Bharat Heavy Electricals fell 0.65% to Rs 106.95 at 09:18 IST on BSE after ratings agency CRISIL downgraded its rating on the long-term bank facilities of the company to CRISIL AA+/Negative from CRISIL AAA/Negative.
Meanwhile, the BSE Sensex was down 51.95 points, or 0.21%, to 24,742.01
On BSE, so far 38,772 shares were traded in the counter, compared with an average volume of 8.76 lakh shares in the past one quarter. The stock hit a high of Rs 107.50 and a low of Rs 106.55 so far during the day. The stock hit a 52-week high of Rs 289.85 on 21 July 2015. The stock hit a 52-week low of Rs 90.40 on 29 February 2016.
The large-cap company has an equity capital of Rs 489.52 crore. Face value per share is Rs 2.
The downgrade reflects CRISIL's belief that Bhel's business risk profile will remain constrained over the medium term by continued weak profitability and stretch in working capital cycle, CRISIL said in its report dated 9 March 2016. However, CRISIL reaffirmed its ratings on Bhel's short-term bank facilities at CRISIL A1+. CRISIL expects Bhel's profitability to remain under pressure, and its working capital stretched over the medium term on account of the challenging operating environment in the power sector. The rating may be further downgraded if project execution is slower than expected and costs remain high, leading to continued losses and a high receivable position, CRISIL said. Conversely, the outlook may be revised to stable if profitability improves, backed by a structural revival in the power sector, translating into faster project execution, and improvement in working capital position, CRISIL said.
Bhel reported net loss of Rs 1101.99 crore in Q3 December 2015 compared with net profit of Rs 212.60 crore in Q3 December 2014. Net sales declined 14% to Rs 5230.13 crore in Q3 December 2015 over Q3 December 2014.
Bhel is the largest engineering and manufacturing enterprise in India in the energy related/infrastructure sector. The company caters to the core sectors including power, transmission, industry, transportation, renewable energy, oil & gas and defence.
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