BHEL Shares Surge Over 3% After ₹8,000 Cr LoI from Maharashtra Govt
BHEL Shares: Shares jumped up to 3.4% in early trade after the company secured a ₹8,000 crore Letter of Award (LoI) from the Maharashtra State Power Generation Company Limited (MAHAGENCO). This significant order win has fueled investor confidence, further strengthening BHEL’s position as a leading player in the power and infrastructure sector.
Stock Price Movement
One of India’s largest engineering and manufacturing companies, witnessed an uptrend in its stock price following this announcement.
- The stock was trading at ₹204.65, marking a 0.44% increase from its previous closing price of ₹202.85.
- The company’s market capitalization stands at ₹71,260.43 crore.
- Over the last year, the stock has fluctuated between a high of ₹335 and a low of ₹184.
The positive momentum reflects investor optimism surrounding BHEL’s robust order pipeline and revenue potential from this latest contract.
Key Reason Behind the Rally
According to its latest exchange filing, the company secured a major contract from MAHAGENCO for a 2×660 MW Boiler, Turbine, Generator (BTG) package.
- The contract includes supply of equipment, erection, commissioning, and civil works at the Koradi Thermal Power Station.
- This mega project underscores BHEL’s technical expertise and strengthens its footprint in the power generation sector.
With India ramping up investments in power infrastructure, this order positions BHEL strategically to capitalize on growing demand.
Strong Financial Performance
BHEL has reported remarkable growth in its financials, demonstrating improved operational efficiency and a strong recovery.
| Financial Metric | Q3 FY24 | Q3 FY25 | Growth % |
|---|---|---|---|
| Revenue | ₹5,504 Cr | ₹7,277 Cr | +32% |
| Net Profit | ₹60 Cr | ₹135 Cr | +125% |
This 125% surge in net profit reflects BHEL’s ability to efficiently execute projects and manage costs, making it an attractive investment option.
Robust Order Book & Major Projects
BHEL continues to maintain a strong order book, reflecting its healthy project pipeline.
- As of October 2024, BHEL reported an order book of ₹1,60,000 crore:
- Power Segment: ₹1,25,984 Cr (79%)
- Industry Segment: ₹30,682 Cr (19%)
- Exports: ₹3,763 Cr (2%)
Some of its notable orders include:
- EPC contracts for power plants at Talabira, Yamuna Nagar, Singrauli, and Lara.
- BTG packages for Mahan and Raigarh power plants.
- 80 Vande Bharat trains and 20 naval gun mounts.
- International contracts for gas turbine parts from the UAE.
Additionally, BHEL has secured over ₹11,000 crore in contracts from Adani Power and Mahan Energen Limited for thermal power projects in Rajasthan and Madhya Pradesh.
Key Achievements & Diversified Business Model
BHEL’s diversification strategy and technological advancements have helped it expand into new business areas.
Recent Milestones:
- Commissioning of Unit-2 (660 MW) at the Maitree Super Thermal Power Project in Bangladesh.
- Dedication of North Karanpura and Telangana Thermal Power Plants to the nation.
- Trial operation of Polavaram Rangareddy Hydro Project’s Unit-1.
Diversification Initiatives:
- Joint venture with Coal India for a coal-to-ammonium nitrate plant.
- Strategic partnership with HIMA Middle East to expand in railway signaling solutions.
These initiatives reinforce BHEL’s commitment to innovation and long-term growth beyond the conventional power sector.
Future Outlook: Promising Growth Ahead
BHEL’s management is optimistic about the company’s growth trajectory, backed by a strong pipeline of upcoming projects.
- The company expects to bag 10-12 GW worth of new power projects annually.
- Upcoming power projects include:
- Darlipali Stage 2
- Sipat Super Thermal Power Plant Stage 3
- Koradi Units 11 & 12
- Neyveli Thermal Power Station Expansion
With increasing government focus on infrastructure and power expansion, BHEL is well-positioned to secure large-scale contracts.
Management Commentary
BHEL’s management remains confident about sustained growth, emphasizing strategic partnerships, operational efficiencies, and project execution capabilities.
- Strong order inflows and expansion into emerging sectors will drive long-term profitability.
- The company’s cost optimization strategy and technological advancements are expected to enhance its margins.
Company Snapshot & Key Financial Ratios
Here’s a quick snapshot of BHEL’s financial standing:
| Metric | Value |
|---|---|
| Market Cap | ₹70,675 Cr |
| Current Price | ₹203 |
| High / Low | ₹335 / ₹184 |
| Stock P/E | 136 |
| Book Value | ₹69.5 |
| Dividend Yield | 0.12% |
| ROCE | 3.37% |
| ROE | 1.13% |
| Debt to Equity | 0.38 |
| Industry PE | 53.2 |
| Debt | ₹9,128 Cr |
| PEG Ratio | -6.04 |
| Intrinsic Value | ₹28.8 |
| Graham Number | ₹48.3 |
| Piotroski Score | 3.00 |
Final Thoughts
With a ₹8,000 crore order win, strong financial growth, and an impressive order book, BHEL is set for a promising future.
- The company’s strategic initiatives, project execution efficiency, and expansion into new sectors make it a strong contender in the power and infrastructure industry.
- Investors should closely watch upcoming order announcements and financial performance, as BHEL continues to strengthen its market presence.
As India’s power sector sees rapid expansion, BHEL remains a key player, driving nation-building efforts and creating long-term value for shareholders
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.