Shares of Bharat Heavy Electricals (BHEL) tanked 9.5 percent on Tuesday after global research house Citi downgraded the stock to Sell from Neutral with a target at Rs 34 per share.

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The stock declined 9.5 percent to hit an intraday low of Rs 38.50 per share in the BSE. The stock price has surged over 118 percent from its 52-week low of Rs 19.20 hit on March 25, 2020. At 11:05 am, shares were trading 8.5 percent lower at Rs 38.90 as against a 1.6 percent fall on Sensex.

According to Citi, after a recent sharp rally, BHEL is trading at ~0.5x P/BV which appears unappealing given 4 percent RoE and risks to cash flows and profits.

It said that the high receivables continue to pressure the cash flows, while success in new areas will take time.

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