Investors book profit in BHEL; stock slides 7% after soaring 26% in a month

Shares of state-owned Bharat Heavy Electricals Ltd (BHEL) plummted 7 per cent in the intra-day trade on Friday as investors booked profit after a steady rise over the past one month. Since April 4, shares of BHEL have zoomed 26.4 per cent as against 3.4 per cent gain in the benchmark S&P BSE Sensex.  A combined 39.46 million shares had changed hands on the NSE and BSE till 11:34 AM.

BHEL has bagged numerous orders over the past few months, keeping analysts bullish on the stock.

For instance, a consortium of BHEL and Titagarh Wagons, last month, received an order for 80 Vande Bharat trains, in one of the biggest awards under this tender, valued at more than Rs 23,000 crore. The order value comprises the supply of train-sets for Rs 9,600 crore and the balance is for maintenance for a period of 35 years. 

The consortium is to manufacture, test, commission and supply 80 energy-efficient trains with design speed and normal operating speed of 176 kilometres per hour (kmph) and 160 kmph, respectively.

Besides, it has also entered into a Memorandum of Understanding (MoU) with Nuclear Power Corporation of India Limited (NPCIL) to jointly pursue opportunities in the area of Nuclear Power Plants based on Pressurised Heavy Water Reactor (PHWR) technology. 

Given a large order backlog as well as the strong inflows in Q4, BHEL should do well. It’s Q4 performance will, however, probably declare lower profit after tax (PAT) in YoY terms, even though Ebitda (earnings before interest, tax, depreciation and amortisation) should be up by double-digits. READ HERE

Meanwhile, Business Standard reported on Thursday that the Ministry of Heavy Industries (MHI) plans to propose a detailed strategy to seek funds for the next-generation technology research by Bharat Heavy Electricals (BHEL).

"We are targeting funds from the NGHM to meet our demand for the next-gen tech like electrolyzers and fuel stack,” the report said, adding, “These funds will help BHEL take the lead in the development of world-class green hydrogen technology". READ MORE

As per technicals charts, the stock has seen profit booking near the upper end of the Bollinger Bands on the daily charts, which was placed at Rs 85.68 levels. This level, thus, remains a key resistance for the stock. On the downside, trendline support stays at Rs 77.88 level, followed by Rs 76, which is its 20-day moving average.