Shares of Bharat Heavy Electricals Limited (BHEL) experienced a significant boost, soaring by 12% on Monday, marking its most substantial single-day surge since September 1, 2021. The surge comes in the wake of another potentially sizable order in the pipeline.
The rise in BHEL’s stock is attributed to the board approval of a substantial investment by state-run peer NTPC. NTPC approved an investment of Rs 17,195.3 crore for the third phase of the Singrauli Super Thermal Power Project, a 2×800 MW project. Notably, BHEL was the sole bidder for the construction of the Singrauli plant, sparking optimism and driving the surge in BHEL’s shares.
As of the end of the first half of the financial year 2024, BHEL’s order book stands at a commendable Rs 1.14 lakh crore, with an order inflow of Rs 33,000 crore during the same period.
Earlier reports had hinted at BHEL being awarded the Talabira Power Project, valued at Rs 19,422 crore. The official disclosure on January 15 confirmed that NLC India had indeed awarded BHEL the Talabira Project, though the officially declared size was Rs 15,000 crore.
ICICI Securities, having the highest price target for BHEL at Rs 300, projects that the company’s order wins for the financial year 2024 could surpass Rs 65,000 crore. On the other hand, Jefferies, with an underperform rating and a price target of Rs 90, cautions that competitive pressures may impact margins and recommends exploring alternative investment avenues.
India’s Mutual Funds have displayed growing confidence in BHEL, steadily increasing their stake from 1.5% in June 2022 to a notable 6.27% by the end of December 2023.
As of the latest market update, shares of BHEL are trading at Rs 267.1, representing a remarkable 13.1% surge, marking the most substantial single-day gain since May 2021. Despite the recent surge, the stock remains 31% below its record high of Rs 390.67, set in 2007. The stock has exhibited a remarkable rise of 256% over the past 12 months.