Fact based stock research
Bharat Heavy Electricals (BSE:500103)

INE257A01026

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Bharat Heavy Electricals stock research in summary

bhel.com

ANALYSIS: With an Obermatt Combined Rank of 33 (worse than 67% compared with investment alternatives), Bharat Heavy Electricals (Heavy Electrical Equipment, India) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Bharat Heavy Electricals are low in value (priced high) with a consolidated Value Rank of 20 (worse than 80% of alternatives), and are riskily financed (Safety Rank of 34, which means above-average debt burdens) but show above-average growth (Growth Rank of 79). ...read more

RECOMMENDATION: A Combined Rank of 33, is a hold recommendation based on Bharat Heavy Electricals's financial characteristics. As the company Bharat Heavy Electricals shows low value with an Obermatt Value Rank of 20 (80% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 79% of comparable companies (Obermatt Growth Rank is 79). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 34 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Bharat Heavy Electricals, even a low-value company (in terms of its key financial indicators) can be a good investment. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	20
Growth Rank	79
Safety Rank	34
Combined Rank	33

Country	India
Industry	Heavy Electrical Equipment
Index
Size class	Large

25-Apr-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Bharat Heavy Electricals

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	44	45	21	20
GROWTH
GROWTH	83	91	91	79
SAFETY
SAFETY	53	47	30	34
SENTIMENT
SENTIMENT	n/a	5	4	^new
360° VIEW
360° VIEW	n/a	37	14	^new

Most recent update of the stock research: 25-Apr-2024. Financial reporting date used for calculating ranks: 31-Dec-2023. Stock research history is based on the Obermatt Method. The higher the rank, the better Bharat Heavy Electricals is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	44	45	21	20
GROWTH
GROWTH	83	91	91	79
SAFETY
SAFETY	53	47	30	34
COMBINED
COMBINED	50	80	43	33

Last update of combined financial performance: 25-Apr-2024. Stock analysis on combined financial performance: The higher the rank of Bharat Heavy Electricals the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 20 (worse than 80% compared with alternatives), Bharat Heavy Electricals shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Bharat Heavy Electricals. Price-to-Sales is 41 which means that the stock price compared with what market professionals expect for future profits is higher than 59% of comparable companies, indicating a low value concerning Bharat Heavy Electricals's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 43, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Bharat Heavy Electricals. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 3 and Dividend Yield, which is lower than 87% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 20, is a sell recommendation based on Bharat Heavy Electricals's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Bharat Heavy Electricals? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Bharat Heavy Electricals? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Bharat Heavy Electricals may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	83	63	41	41
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	1	24	10	3
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	94	83	41	43
DIVIDEND YIELD
DIVIDEND YIELD	1	37	14	13
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	44	45	21	20

Last update of Value Rank: 25-Apr-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Bharat Heavy Electricals; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 79 (better than 79% compared with alternatives) for 2024, Bharat Heavy Electricals shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Bharat Heavy Electricals. Sales Growth has a rank of 100 which means that currently, professionals expect the company to grow more than 100% of its competitors. Capital Growth is also above 4% of competitors with a rank of 51, and Stock Returns with the rank of 100 is also an outperformance. Only Profit Growth is low with a rank of 4 which means that currently, professionals expect the company to grow its profits less than 96% of its competitors. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 79, is a buy recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communication about extra growth efforts costing time and money. If that is the case, Bharat Heavy Electricals is a good growth stock. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	55	96	100	100
PROFIT GROWTH
PROFIT GROWTH	100	69	27	4
CAPITAL GROWTH
CAPITAL GROWTH	n/a	59	76	51
STOCK RETURNS
STOCK RETURNS	73	73	100	100
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	83	91	91	79

Last update of Growth Rank: 25-Apr-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Bharat Heavy Electricals.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 34 (better than 34% compared with alternatives), the company Bharat Heavy Electricals has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Bharat Heavy Electricals is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators where two out of three are above average for Bharat Heavy Electricals.Leverage is at 69, meaning the company has a below-average debt-to-equity ratio. It has less debt than 69% of its competitors.Refinancing is at a rank of 50, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 50% of its competitors. Liquidity is at 6, meaning that the company generates less profit to service its debt than 94% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 34 (worse than 66% compared with alternatives), Bharat Heavy Electricals has a financing structure that is riskier than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. Investors should compare Obermatt’s Value, Growth, and Sentiment Ranks before deciding. They may also want to investigate why cash flows are expected to be low, making debt service for Bharat Heavy Electricals more challenging. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	76	62	66	69
REFINANCING
REFINANCING	80	72	48	50
LIQUIDITY
LIQUIDITY	1	1	6	6
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	53	47	30	34

Last update of Safety Rank: 25-Apr-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Bharat Heavy Electricals and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	2	1	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	49	4	^new
MARKET PULSE
MARKET PULSE	n/a	15	27	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	5	4	^new

Last update of Sentiment Rank: 25-Apr-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Bharat Heavy Electricals.
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