Brokerage firm ICICI Securities has raised its price target on state-run BHEL to ₹300, which is double of their earlier target of ₹150 per share. The revised price target implies another 50% upside from current levels.
BHEL's gross margins are also likely to improve by 300 basis points from current levels in the next few years with execution improving by 30% to 40% led by a huge order book, ICICI Securities said.
ICICI Securities' ₹300 price target on BHEL is the highest target for the company among analysts who track the stock.
But despite a 150% surge over the last 12 months, not everybody on the street is convinced of BHEL's prospects. Only five out of the 18 analysts who track the stock have a "buy" recommendation on the stock, while 12 of them have a "sell" rating.
Kotak Institutional Equities in its note on BHEL mentioned that the move in the stock is a clear violation of any "reasonable framework." The note further said that BHEL's current market capitalisation can only be justified under a very bullish set of assumptions. Despite this, all scenarios point to the fact that BHEL's net income will be far lower than its market capitalisation.
Shares of BHEL are trading 0.3% higher at ₹201.85.
First Published: Jan 16, 2024 2:46 PM IST