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Shares of Bharat Heavy Electricals Ltd fell 1.2 per cent after HSBC downgraded the stock to "reduce" from "accumulate" and cut its price target to Rs 205 from Rs 228.
Low visibility on new order inflows has created headwinds for FY16 earnings, HSBC said.
Structural capacity oversupply and pay revision will keep margins under pressure, HSBC added.
It said attempts to diversify into new businesses has been slow and less yielding. An improvement in the existing power equipment business alone would not support a large-scale ROE expansion from the current cyclical lows, HSBC said.
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