bhel working template.xlsx

8/12/2019 BHEL Working Template.xlsx

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BHEL

Valuation Exercise

Annual Report

80% Supply equipment to power sectors

What does the company do? Fortunes would be linked to power sector growth

Who is the customer

Who is the competition

Key Drivers Understand growth in power sector - Capacity Addition i

What has been happening with the company Understand their revenue and cost drivers

Capacity data

Working Capital

FinShiksha



n India



BHEL

( in Rs crs) FY10 FY11 FY12 FY13 FY14 FY15

Revenue from Operations 34,154 43,337 49,510 50,156 40,337

Less: Excise Duty 1,292 1,771 2,282 2,539 1,949

Net Revenue from operations 32,861 41,566 47,228 47,617 38,388

Other Operational Income 493 680 751 807 720

Other Income 1,155 1,021 1,266 1,122 1,616

Total Operating revenue 33,355 42,247 47,979 48,424 39,108

Expenses

Cost of Material 20,672 23,209 28,908 27,899 21,461

Increase in WIP -787 -127 -823 116 1,057

Employee expense & benefits 6,449 5,397 5,466 5,753 5,934

Other Manufaturing and operating expense 2,155 2,536 3,223 3,777 6,136

Provisions -934 2,715 1,403 1,566

Cost of job done for internal use -121 -69 -104 -76

Total Operational Expense 27,435 33,661 38,072 39,035 34,588

EBITDA 5,920 8,585 9,907 9,389 4,520

Depreciation & Ammortization expense 458 544 800 953 983

EBIT 5,462 8,041 9,107 8,436 3,537

Interest 34 55 51 125 133 Prior period adjustments 7 -2 -19 - -6

EBT 6,591 9,005 10,302 9,433 5,014

Taxes 2,280 2,994 3,262 2,818 1,553

PAT 4,311 6,011 7,040 6,615 3,461

Dividend Paid 1,332 1,456 1,794 1,649

Shares OS 244.76 244.76 244.76 244.76

EPS 17.61 24.56 28.76 27.03

Dividend Per Share 5.44 5.95 7.33 6.74

FinShiksha



FY16 FY17 FY18



BHEL


Liabilities

ShareHolder Funds

Share Capital 490 490 490 490 490

Reserves & Surplus 15,428 19,664 24,884 29,955 32,557

Total Share holder's funds 15,917 20,154 25,373 30,445 33,047

Non-Current Liabilities

Long term Borrowings - 102 123 129 105

Advance from customers 8,663 6,829 4,959 6,600

Other Long Term Borrowings 128 479 729 830

Long term Provisions - 4,923 5,006 5,933 7,496

Total Non Current Liabilities 128 14,168 12,687 11,851 14,201

Current Liabilities

Short Term Borrowing - 1,286 2,550

Trade Payables 7,580 8,095 10,255 9,675 8,719

Other Current Liabilities 20,444 14,170 15,825 13,862 11,444

Short Term Provisions 4,418 2,673 2,636 3,009 2,830

Total Current Liabilities 32,442 24,939 28,716 27,832 25,543

Total Liabilities 48,487 59,260 66,776 70,128 72,791

Assets

Non-Current Assets

Tangible Assets 2,415 3,265 4,161 4,315 5,335 Intangible Assets - 136 136 144

Capital Work in Progress 1,551 1,723 1,325 1,134

Intangible Assets under development - 10 23 38

Total Fixed Assets 3,966 5,135 5,644 5,631 5,335

Non Current Investments 80 439 462 429 420

Deferred tax assets 1,527 2,164 1,546 1,551 1,969

Long term loans and advances - 883 900 905 1,167

Other Non Current Assets - 7,362 9,384 10,654 11,881

Current Assets

Inventories 9,235 10,852 13,548 11,764 9,798

Trade Receivables 20,689 20,104 26,357 29,234 28,072

Cash and Cash Equivalent 9,790 9,630 6,672 7,732 11,873

Short term loans 2,793 2,383 2,112 2,029 2,024

Other current assets 407 310 151 199 252

Total Current Assets 42,914 43,278 48,839 50,958 52,019

Total Assets 48,487 59,260 66,776 70,128 72,791

FinShiksha



Balanced 0 0 0 0

Working Capital 683 8,709 13,452 15,394

Change in Working Capital 2,429 8,027 4,743 1,942



FY16 FY17 FY18



FinShikshaBHEL


Operating Cash Flow

Net Profit

Non Cash Charges

Increase in LT provisions

Change in Working Capital

Net Operating CF -

Financing Cash flow

Issue of share capital

New loans

Dividends distributed

Net Financing Cash flow -

Investing cash flow

Capital Expenditure

Other investments

Net Investing Cash flow -

Net Cash Flow -

Opening Cash

Closing Cash 7,732



BHEL

FY10 FY11 FY12 FY13

Liquidity Measures

Inventory Turnover Ratio Sales / Inventory 3.61 3.89 3.54 4.12

Receivable Turnover Ratio

Payable Turnover ratio

Inventory Days

Receivale days

payable days

Net working capital

Net working capital turnover ratio

Net working capital Days

Profitability Measures

EBITDA Margin EBITDA / Net Sales 17.7% 20.3% 20.6% 19.4%

EBIT Margin EBIT / Net Sales 16.4% 19.0% 19.0% 17.4%

PAT Margin

Return of equity

Asset Turnover Ratio

Financial Leverage

RoE Net Profit / Equity 27.1% 29.8% 27.7% 21.7%

Return on Asset

Return on Capital Employed

Leverage Ratio

Interest Coverage Ratio EBIT / Interest

Debt Equity Ratio

Debt Asset Ratio

Operating Performance Ratios

Fixed Asset Turnover Ratio

Valuation ratios

Price to Earnings RatioPrice to book ratio

Price/ sales ratio

Price

BPS

Sales/share

FinShiksha



FY14 FY15 FY16 FY17 FY18

3.99 #DIV/0! #DIV/0! #DIV/0! #DIV/0!

11.6% #DIV/0! #DIV/0! #DIV/0! #DIV/0!

9.0% #DIV/0! #DIV/0! #DIV/0! #DIV/0!

10.5% #DIV/0! #DIV/0! #DIV/0! #DIV/0!



BHEL

8/5/2014

3/31/2014 3/31/2015 3/31/2016 3/31/2017 3/31/2018

FY13 FY14 FY15 FY16 FY17 FY18 Terminal Value

Net Profit

Non cash charges

Increase in Net Working Capital

Change In LT Provision

Net Borrowings

Capex

FCFE

PV FCFE

Number of days left

Number of years left

Risk Free Rate

Beta

Market Return

Cost of equity

Terminal Growth

PV of explict Period

PV of TVCash

Total Value

Shares OS

Fair value/Share

CMP

EV

FinShiksha



FY10 FY11 FY12 FY13

Revenue Drivers

Capacity MW 15,000 17,500 20,000 20,000

Order Book Rs Crore 144,300 164,100 135,300 115,100

New Order Booking Rs Crore 59,037 60,507 22,096 31,650

Power Sector Orders Rs Crore 41,982 46,393 14,012 25,560

Other Orders Rs Crore 17,055 14,114 8,084 6,090

Order Book as per Revenue Rs Crore 161,470 136,686 116,794

Order Book to Revenue Ratio 3.3 3.3 2.7

Power Capacity in India MW 220,000

Gross Revenue Rs Crore 34,154 43,337 49,510 50,156

Excise Duty as % of revenue % 3.8% 4.1% 4.6% 5.1%

Other Operational Income as % of revenue % 1.4% 1.6% 1.5% 1.6%

Cost Drivers

Raw Material Cost Rs Crore 19,886 23,082 28,085 28,015

Raw Material Cost as % of sales 60.5% 55.5% 59.5% 58.8%

Employee expense & benefits Rs Crore 6,449 5,397 5,466 5,753

Number of employees 46,274 46,748 49,390 48,399

Salary per employee 1,393,692 1,154,426 1,106,671 1,188,661Increase in Salary -17.2% -4.1% 7.4%

Other Manufaturing and operating expense Rs Crore 2,155 2,536 3,223 3,777

Other Manufaturing and operating expens as % of sales 6.6% 6.1% 6.8% 7.9%

Provisions Rs Crore -934 2,715 1,403 1,566

Provisions as % of sales -2.8% 6.5% 3.0% 3.3%

Depreciation Rs Crore 458 544 800 953

Gross Fixed Assets (Tangible + Intangible) Rs Crore 6,580 8,050 9,707 10,783

Depreciation as % of GFA 7.0% 6.8% 8.2% 8.8%

Interest Cost Rs Crore 34 55 51 125

Interest Cost as % of total debt #DIV/0! 54% 42% 9%

Taxation Rs Crore 2,280 2,994 3,262 2,818

Effective Tax Rate 45% 33% 32% 30%

FinShiksha



Capex Assumptions

Gross Fixed Assets per MW Capacity 0.44 0.46 0.49 0.54

Capex on account of New Capacity

Maintenance Capex (Depreciation)

Accumulated Depreciation Rs Crore 4,165 4,649 5,410 6,324

Debt ScheduleNew Debt Raised

Old Debt Repaid

Net Debt Raised - - - -

Working Capital Analysis

Current Liabilities

Trade Payables Rs Crore 7,580 8,095 10,255 9,675

Other Current Liabilities Rs Crore 20,444 14,170 15,825 13,862

Short Term Provisions Rs Crore 4,418 2,673 2,636 3,009

Current Assets

Inventories Rs Crore 9,235 10,852 13,548 11,764

Trade Receivables Rs Crore 20,689 20,104 26,357 29,234

Short term loans Rs Crore 2,793 2,383 2,112 2,029

Sales Per Day Rs Crore 90 114 129 130

In terms of Days Sales Outstanding

Current Liabilities

Trade Payables days 84 71 79 74 Other Current Liabilities days 227 124 122 106

Short Term Provisions days 49 23 20 23

Current Assets

Inventories days 103 95 105 90

Trade Receivables days 230 177 204 224

Short term loans days 31 21 16 16



FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22

20,000

110,763

36,000

30,000

6,000

110,763

2.7

306000 425000

40,337

4.8%

1.8%

MW 119,000 Capacity A

40% Bhel's mar

MW 47,600 BHEL Orde

22,518 Realization

58.7% 166,600

5,934

48,399

1,226,0583.1%

6,136

16.0%

-

0.0%

983

12,642

7.8%

133

5%

1,553

31%



7,307

8,719

11,444

2,830

9,798

28,072

2,024

105

83 109

27

93

267

19



dition over next 5 years

et share

bhel working template.xlsx

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