BHEL surges 10% on heavy volumes; stock hits over 8-year high

Shares of Bharat Heavy Electricals Limited (BHEL) hit an over eight-year high of Rs 259.40 as they surged 10 per cent on the BSE in Monday's intraday trade amid heavy volumes. The stock of the integrated power plant equipment manufacturer surpassed its previous high of Rs 243.30 touched on February 5, 2024. It is trading at its highest level since August 2015.

Till 10:07 AM, a combined 68.91 million equity shares have changed hands and there were pending buy orders for 1.86 million shares on the NSE and BSE. In comparison, the S&P BSE Sensex was up 0.1 per cent at 73,877.

The stock is trading higher for a fifth straight day, ralling 16 per cent during the period, after BHEL signed a joint venture agreement (JVA) with Coal India (CIL) to undertake Coal to Chemicals business by setting up a Coal to 2,000 TPD Ammonium Nitrate Plant using the company's in-house developed PFBG (Pressurised Fluidized Bed Gasification) technology.

"CIL shall ensure Ammonium Nitrate offtake of at least 75 per cent of rated annual production capacity of the Project subject to acceptance of quality and prices on mutually acceptable terms," the company said.

The equity shareholding shall be 51 per cent with CIL and 49 per cent with BHEL. The Joint Venture Company shall be incorporated as a 'Private Limited' company with an initial paid-up share capital of Rs 1 lakh only.

BHEL has operations in the power and industry segments. The power group supplies power plant equipment such as turbo generators, boilers, turbines and accessories, and erects all types of plants based on gas, coal, hydro, nuclear and solar power. The industry group caters to diverse sectors such as process industries, transportation, power transmission and distribution, and defence. BHEL designs, engineers, manufactures, constructs, tests, commissions and services a wide range of products.

Since November, the stock price of BHEL has zoomed 115 per cent on improved financial performance and strong order book position. As on December 31, 2023 (Q3FY24), BHEL had an outstanding order book worth Rs 1.09 trillion, providing revenue visibility over the medium term.

"The robust order booking of Rs 36,048 crore (up to Q3FY24) is due to expansion in core sectors of the economy, along with demand for defense products. The company has its maiden entry in the market of Industry 4.0 solutions with an order from refinery," BHEL said in Q3FY24 results.

From the power sector, BHEL had received orders for supply of 310 MVA Generator Transformer (GT) for Thermal Power Station and 28.5 MVA Generator Transformer (GT) for Hydro Electric Plant. The company also bagged various orders for spares, services, and maintenance from a range of customers.

Among industry sectors, BHEL had received orders for supply of nine upgraded Super Rapid Gun Mounts (SRGM) for defense and supply & AMC of 30 sets of Propulsion Equipment for Railways.

Some of the large orders received this fiscal were the Vandhe Bharat project (80 train sets), thermal orders from NTPC and Adani, and hydro project orders from NHPC. The company is also focusing on non-coal business orders such as railways, defence, nuclear, emission control, transmission and rural electrification segments. Order inflow and profitability remain key monitorables, CRISIL Ratings said.