BHEL stock

POSTED BY vj-manutdfan ON December 12, 2011 5:40 pm COMMENTS (2)

Hi Guys,
q1) I was going through the bhel stock financials,it has a eps of 122 and pe ratio of 10.75.What suprised me is that the book value is 411 and stock is trading at 257(as per today’s rate).Why market has not pushed the stock price towards the book value.why there is such a gap between book value and original stock price.?the eps has also increased by around 40% compared to last year.I was tempted to buy this for long term but i wanted to make sure this is not a value trap.please tell me if there is any trap in this stock

q2)I came to know that diluted eps is much more realistic than basic eps but I was not able to find out the diluted eps value.Can u pls tell me anysite where i can get this data

Thanks in advance
Vijayshankar

2 replies on this article “BHEL stock”

  1. Syed Sagheer says:
    December 13, 2011 at 5:12 pm

    BHEL underwent a 1:5 split. Its current Book Value is Rs82 as on 2011 and estimated 2012 book value is Rs99. Also its EPS is 23 as of last year and expected Rs26. So it is trading at 11x PER forward and 2.5x book, a definite de rating but not under valued given the current market situation. Cap goods will remain under pressure, especially BHEL since it has heavy competition which is eating into its margins. Also the FPO overhand will act as ceiling for the stock

    Hope this clarifies things!

    Reply
  2. ashal jauhari says:
    December 12, 2011 at 7:09 pm

    Dear vj-manutdfan, BHEL is a capital goods & infra related stock. Under the current situation, Capex of most cos. are either slowed down or scrapped altogether. So the going is tough. For the current market situation, please make your own call for infra & capital goods stocks for next 3Y or so.

    I hope you ‘ll be able to pick now.

    Thanks

    Ashal

    Reply

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