermal contract so far; ~42% of order book remains slow moving. NTPC is in no rush to repower 11GW of 25-year-old sub-critical projects. Corresponding order opportunity from NTPC is likely to be spread over a few years. CEA's draft plan for Generation concludes that no fresh coal project starts are required till 2027.