A couple of brokerage firms have positive on Bharat Heavy Electrical Ltd (BHEL) on a technical basis as they believe that the multibagger PSU counter has moved out from its consolidation phase, after a sharp correction since its quarterly earnings, is set for a rebound on technical parameters.
Bharat Heavy Electricals is an Indian central public sector undertaking and the largest government-owned electrical industrial technology. It is owned by the Government of India, with administrative control by the Ministry of Heavy Industries. The stock has zoomed nearly 500 per cent in the last 20 months.
LKP Securities said that BHEL has broken out of a consolidation phase on the 2-hour timeframe, signaling increased optimism.. Additionally, it has moved higher after finding support at the lower band of the falling channel. The momentum indicator RSI is showing a bullish crossover.
"Based on this technical setup, the stock could potentially reach Rs 288 in the near to short term. However, a drop below Rs 254 may push the stock back into consolidation," it added, suggesting investors to buy the stock around Rs 268-levels.
Shares of Bharat Heavy Electricals rose about a per cent to Rs 267.75 on Wednesday, commanding a total market capitalization of more than 93,000 crore. The scrip had settled at Rs 264.85 in the previous trading session on Tuesday. Shares of BHEL have corrected 21 per cent from its 52-week high at Rs 335.40 hit in July 2024. It has doubled investors' wealth from its 52-week lows.
BHEL has seen a 21 per cent correction from its recent highs over the last two and a half months. BHEL has rallied significantly from Rs 64 to Rs 332 in about 18 months since 2023. Its Q1 results revealed weaker-than-expected execution and profitability, contributing to a profit-booking phase, said Ameya Ranadive, CMT CFTe, Senior Technical Analyst at StoxBox.
"The stock is presently near minor support at Rs 260. A long position can be considered if the Rs 265 level is sustained for several days. A dynamic stop loss can be placed below the 200-day EMA, near Rs 245, with potential mid-term targets of Rs 295 to Rs 315," it said.
The state-owned BHEL reported the widening of its consolidated net loss to Rs 211.40 crore for the June quarter, on account of higher expenses. Revenue from operations increased 9.6 per cent to Rs 5,845 crore in the June quarter. As of April 1, BHEL had an orderbook of around Rs 1,31,600 crore.
On a fundamental basis, Antique Stock Broking has given BHEL a target price of Rs 365 with a 'buy' rating on the stock. On the other hand, Kotak Institutional Equites has suggested to sell BHEL with a target price of Rs 100, suggesting nearly two-third downside in the stock.