Motilal Oswal Securities  has maintained 'Buy' on BHEL with target price Rs 300 a share against market price of Rs 224 a share on August 12.

Commenting on investment rationale, Motilal Oswal  said, "1QFY15 operational performance was better than estimates with Revenues at Rs51billion (down 21% YoY, 8% below est) and EBIDTA margins at 4.3% (down 180bp YoY, vs est of 2.9%). PAT at INR 1.9b, down 58% YoY, was higher than estimates of Rs762million (down 58%) and is supported by other income at Rs3.5billion / lower tax  rates at 21%.

Chinese Electric Power Design Institute has challenged TANGENCO’s order award worth Rs92.1billion to BHEL for their Ennore project. BHEL is planning to enter retrofit business of utility power plants, as the pace of order  finalization continues to be delayed’’it added as recent developments .

We maintain Buy with a Price Target of Rs 300 a share (20x FY16E). We expect BHEL to report EPS of Rs 9.8 a share (down 33.7%) in FY15 and Rs 14.9 a share (up 52%) in FY16. We maintain our positive view on the sector."

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