also among the top gainers in the recent rally, BHEL continues to trade at a huge discount of about 60% to its past valuation due to a striking slowdown in its order-book. Last week, BHEL announced over 50% discount in provisional net earnings for 2013-14.
According to Jefferies analysed cyclical stocks using EV (enterprise value) to sales barometer for manufacturing companies. It noted that the implied three-year growth rate to justify current stock price for Cement stocks, L&T, Hero, M&M, BHEL and Crompton are lower than 15-year median growth expectations.
While some bleuchips are still maintaining a gap to their historical averages, the surge in cement stocks (ACC Ambuja), private sector banks (IndusInd and Kotak Mahindra bank) and realty major DLF appears overdone as each of these stocks have more than converged with their past averages.