BHEL Stock Surges 3% After Winning ₹11,800 Crore Power Plant Contract from Chhattisgarh Government
Introduction
Shares of Bharat Heavy Electricals Limited (BHEL), a leading Maharatna PSU, jumped over 3% in Friday’s trading session after securing a massive ₹11,800 crore EPC and civil contract from the Chhattisgarh State Power Generation Company Limited (CSPGCL). This major win has boosted investor confidence, reinforcing BHEL’s dominance in India’s power sector.
With this contract, Bharat Heavy Electricals Limited will construct a 2×660 MW supercritical thermal power plant at Hasdeo Thermal Power Station, located in Korba West, Chhattisgarh. This project is a significant milestone in the company’s order book and further strengthens its position in India’s energy infrastructure sector.
Stock Price Movement
Bharat Heavy Electricals Limited’s share price soared to an intraday high of ₹221.30, marking a 3.5% increase from its previous close of ₹213.98. However, the stock settled at ₹215.15 per share by the end of the trading session.
The stock has been a multi-bagger performer, delivering over 1,000% returns in the last five years. This impressive rally reflects strong investor confidence and the company’s ability to secure high-value government contracts.
Contract Details
The contract was awarded to BHEL after a competitive bidding process and includes an Engineering, Procurement, and Construction (EPC) package for setting up a 2×660 MW Supercritical Thermal Power Plant at Hasdeo Thermal Power Station.
Scope of the Project
The contract covers:
✅ Supply of supercritical equipment, including boilers, turbines, generators, and related auxiliaries.
✅ Electrical, control, and instrumentation systems, along with balance-of-plant packages.
✅ Erection, commissioning, and civil works, ensuring the plant is operational within 60 months.
This contract, valued at ₹11,800 crores (excluding taxes and duties), marks one of the largest domestic deals secured by BHEL in recent years.
Bharat Heavy Electricals Limited’s Strong Order Book
As of September 30, 2024, BHEL’s total outstanding order book stands at ₹1,60,000 crores, with key contributions from:
- Power Sector: ₹1,25,984 crores (79% of total orders)
- Industry Sector: ₹30,682 crores (19%)
- Export Orders: ₹3,763 crores (2%)
This robust order pipeline highlights Bharat Heavy Electricals Limited’s leadership in the energy sector, ensuring stable revenue flow in the coming years.
International Presence and Manufacturing Strength
Bharat Heavy Electricals Limited operates in 90 countries across six continents, with exports contributing 3% of total revenue in FY24, down from 19% in FY20.
Manufacturing Capabilities
🔹 16 manufacturing units & 2 repair units
🔹 4 regional offices & 8 service centers
🔹 15 regional marketing centers
🔹 Supplies 53% of India’s total installed conventional power capacity
This vast operational network underscores BHEL’s ability to execute large-scale projects efficiently.
Financial Performance (Q3 FY25 vs. Q3 FY24)
| Metric | Q3 FY25 | Q3 FY24 | Growth (%) |
|---|---|---|---|
| Revenue | ₹7,277 Cr | ₹5,504 Cr | +32% |
| Net Profit | ₹135 Cr | ₹60 Cr | +125% |
BHEL’s net profit more than doubled, reflecting improved efficiency and strong order execution.
Key Financial Ratios
| Ratio | Value | Industry Average |
|---|---|---|
| Return on Capital Employed (ROCE) | 3.18% | – |
| Return on Equity (ROE) | 1.84% | – |
| Price-to-Earnings (P/E) Ratio | 143.93 | 66.41 |
| Current Ratio | 2.08 | – |
| Debt-to-Equity Ratio | 0.38 | – |
| Earnings Per Share (EPS) | ₹1.49 | – |
A high P/E ratio of 143.93, compared to the industry average of 66.41, suggests strong investor expectations for future growth.
Market Outlook & Conclusion
BHEL’s latest contract win reinforces its dominance in India’s power infrastructure sector. With a massive order book, strong revenue growth, and robust manufacturing capabilities, the company is well-positioned for future expansion.
Why Investors Should Watch BHEL?
✔ Strong Order Book – ₹1.6 lakh crore in outstanding projects.
✔ Government-backed Contracts – Ensures revenue visibility.
✔ Growing Profitability – 125% net profit growth YoY.
✔ India’s Power Sector Growth – Boosts demand for BHEL’s expertise.
With a solid financial foundation and growing project pipeline, BHEL remains a key player in India’s energy sector, making it an attractive stock for long-term investors.
Frequently Asked Questions (FAQs)
Q1: Why did BHEL’s stock price jump by 3%?
A: BHEL’s stock surged after the company secured a ₹11,800 crore EPC contract from the Chhattisgarh Government for constructing a 2×660 MW supercritical thermal power plant.
Q2: What is the total value of BHEL’s order book?
A: As of September 30, 2024, BHEL’s outstanding order book stands at ₹1,60,000 crores, primarily dominated by the power sector.
Q3: What are the key details of BHEL’s new contract?
A: The ₹11,800 crore contract includes supply, erection, and commissioning of supercritical equipment, electrical systems, and civil works for a 2×660 MW thermal power plant at Hasdeo Thermal Power Station.
Q4: How has BHEL’s financial performance been in Q3 FY25?
A: BHEL reported 32% revenue growth and a 125% rise in net profit, reflecting improved order execution and efficiency.
Q5: Is BHEL a good investment after this contract win?
A: BHEL has a strong order book, growing profitability, and government-backed projects, making it a promising stock for long-term investors in the power sector.
For more market insights, follow our news.
Stay tuned for more updates and insights on the stock market! For more insights on investing in the Indian stock market, check out resource like MoneyControl, ET, NSE India.
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.