BHEL shares recover from day's low post NTPC order; key details

Shares of Bharat Heavy Electricals Ltd (BHEL) recovered some of the lost ground in Tuesday's trade, as the PSU emerged as a successful bidder in a major contract from NTPC Ltd for the establishment of the Main plant package of 3x800 MW Telangana Stage-II supercritical thermal power plant.

The stock, which opened lower and hit a low of Rs 233.50, recovered and was later trading at Rs 237.85, still down 0.56 per cent. In a filing to BSE, BHEL said its scope of work would include design, engineering, manufacturing, supply, erection, commissioning, and civil construction.

For now, BHEL has received a Limited Notice to Proceed (LNTP) from NTPC for initiating the basic engineering work of Main plant package for this upcoming supercritical thermal power plant. This project further strengthens BHEL’s enduring partnership with NTPC, where BHEL has contributed over 57 per cent of NTPC’s thermal power installations nationwide, the PSU said in a BSE filing.

"As India’s foremost power equipment manufacturer, with over 1,68,000 MW of utility power capacity installed across the country, BHEL continues to play a pivotal role in bolstering India’s energy security and supporting the vision of self-reliance in the power sector," it said.

BHEL's recent Q2 numbers were a beat as on revenue due to execution of thermal order book.

"Retain ‘BUY’ given BHEL’s dominant play in India’s thermal capex revival with another 25–35GW ordering likely over FY25E–27E, including 7–8GW of ongoing tenders from NTPC, implying BHEL may close FY25 with another 4–5GW at least. We assume delayed execution, and are cutting FY25E/26E/27E EPS by 9 per cent/9 per cent/1 per cent; target price is unchanged at Rs 425," it said.

PL Capital said recently upgraded the BHEL rating to ‘Accumulate’ from 'Reduce', given the recent sharp correction in stock price and suggested a revised target price of Rs 260 from Rs264 earlier.

"BHEL reported strong revenue growth of 28.5% YoY with Ebitda margin turning positive to 4.2% in Q2FY25. During the quarter, the company continued to benefit from the robust opportunity in thermal power in India, booking orders worth up to Rs 30,000 crore across 7.2GW of projects. With the government aiming to tender out all 80GW of the planned capacity addition by FY28, the pipeline remains healthy with 30GW still up for bidding," JM Financial said in an October note.