Bharat Bijlee - Awaiting Operating Leverage To Kick In: Anand Rathi

Anand Rathi Report

With Rs 3.7 billion/0.3 billion/0.2 billion revenue/Ebitda/adjusted profit after tax down 15%/ 10%/6% YoY, Bharat Bijlee Ltd. reported a weak Q1, though considering the short order-book cycle and dull quarter (general elections) in terms of ordering, execution was understandably affected.

The multi-quarterhigh gross margin was pulled down by more-than-usual employees and other expenses. This was due to capacity expansion underway at its Airoli plant in Navi Mumbai.

Given its fundamentals and robust domestic demand, the company would benefit. We, however, do not cover this stock.

Risks: Keener competition from others in the transformer/motor segments.

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