Bharat Heavy Electricals Limited (BHEL), the country’s leading power and industrial electrical equipment manufacturer, has witnessed a strong rally over the past year, with its share price zooming nearly fourfold to hit a 13-year high of ₹269.35 intraday today, rebounding from its 52-week low of ₹67.63 touched on April 6, 2023. The state-owned stock has outperformed the BSE benchmark Sensex and BSE India Infrastructure index in terms of returns in the last one year, amid improvement in operating revenue, and a strong order book (with executable orders in hand of ₹1.08 lakh crore as on December 31, 2023).
On Monday, BHEL shares opened higher for the fifth straight session at ₹237, against the previous closing price of ₹235.85 on the BSE. During the session, the PSU stock gained as much as 15% to hit a record high of ₹271.20, registering its biggest single-day surge since 12.5% on September 1 last year. The stock witnessed a surge in buying as more than 1 crore shares changed hands over the counter as compared to the two-week average volume of 14.47 lakh stocks, while the market capitalisation rose to ₹92,330 crore.
The PSU stock got a boost today after the board of state-run peer NTPC approved an investment of ₹17,195.3 crore for the third phase of the Singrauli Super Thermal Power Project. BHEL is the sole bidder for the construction of the Singrauli plant.
The share price of BHEL has risen nearly 22% in the last five sessions after it formed a joint venture with Coal India to set up an ammonium nitrate plant through surface coal gasification (SCG) technology route. Coal India will hold a 51% stake in the joint venture, while BHEL will own 49% shares in the entity. Both PSUs will have the right to nominate three directors each on the board of the joint venture company.
In the last one year, BHEL shares have delivered 260% returns as compared to a 23.5% rise in Sensex and 106% growth in BSE India Infrastructure index. The counter surged 38.5% in the calendar year 2024, while the Sensex and Infrastructure index added 2.2% and 23% during the same period.
The rally has been fuelled by resurgence in demand for PSU stocks by investors in the backdrop of the government’s increased capital expenditure in areas like railways and defence and the overarching emphasis on ‘Make in India’.
BHEL's order book at the end of the December quarter of financial year 2024 stood at ₹36,000 crore, with order inflows of ₹2,500 crore during Q3 FY24. Besides, the company also received 3x800MW NLC Talabira (₹19,400 crore) and 1x800 MW Yamuna Nagar (₹5,500 crore) in Jan’24. With this, the company has crossed ₹60,000 crore order book during 10MFY24. Additionally, it is the sole bidder in 2x800MW NTPC Singrauli EPC tender valuing around ₹12,000 crore. With these, BHEL has an orderbook of ₹108,600 crore as on 31st Dec’23, up 137% YoY.
During the third quarter ended December 31, 2023, BHEL reported a standalone net loss of ₹163 crore for the quarter, compared to net profit of ₹31 crore in the year-ago period. The standalone revenue from operations rose by 4.5% to ₹5,504 crore in Q3 FY24, compared to ₹5,264 crore recorded in the same period last year.
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