BHEL share price: Technical charts look strong, hint at 14% rise in short term, says Choice Broking

BHEL share price: Brokerage firms continue to remain positive on shares of Bharat Heavy Electricals Ltd (BHEL). Both technical and fundamental analysts are largely positive on the counter and the former one expects the stock to post about 14 per cent gains in the counter in a month.

Shares of BHEL rose nearly 5 per cent to Rs 4.7 per cent to Rs 204.50 on Tuesday, before finally settling at Rs 203.90 for the session. The company commanded a total market capitalization of just shy of Rs 71,000 crore-mark. However, the stock is down about 40 per cent from its 52-week high at Rs 335.40, hit in July 2024.

Choice Broking believes that shares of BHEL are poised for a 14 per cent rally in a month on the basis of sound technical parameters. The RSI on the daily chart is at 54.8, rebounding from the oversold zone, which strengthens the reversal signal. It is trading above the 20 EMA and is near the 100 EMA and a sustained move above this will further confirm the bullish bias, it said.

"BHEL has recently formed an inverted head and shoulders pattern on the daily chart. The stock is on the verge of a breakout with significant volume, indicating strong bullish momentum. This reversal pattern has emerged at the bottom of the trend, signaling a potential trend reversal," it said.

"It offers a favorable buying opportunity for traders. If the stock manages to close above Rs 202.5, it could trigger a strong move in the short term, with a target of Rs 229.7. On the downside, Rs 198 will act as an immediate support level, and any dip towards this level can be considered a buying opportunity. A stop-loss can be placed at Rs 188 to manage downside risk," Choice added.

BHEL reported an increase of 170 per cent YoY to Rs 124 crore, while its revenue grew by 32 per cent from last year to Rs 7,277 crore in the December 2024 quarter. Its Ebitda grew by 40 per cent YoY to Rs 304 crore, while margin expanded 30 basis points to 4.2 per cent for the reported quarter.

On a fundamental basis, Phillip Capital said that Capital goods companies are likely to see 15 per cent/10 per cent order book growth in FY 26/27 after 22 per cent growth in FY25. Healthy growth will be seen for BHEL in FY26 and FY27. It has a 'buy' rating on BHEL with a target price of Rs 270 on the stock.

Among other brokerages, Antique Stock Broking has a 'buy' rating on BHEL with a target price of Rs 300, while Morgan Stanley remains 'overweight' on the company with a target price of Rs 352. Prabhudas Lilladher has an 'accumulate' rating on BHEL with a target price of Rs 226. On the other hand, Kotak Institutional Equities has a 'sell' rating on the stock with a target price of Rs 115.