Bharat Heavy Electricals (BHEL) Shares fell nearly 6% in early trade on November 14 after Goldman Sachs maintained its “sell” call on the stock.

The state-owned power equipment maker on November 11 reported a consolidated net profit of Rs 12.1 crore in the September quarter amid higher other income.

BHEL’s sales revenue edged up to Rs 4,927.95 crore from Rs 4,910.62 crore, a regulatory filing showed. However, the report said that the company’s other revenue more than quadrupled to Rs 216.17 crore in the second quarter of FY23, bringing total revenue to Rs 5,418.74 crore.

Total company revenue increased by 4.2% from Rs 5,197.25 crore in the corresponding period of the previous fiscal.
Higher sales in the power segment also supported revenue growth. The power segment grew 6.36% year-on-year to Rs 3,814.35 crore. However, industrial sales fell nearly 16% in July-September to Rs 1,113.6 crore.

BHEL posted a standalone net profit of Rs 10.29 crore, compared to a loss of Rs 67.49 crore in the corresponding period of the previous financial year. Standalone total revenue stood at Rs 5,427.07 crore, an increase of 4.64% over the previous year.

Bharat Heavy Electricals was quoted at Rs 70.10 on the BSE at 9:45 am, down Rs 4.30 or 5.78%. Global research firm Goldman Sachs maintained its ‘sell’ call on the stock with a target price of Rs 30 per share, representing a drop of more than 57% from the current market price.

The brokerage sees weak results as the path to profitability remains uncertain. “Coal power lacks opportunities, and diversification away from its key sectors is likely to be gradual. We expect the company to be profitable in FY24,” it added.