BHEL shares gain 2% on securing ₹4,000 crore order from Adani Power unit

Shares of Bharat Heavy Electricals Ltd. (BHEL) rose nearly 2% in intraday trade on Monday after the state-run company informed exchanges that it has received an order worth ₹4,000 crore from Mahan Energen (formerly known as Essar Power MP), a wholly owned subsidiary of Adani Power. The stock snapped a four-session losing streak after losing 5% during the same period.

Ahead of the announcement, BHEL shares opened 0.7% higher at ₹98.70 against the previous closing price of ₹98 on the BSE. Reacting to the news, the PSU stock gained as much as 1.9% to hit an intraday high of ₹99.9, with nearly 10 lakh shares changing hands over the counter on the BSE. The market capitalisation rose to ₹34,700 crore.

Early this month, BHEL shares touched a 52-week high of ₹107.10 on August 1, 2023. The stock has nearly doubled in the last one year from its 52-week low of ₹51.80 touched on August 23, 2023. The PSU stock has risen 24.5% in the calendar year 2023; 41% in six months; and 5.5% in a month. The stock has fallen nearly 2% in a week.

BHEL informed exchanges this morning that it has bagged a contract from Adani Power unit for the supply of equipment (boiler, turbine, generator) and supervision of the erection and commissioning of a 2x800 MW power project based on supercritical technology at Bandhaura, Madhya Pradesh. The boiler and turbine generator are to be manufactured at BHEL’s Trichy and Haridwar plants respectively.

The timeline for completion of the supply of equipment - boiler, turbine, generator and associated auxiliaries along with control and instrumentation is 31 months. The deadline for erection and commissioning of the power project is 35 months.

Early this month, BHEL signed an MoU with Greenstat Hydrogen India Pvt. Ltd. for “potential collaboration opportunities in Green Hydrogen and derivatives in the Hydrogen Value Chain.” This partnership will pave the way for collaboration in Hydrogen value chain, contributing towards 'National Hydrogen Mission' of the Government of India, making India 'Atmanirbhar', it said in a BSE filing on August 5.

In July this year, the power generation equipment manufacturing company achieved a major milestone with the successful synchronisation of the 660 MW Unit-2 of the 1,320 MW Maitree Super Thermal Power Project (STPP) in Bangladesh.

BHEL, which comes under the Ministry of Heavy Industries, has reported a widening of consolidated loss at ₹343.89 crore in the first quarter ended June 30, 2023, compared with ₹187.99 crore in the same quarter last year. Revenue for the quarter rose by 7.1% to ₹5,003.4 crore in Q1FY24 against ₹4,672 crore in Q1FY23.

On the operational front, the EBITDA climbed 14.9% at ₹1,037.4 crore as compared to ₹902.7 crore in the same period last year. The EBITDA margin stood at 20.7% versus 19.3% a year ago.

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