Bharat Heavy Electricals Limited (BHEL) Complete Fundamental Analysis

Description
Bharat Heavy Electricals Limited (BHEL) is the government's flagship engineering and manufacturing company and has a history of 5 decades of operations. The company is an integrated power plant equipment manufacturer with the capability to deliver 20,000 MW of power plant equipment per annum. It caters to all the types of power plants including Coal, Hydro, Nuclear, Gas and Solar. The major clientele for the company are Power, Transmission, Transportation (Railway), Renewable Energy, Oil & Gas, and Defence sectors.

The Model covers all the major fundamental aspects of BHEL over the ten year period. The model is easy to edit and update for the future years as well. It includes:
1. Growth Ratios
2. Profitability Ratios
3. Cash Flow Ratios
4. Liquidity and Solvency Ratios
5. Efficiency Ratios
6. Valuation Ratios
7. ROE (Du Pont Analysis)
8. Common Size analysis
9. Enterprise Valuation
10. Financial Strength Analysis

Further Qualitative analysis is also done considering these factors and ratings have been assigned. The complete detailed analysis is in the word document along with the Excel model.

More about the Company:

The company is promoted by the government of India which controls over 63% stake. Therefore, BHEL has a high percentage of revenue coming from government projects. The company currently has 16 manufacturing units, 2 repair centres, 8 service centres along with the infrastructure to deal with 150+ project sites across the world. BHEL has project footprint in 83+ countries in the world and is currently executing 6 GW projects in 12 countries.

The company also spends significantly on research and new project development. Their R&D Expenditure is >2.5% of the revenue which is the highest in the Indian engineering field. The business model is also asset-heavy and requires intensive capital investment along with technical know-how. Hence the entry of new players is not easy. However, the competition between the existing firms is intense and the private players have technical superiority. Therefore this category gets 3 stars in BHEL shares fundamental analysis.