2QFY2013 Result Update | Capital Goods

October 31, 2012

BHEL
Performance Highlights
Quarterly Data (Standalone)
(` cr) Revenue EBITDA EBITDA margin (%) PAT 2QFY13 10,562 1,899 18 1,274 2QFY12 10,546 1,959 19 1,412 % chg (yoy) 0.2 (3.0) (59)bp (9.7) 1QFY13 8,439 1,202 14 921 % chg (qoq) 25.2 58.0 374bp 38.4

NEUTRAL
CMP Target Price Investment Period
Stock Info Sector Market Cap (` cr) Net Debt (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code Capital Goods 55,095 (6,371) 1.5 340/195 728,246 2 18,505 5,620 BHEL.BO BHEL@IN

`225 -

Source: Company, Angel Research

Bharat Heavy Electricals Ltd (BHEL) reported a disappointing performance on the top-line and bottom-line front in 2QFY2013. The top-line remained flat yoy at `10,562cr, below our expectations. Order inflows continued to remain subdued at `3,157cr taking the total order book to `122,300 (down 24.1% yoy), thus implying an order book coverage of ~2.5x, which has been deteriorating sequentially over the quarters. The management has guided visibility of 10-13GW power sector orders. However, the headwinds in the power sector such as domestic fuel availability and land acquisition issues may delay these projects. Key Highlights: The top-line remained flat yoy at `10,562cr in spite of the power segment posting a healthy 14.9% yoy growth to `8,958cr on account of decline in the industrial segment by 30.6% yoy to `2,055cr (due to industrial slowdown). The EBITDA margin came in slightly lower than expected at 18.0% (lower by 79bp vs our expectation of 18.8%). Although, the margin of the power segment expanded by 287bp yoy to 19.7%, the margin of industrial segment contracted by 572bp yoy to 21.3%. The company benefited from an exceptional item to the tune of `166cr at the PBT level due to a change in accounting policy. However, the net profit declined by 9.7% yoy to `1,274cr. Outlook and valuation: Given the strong competition (domestic as well as international), declining order flows and a weak capex cycle, we expect BHELs profit, margin and ROE to decline from the current levels. The stock trades at 9.1x and 10.3x on our FY2013E and FY2014E EPS estimates, respectively. We maintain our Neutral view on the stock. Key financials (Consolidated)
Y/E March (` cr) Net sales % chg Adj. net profit % chg EBITDA (%) EPS (`) P/E (x) P/BV (x) RoE (%) RoCE (%) EV/Sales (x) EV/EBITDA (x)
Source: Company, Angel Research

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 67.7 12.7 14.6 5.0

Abs. (%) Sensex BHEL

3m 7.4

1yr 4.5

3yr 16.4 (49.2)

4.4 (29.2)

FY2011 42,538 26.4 6,053 39.9 20.2 24.7 9.1 4.3 42.3 35.5 1.1 5.3

FY2012E 48,355 13.7 7,087 17.1 20.6 29.0 7.8 3.5 49.5 29.2 1.0 4.9

FY2013E 47,801 (1.1) 6,025 (15.0) 18.5 24.6 9.1 2.7 33.5 22.6 1.0 5.5

FY2014E 43,757 (8.5) 5,346 (11.3) 18.0 21.8 10.3 2.3 24.5 17.9 1.1 6.3
Amit Patil 022-39357800 Ext: 6839 amit.patil@angelbroking.com

Please refer to important disclosures at the end of this report

BHEL | 2QFY2013 Result Update

Exhibit 1: Quarterly performance (Standalone)

(` cr) Net Sales Other operating income Total income Stock adjustments Raw Material (% of total income) Employee Cost (% of total income) Other Expenses (% of total income) Total Expenditure EBITDA (EBITDA %) Interest Depreciation Other Income PBT (% of total income) Total Tax (% of PBT) PAT (Reported) (% of total income) EPS (`)* 2QFY13 10,400 162 10,562 (472) 6,604 58.1 1,481 14.0 1,048 9.9 8,662 1,899 18.0 26 216 131 1,788 16.9 514 28.7 1,274 12.1 5.2 2QFY12 10,299 247 10,546 (448) 6,566 58.0 1,349 12.8 1,119 10.6 8,586 1,959 18.6 10 189 220 1,981 18.8 569 28.7 1,412 13.4 5.8 (9.7) (9.7) (9.7) 168.3 14.6 (40.6) (9.7) (6.4) (0.7) 0.9 (3.0) 0.6 0.1 9.8 % chg (yoy) 1.0 (34.4) 0.2 1QFY13 8,326 113 8,439 (527) 5,385 57.6 1,395 16.5 984 11.7 7,237 1,202 14.2 6 228 366 1,335 15.8 414 31.0 921 10.9 3.8 38.4 38.4 24.1 368.5 (5.3) (64.3) 34.0 19.7 58.0 6.5 6.2 22.6 % chg (qoq) 24.9 25.2 1HFY13 18,726 275 19,001 (999) 11,989 63.1 2,876 15.1 2,030 10.7 15,896 3,104 16.3 34 445 497 3,123 16.4 927 4.9 2,195 11.6 9.0 1HFY12 17,422 270 17,692 (878) 11,146 63.0 2,650 15.0 1,894 10.7 14,812 2,880 16.3 18 360 661 3,163 17.9 935 5.3 2,228 12.6 9.1 (1.4) (1.4) (0.9) 83.5 23.6 (24.8) (1.3) 7.3 7.8 7.2 8.5 7.6 % chg (yoy) 7.5 1.8 7.4

Source: Company, Angel Research.* Note: Adjusted for stock split

Exhibit 2: Actual vs Estimate

(` cr) Revenue EBITDA PAT
Source: Company, Angel Research

Actual
10,562 1,899 1,274

Estimates
11,967 1,985 1,487

Var (%)
(11.7) (4.3) (14.3)

October 31, 2012

BHEL | 2QFY2013 Result Update

Revenue growth flat yoy

The top-line came in flat yoy at `10,562cr, below our expectations. The power segment posted a healthy 14.9% yoy growth to `8,958cr for the quarter. However, the industrial segment declined by 30.6% yoy to `2,055cr on account of industrial slowdown which is leading to lower order inflows, delay in project execution and payments.

Exhibit 3: Top-line growth

24,000 20,000 16,000 12,000 8,000 18,222 8,491 9,023 4,000 0 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13 10.2 10,546 10,743 19,589 10562 7,271 8439 10 0 30.7 26.2 24.8 24.2 19.1 16.1 0.2 7.5 30 20 40

Sales (` cr, LHS) Source: Company, Angel Research

Growth (yoy %)

Exhibit 4: Segment-wise performance

Y/E March (` cr) Revenue Power Industry Total Revenue EBIT Power Industry Total EBIT Revenues mix (%) Power Industry EBIT Margin (%) Power Industry Total
Source: Company, Angel Research 19.7 21.3 20.0 16.9 27.0 19.7 17.8 21.0 18.5 18.9 21.1 19.4 16.7 25.4 18.9 81.3 18.7 72.5 27.5 77.5 22.5 79.6 20.4 74.6 25.4 1,769 438 2,207 1,316 800 2,116 34.4 (45.3) 4.3 1,206 413 1,620 46.6 5.9 36.3 2,975 851 3,827 2,268 1,174 3,441 31.2 (27.5) 11.2 8,958 2,055 11,013 7,797 2,960 10,758 14.9 (30.6) 2.4 6,772 1,972 8,744 32.3 4.2 26.0 15,730 4,027 19,757 13,578 4,613 18,191 15.9 (12.7) 8.6

2QFY13

2QFY12

% chg (yoy)

1QFY13

% chg (qoq)

1HFY13

1HFY12

% chg (yoy)

October 31, 2012

BHEL | 2QFY2013 Result Update

Exhibit 5: Power segment revenue and growth

17,500 14,000 10,500 7,000 7,055 3,500 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13 30.0 (3.6) 5,502 7.6 15,144 5,780 10.5 15,574 7,797 8,711 17.2 6,772 8,958 14.9 35.8 58.3 2.8 70 60 50 40 30 20 10 0 (10)

Exhibit 6: Industry segment revenue and growth

4,000 3,200 2,400 1,600 800 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13 4.1 1,661 3,778 3,709 109.6 17.8 78.2 (37.3) 19.1 1,653 2,960 2,367 4,679 19.3 1,972 26.1 125 100 75 (30.6) 50 25 2,055 0 (25) (50)

Power (` cr, LHS)

Growth (yoy %)

Industry (` cr, LHS)

Growth (yoy %)

Source: Company, Angel Research

Source: Company, Angel Research

Margins came in flat at 18.0%

BHEL reported an almost flat performance yoy on the OPM front, with margins coming in at 18.0% (18.6% in 2QFY2012). Although, the margin of the power segment expanded by 287bp to 19.7%, the margin of industrial segment contracted by 572bp to 21.3%. The industrial slowdown leading to reduced order inflow has resulted in more aggressive bidding to bag orders.

Exhibit 7: Segment EBIT Margin

36.0 30.0 24.0 (%) 18.0 12.0 20.1 20.3 31.1 9.9 27.3 26.6 16.5 22.6 16.9 27.0 19.0 31.6 27.4 30.4 17.8 21.0 6.0 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13 19.7 21.3

Exhibit 8: Blended EBITDA margins

6,000 5,000 4,000 3,000 2,000 1,000 0 2QFY10 3QFY10 4QFY10 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13 18.3 21.6 20.6 14.6 23.0 22.4 19.2 15.3 18.6 19.4 14.2 25.2 18.0 30 25 20 15 10 5 0

Power segment EBITM

Industry segment EBITM

EBITDA (` cr, LHS)

EBITDAM (%, RHS)

Source: Company, Angel Research

Source: Company, Angel Research

Net Profit declines 9.7% yoy

The subdued order inflow has led to decline in advance payment, forcing the company to borrow, to fund its working capital requirements. Consequently, interest has increased to `26cr in 2QFY2013 (vs `10cr in 2QFY2012). Other income also declined by 40.6% yoy to `131cr. Although the company benefited from an exceptional item to the tune of `166cr at the PBT level due to a change in accounting policy, the net profit still declined by 9.7% yoy to `1,274cr.

October 31, 2012

BHEL | 2QFY2013 Result Update

Order inflow continues to remain sluggish

According to the management, the total order inflow for the quarter stood at `3,157cr taking the total order book to `122,300cr (down 24.1% yoy), thus implying an order book coverage of ~2.5x, which has been deteriorating over the sequential quarters. The management has guided visibility of 10-13GW of power sector orders. However, the headwinds in the power sector such as domestic fuel availability and land acquisition issues may delay these projects.

Exhibit 9: Order inflow vs Revenues estimates

200,000 160,000 120,000 153,737 157,611 164,145 159,639 161,046 146,541 80,000 40,000 1QFY13 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 2QFY13 22.1 17.6 30 14.1 7.9 4.8 (7.0) 20 (17.8) (16.7) (24.1) 10 0 135,000 132,900 122,300 (10) (20) (30)

Exhibit 10: Order book to sales (x)

5.0 4.5 4.0 3.5 3.0 2.5 2.0 2QFY10 3QFY10 4QFY10 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 1QFY13 4.3 4.4 4.3 4.3 4.2 4.1 3.9 3.7 3.6 3.1 2.8 2.7 2.5 2QFY13

Order Backlog (` cr, LHS)

Growth (yoy %, RHS)

Source: Company, Angel Research

Source: Company, Angel Research

Exhibit 11: Orders won during the quarter

Order details Power Exports Industrial Segment order flows Total order inflows*
Source: Company, Angel Research Note :Total order inflows includes a adjustment of `20cr.

Value (` Cr) 1,942 15 1,216 3,157

Outlook
Deteriorating dynamics in the BTG space: The recent trend in biddings and projects wins indicates that BHELs leadership position is under threat, thus hinting at a loss in its market share going ahead. Further, given the structural issues faced by the power sector, times look tough for the BTG players. To remain under pressure: BHEL is trading at historically low valuations of 9.1x and 10.3x on FY2013E and FY2014E EPS estimates respectively, owing to 1) weak order inflow; 2) weak investment capex due to a high interest rate regime, which could take more time to gather momentum than earlier anticipated; and 3) changing competitive dynamics in the BTG space with strong capacity additions. We believe these concerns are far from over and, hence, expect the stock to remain under pressure and maintain our Neutral view. Outlook and valuation: Given the strong competition (domestic as well as international), declining order flows and a weak capex cycle, we expect BHELs profit, margin and ROE to decline from the current levels. Hence, the cheaper valuations of 9.1x FY2013 PE and 10.3x FY2014 PE respectively, are largely

October 31, 2012

BHEL | 2QFY2013 Result Update

overshadowed by structural issues plaguing the company. We continue to remain Neutral on the stock. Change in estimates: We maintain our order inflow and revenue estimates for FY2013E and FY2014E; however we reduce out EBITDA margins estimates, thereby leading to reduced EBITDA and PAT estimates for FY2013E and FY2014E.

Exhibit 12: Change in estimates

FY2013E (` cr) Earlier estimates
47,801 9,082 6,173

FY2014E Var. (%)

0.0 (2.7) (2.4)

Revised estimates
47,801 8,843 6,025

Earlier estimates
43,757 8,226 5,561

Revised estimates
43,757 7,876 5,346

Var. (%)
0.0 (4.4) (4.0)

Revenue EBITDA PAT

Source: Company, Angel Research

Exhibit 13: PE Band Chart

900 750 600 450 300 150 0 May-07 May-08 May-09 May-10 May-11 May-12 25x Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12

Share Price (`) Source: Company, Angel Research

10x

15x

20x

October 31, 2012

BHEL | 2QFY2013 Result Update

Exhibit 14: Peer comparison

Company ABB* BHEL BGR Energy Crompton Greaves Jyoti Structures KEC International Thermax Reco. Sell Neutral Neutral Accum. Buy Buy Neutral CMP (`)
737 225 264 124 45 63 581

Tgt. price (`)

593 141 54 73 -

Upside (%)
(19.5) 13.7 20.0 15.9 -

P/BV(x) FY13E
5.6 2.7 1.5 2.0 0.5 1.3 3.7

P/E(x) FY13E
51.0 9.1 8.8 11.4 4.1 7.0 19.6

FY2011-13E FY14E
29.8 10.3 8.2 10.6 3.4 5.5 20.5

RoE (%) FY13E

11.6 33.5 15.3 11.9 10.8 25.1 18.4

FY14E
4.9 2.3 1.4 1.7 0.5 1.1 3.3

EPS CAGR
68.4 (13.2) (3.4) 33.4 5.9 32.1 (8.9)

FY14E
17.6 24.5 16.7 15.0 12.3 24.0 18.2

Source: Company, Angel Research

Company Background
BHEL is the largest manufacturer of power equipment (boiler and turbine generators) in India with a ~65% market share. The company operates in two segments - power and industry. The company has 15 manufacturing facilities spread across the country with a combined manufacturing capacity of 15GW p.a. and is planning to reach 20GW p.a. by FY2012E. Sets produced by BHEL account for ~62% of India's installed power capacity, which generate ~74% of India's power. Notably, BHEL is the first domestic company to foray into the supercritical technology.

October 31, 2012

BHEL | 2QFY2013 Result Update

Profit & loss statement (Consolidated)

Y/E March (` cr) Total Income % chg Net Raw Materials Other Mfg costs Personnel Other Total Expenditure EBITDA % chg (% of Net Sales) Depn & Amort. EBIT % chg (% of Net Sales) Interest & other Charges Other Income (% of PBT) Others Recurring PBT % chg Extraord. Exp/(Inc.) PBT (reported) Tax (% of PBT) PAT (reported) Add: earnings of associate Less: Minority interest (MI) Prior period items PAT after MI (reported) ADJ. PAT % chg (% of Net Sales) Basic EPS (`) Fully Diluted EPS (`) % chg FY2009 27,012 36.9 16,234 3,593 3,020 22,846 4,166 12.5 15.4 282 3,884 14.0 14.4 35 978 20.2 11.2 4,838 9.2 4,838 1,723 35.6 3,115 3,115 3,115 8.9 11.5 12.7 12.7 8.9 FY2010 33,653 24.6 19,626 1,612 6,590 27,828 5,825 39.8 17.3 339 5,486 41.2 16.3 37 1,165 17.6 7.2 6,621 36.9 6,621 2,294 34.6 4,327 4,327 4,327 38.9 12.9 17.7 17.7 38.9 FY2011 42,538 26.4 22,767 5,744 5,453 33,963 8,575 47.2 20.2 478 8,097 47.6 19.0 56 1,027 11.3 (1.8) 9,066 36.9 9,066 3,012 33.2 6,053 6,053 6,053 39.9 14.2 24.7 24.7 39.9 FY2012 FY2013E FY2014E 48,355 13.7 27,734 5,121 5,530 38,385 9,971 16.3 20.6 803 9,167 13.2 19.0 53 1,272 12.3 (19.1) 10,367 14.4 10,367 3,280 31.6 7,087 7,087 7,087 17.1 14.7 29.0 29.0 17.1 47,801 (1.1) 27,008 6,023 5,927 38,958 8,843 (11.3) 18.5 827 8,016 (12.6) 16.8 70 980 11.0 8,926 (13.9) 8,926 2,901 32.5 6,025 6,025 6,025 (15.0) 12.6 24.6 24.6 (15.0) 43,757 (8.5) 25,161 5,513 5,207 35,881 7,876 (10.9) 18.0 937 6,939 (13.4) 15.9 69 1,050 13.3 7,920 (11.3) 7,920 2,574 32.5 5,346 5,346 5,346 (11.3) 12.2 21.8 21.8 (11.3)

Note: Some of the figures from FY2011 onwards are reclassified; hence not comparable with previous year numbers

October 31, 2012

BHEL | 2QFY2013 Result Update

Balance Sheet (Consolidated)

Y/E March (` cr) SOURCES OF FUNDS Equity Share Capital Preference Capital Reserves& Surplus Shareholders Funds Minority Interest Total Loans Deferred Tax Liability Other long term liablities Total Liabilities APPLICATION OF FUNDS Gross Block Less: Acc. Depreciation Net Block Capital Work-in-Progress Goodwill Investments Current Assets Cash Loans & Advances Other Current liabilities Net Current Assets Other non CA Total Assets 5,501 3,836 1,665 1,157 6 10,330 2,342 350 6,858 4,249 2,609 1,552 6 9,856 2,662 407 8,344 4,734 3,610 1,757 11 44,677 9,707 3,504 310 30,095 14,581 7,398 27,357 10,017 5,499 4,519 1,763 6 50,048 6,734 3,105 152 34,086 15,961 9,545 31,794 11,016 6,300 4,716 1,785 6 54,201 7,929 3,346 269 34,222 19,979 9,545 36,031 12,417 7,238 5,180 1,783 6 53,276 6,737 3,282 317 31,435 21,841 9,545 38,355 11,245 14,516 490 490 490 19,666 20,155 196 (2,165) 9,171 27,357 490 24,914 25,403 5 369 (1,549) 7,567 31,794 490 29,117 29,607 1,406 (1,549) 6,567 36,031 490 32,642 33,132 906 (1,549) 5,867 38,355 FY09 FY10 FY11 FY12 FY13E FY14E

12,429 15,406 12,919 15,896 167 148

(1,840) (1,529)

36,986 43,002

28,569 32,656 8,417 10,346 2 11,245 14,516

Note: Some of the figures from FY2011 onwards are reclassified; hence not comparable with previous year numbers

October 31, 2012

BHEL | 2QFY2013 Result Update

Cashflow (Consolidated)
Y/E March (` cr) Profit before tax Depreciation (Inc)/Dec in Working Capital Less: Other income Direct taxes paid Others Cash Flow from Operations (Inc.)/Dec.in Fixed Assets (Inc.)/Dec. in Investments Other income Cash Flow from Investing Issue of Equity Inc./(Dec.) in loans Dividend Paid (Incl. Tax) Others Cash Flow from Financing Inc./(Dec.) in Cash Opening Cash balances Closing Cash balances FY09 4,838 282 1,411 785 2,184 (121) 3,440 (1,557) 2 978 (577) 71 991 (920) 1,944 8,386 10,330 FY10 6,621 339 (2,403) 833 2,021 (241) 1,463 (1,752) 1,165 (587) (18) 1,332 (1,350) (474) 10,330 9,856 FY11 9,066 547 (4,385) 647 2,942 654 2,292 (1,691) (5) 1,027 (669) 48 1,821 (1,773) (150) 9,856 9,707 FY12 10,367 806 837 3,197 462.9 (921) 5 1,272 (402) 172 1,821 (1,649) (2,972) 9,707 6,734 FY13E 8,926 827 980 2,901 4 2,018 980 (40) 1,038 1,821 (783) 1,195 6,734 7,929 FY14E 7,920 937 (3,754) 1,050 2,574 1,479 (1,400) 1,050 (350) (500) 1,821 (2,321) (1,192) 7,929 6,737

(8,523) (3,857)

(1,680) (1,020)

Note: Some of the figures from FY2011 onwards are reclassified; hence not comparable with previous year numbers

October 31, 2012

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BHEL | 2QFY2013 Result Update

Key Ratios
Y/E March Valuation Ratio (x) P/E (on FDEPS) P/CEPS P/BV Dividend yield (%) EV/Sales EV/EBITDA EV/Total Assets OB/Sales Per Share Data (`) EPS (Basic) EPS (fully diluted) Cash EPS DPS Book Value DuPont Analysis EBIT margin (%) Tax retention ratio Asset turnover (x) ROIC (Post-tax) (%) Cost of Debt (Post Tax) (%) Leverage (x) Operating RoE (%) Returns (%) RoCE (Pre-tax) Angel RoIC (Pre-tax) RoE Turnover ratios (x) Asset Turnover (Gross Block) Inventory / Sales (days) Receivables (days) Payables (days) WC cycle (ex-cash) (days) Solvency ratios (x) Net debt to equity Net debt to EBITDA Int. coverage (EBIT / Int.) (0.8) (2.4) 110.4 (0.6) (1.7) 149.5 (0.7) (1.1) 143.6 (0.4) (0.6) 172.6 (0.3) (0.7) 114.5 (0.2) (0.7) 100.0 5.3 92 189 343 (16) 5.4 93 200 332 (8) 5.5 87 176 395 23 5.2 91 219 437 53 102 255 416 81 3.7 102 255 399 113 32.4 227.9 26.3 37.7 176.3 30.0 35.5 71.4 42.3 29.2 42.8 49.5 22.6 30.4 33.5 17.9 23.4 24.5 14.4 0.6 10.3 95.7 17.3 (0.8) 34.0 16.3 0.7 7.5 80.3 15.2 (0.6) 40.5 19.0 0.7 3.3 41.6 21.8 (0.7) 26.9 19.0 0.7 2.1 27.0 12.8 (0.4) 21.3 16.8 0.7 1.7 19.2 5.3 (0.3) 14.7 15.9 0.7 1.4 14.9 4.1 (0.2) 12.2 12.7 12.7 13.9 3.5 52.8 17.7 17.7 19.1 4.7 64.9 24.7 24.7 26.7 6.4 52.1 29.0 29.0 32.2 6.4 64.8 24.6 24.6 28.0 6.4 82.0 21.8 21.8 25.7 6.4 96.4 17.7 16.2 4.3 1.5 1.7 10.8 3.4 4.1 12.7 11.8 3.5 2.1 1.3 7.8 2.8 4.2 9.1 8.4 4.3 2.8 1.1 5.3 1.5 3.8 7.8 7.0 3.5 2.8 1.0 4.9 1.5 2.7 9.1 8.0 2.7 2.8 1.0 5.5 1.3 2.5 10.3 8.8 2.3 2.8 1.1 6.3 1.2 2.5 FY2009 FY2010 FY2011 FY2012E FY2013E FY2014E

Note: Some of the figures from FY2011 onwards are reclassified; hence not comparable with previous year numbers

October 31, 2012

11

BHEL | 2QFY2013 Result Update

Research Team Tel: 022 3935 7600

E-mail: research@angelbroking.com

Website: www.angelbroking.com

DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

BHEL No No No No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors.

Ratings (Returns):

Buy (> 15%) Reduce (-5% to -15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

October 31, 2012

12