Bhel order book at risk of cancellation due to coal scam

Financial-services firm Nomura has said that about 28 percent of Bhel’s order book is at risk of cancellation or deferment due to either non-availability of coal linkage or cancellation of existing linkage, following the coal allocation scam.

Coalgate questioned the government’s practice of awarding coal mining concessions to companies without competitive bidding, potentially costing the treasury billions of dollars in lost revenues.

[caption id=“attachment_447701” align=“alignleft” width=“380”]  Reuters[/caption]

Nomura added that the coal allocation scam puts further risks to its FY13 earnings estimates for the company.

In another report, Macquarie said “Bhel is a value trap, stay clear” as in its worst-scenario analysis, Bhel’s earnings can decline by 65 percent in FY15 from FY12 levels and the stock could move closer to Rs 100.

More from Investing

MSMEs are breaking the traditional convention. Look who’s funding them Scale-up your startup without an investor! Here’s how

At 1:15 pm, shares in Bhel were up 1.5 percent at Rs 204.20, after falling 8.1 percent in previous 2 sessions.

Reuters