Nirmal Bang
BHEL (Hold)
CMP: Rs 208
Target: Rs 221
PAT of BHEL grew 20.8 per cent to Rs 3,380 crore. Operating/ net profit was 10.1/5.4 pre cent higher than our estimates and 6.9/13.3 per cent higher than Bloomberg consensus estimates, respectively. However, the key concern emanates from weak order inflow, which fell 71 per cent to Rs 6,800 crore in 4QFY12. Considering the policy paralysis affecting the power sector, we reduce our order inflow assumption for FY13E by 20 per cent. Consequently, we downgrade earnings estimates by 3.5/5.6 per cent for FY13E/FY14E, respectively.
MSEC
MRPL (Buy)
CMP: Rs 58
Target: Rs 94
Mangalore Refinery & Petrochemicals Ltd (MRPL) reported strong and in-line revenue growth for 4QFY12, majorly driven by high product realisations and higher capacity utilisation. 4Q profitability surpassed ours and street's expectations owing to better-than-expected GRMs due to high product cracks and inventory gains. MRPL's GRMs of $7.07/bbl were at par with benchmark Singapore GRM's of $7.1/bbl and is expected to trade at a premium once phase III expansion is completed. On the back of revised throughput and product crack estimates, we have pruned our earnings estimates. We maintain ‘Buy', with a lower target price of Rs 94 (earlier Rs 103).
Arihant Capital
Power Finance (Buy)
CMP: Rs 149
Target: Rs 266
Policy paralysis, lack of availability of fuel and equipment supply issues have largely impacted the power finance company. However, with the signs of alleviation of these concerns, and with reduction in defaults by SEBs combined with stringent lending criteria and PFC's relatively lower exposure to risky segments unlike other power financiers makes it less vulnerable to the sectoral headwinds.
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