Investors beware
The public sector capital goods bellwether company Bharat Heavy Electricals Limited (BHEL), reported its earnings for the fourth quarter and financial year ended on 31 March 2020. The numbers were poor and quite off the mark from what the equity research analysts had forecasted. For the quarter 4QFY20, the company reported total revenue of Rs50.5bn (vs Rs103.7 yoy); and for the full year FY20 the company reported revenue of Rs210.9bn (vs Rs304.41bn yoy). The revenue for the quarter was down ~51% yoy; and for the full year it was down ~29% yoy. The research updates on BHEL by various brokerages raised three points in mind, which I find are critical for investors (especially the smaller one like me) to assimilate. I would like to share these points with the readers as follows: (a) In the notes to account, BHEL reported that in 9 days of lockdown (23rd March to 31 March) Rs40bn of revenue was lost. This is appx 39% of the 4QFY19 revenue and 13% of the full year FY19 rev...