BHEL Q2 Results: Margins the highest in 13 quarters as per analysts; PSU Stock jumps 4%

State-run Bharat Heavy Electricals Ltd. (BHEL)

saw its share price jump over 4% on Wednesday, October 14, after its September quarter results turned out to be a beat on analyst expectations by a wide margin across parameters.

BHEL reported a 23.8% revenue growth figure in the September quarter. The ₹9,300 crore number was higher than the CNBC-TV18 poll of analysts, which stood at ₹9,236 crore.

Net profit for the period stood at ₹810 crore, which is more than 2x higher than the year-ago profit figure of ₹368 crore. The CNBC-TV18 poll had pegged the figure to be 654.4 crore.

Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the quarter stood at ₹1,026 crore, a growth of 77% on a year-on-year basis, and also higher than the CNBC-TV18 poll of ₹881 crore.

EBITDA margin for the quarter expanded by 330 basis points to 11% from 7.7% in the year-ago quarter. The CNBC-TV18 poll had projected a figure of 9.5%. According to analysts, this figure is the highest in the last 13 quarters.                                                                                                                                                                                                                                                                                                                                              BHEL's margins saw expansion despite other expenses rising to ₹721 crore at the end of the September quarter, from ₹391 crore last year.

Among BHEL's various business segments, the Power segment saw revenue growth of 16.95% from last year to ₹6,637.9 crore, while the industry segment saw 45% topline growth from last year to ₹2,662.5 crore.

EBIT margin for BHEL's power business expanded to 12.93% from 10.47%, while industry segment margins expanded significantly to 19.46% from 15.25% a year earlier.

At the end of the June quarter, BHEL's cash from operations stood at ₹1,907 crore compared to a negative ₹1,182 crore during the same quarter a year ago.

BHEL's board has also approved investing ₹500 crore in thermal and nuclear set manufacturing facilities at Haridwar.

Shares of BHEL are trading 3.6% higher after the results announcement at ₹458.35. The stock is up 57% so far this year.