BHEL shares jump 3% on Rs 11,800 crore order win; here are target prices

Shares of Bharat Heavy Electricals Ltd (BHEL) jumped 3 per cent in Friday's trade after the PSU said it received a Letter of Intent (LoI) from Chhattisgarh State Power Generation Company Limited (CSPGCL) for EPC package of 2x660 MW Korba West STPP. The order contract is worth Rs 11,800 crore. 

BHEL would be supplying supercritical equipment such as boiler, turbine, generator and associated auxiliaries along with electrical, C&I and balance of plant packages. It also includes erection & commissioning works and other civil works. the commercial operation would be completed within 60 months, BHEL said.

Following the development, the stock climbed 3.03 per cent to hit a high of Rs 220.95. The stock is flat year-to-date but is down 9 per cent for the six-month period.

BHEL shares look inexpensive, Antique Stock Broking said in a recent note, as it retained its 'Buy' call and gave a target price of Rs 300 on the company. The brokerage forecast BHEL to report an average annual order intake of Rs 70,000 crore over FY24–27. This would be more than twice the average Rs 27,400 crore orders booked during FY12–23, the broking firm said. 

Choice Broking in a technical note on March 18 said the stock offered a favorable buying opportunity for traders for a one-month period. It suggested a stop-loss at Rs 188 to manage downside risk and suggested an upside target of Rs 229.70, which aligned with the broader uptrend and reversal signals. "This setup provides a strong  risk-reward ratio for positional traders looking to capitalise on the bullish breakout," it suggested. 
 
"Despite strong execution, we project the order book to rise to an all-time high of Rs 2.2 lakh crore in FY27. Earnings could grow exponentially over the next three years, given strong operating leverage. We maintain BUY on the stock with a target price of Rs 300, based on a PE of 26 times FY27," Antique Stock Broking said.

BHEL has recently announced winning a large order worth Rs 7,500 crore (excluding taxes) from GSECL to set up 1x800 MW - Unit 7 Ukai thermal power plant. Antique Stock Broking said TPP order finalisation witnessed a sharp uptick in FY25 with Rs 70,000 crore-plus worth of orders getting finalised in favor of BHEL in the power sector.

"Business outlook looks promising as 4 GW of ordering is expected to materialize & business performance is expected to further improve in FY26 as the recently bagged better-margin orders enter execution. We expect a cumulative order inflow of Rs 3 lakh crore over FY24–27E, which coupled with the accelerated execution of the existing order book of Rs 1.7 lakh crore, should significantly improve BHEL’s operational performance leading to a likely 149 per cent earnings CAGR over FY24–27E," Antique said.