BHEL investors are charged up on robust new order inflows
Bharat Heavy Electricals Ltd. (BHEL) surged nearly 8% to hit a fresh 52-week high of Rs130.55 apeice on the National Stock Exchange on Friday, fuelled by investor optimism following improving trend in state-run company’s new order inflows. On 30 August, the company said it has bagged an order for setting up a 2x800 MW Supercritical Thermal Power Project Stage-II at Lara, Chhattisgarh, through international competitive bidding.
According to analysts at Nuvama Research, the estimated value of the project is Rs10,000 crore to ₹12,000 crore, taking its year-to FY24 order inflows to Rs30,000 to ₹34,000 crore versus ₹23,500 crore in FY23. Also, with the likely increase in demand for thermal power, there is a case for higher thermal capex and this bodes well for BHEL’s future earnings. “Accordingly, we reckon fresh thermal ordering over the next four–five years at ~30GW, of which BHEL could bag 50% in our view.
This implies ~3GW/year of thermal order inflow for BHEL, in addition to the base order inflow of Rs15,000–20000 crore, potentially driving an EPS CAGR of 83% over FY23–26E," added the Nuvama report. EPS is earnings per share. Lately, the company has been on an order bagging spree.
On 25 August, BHEL won a ₹2,242 crore order from NHPC Ltd for 12x240 MW electro-mechanical equipment, and a ₹4,000 crore contract from Adani Power earlier last month. These orders are expected to contribute to a positive revaluation of the company's stock. Remember, the company’s June quarter (Q1FY24) earnings performance was dismal with widening losses.
In Q1, BHEL’s order inflows jumped year-on-year to ₹15,600 crore. This gave a fillip to the order book, which stood at Rs1.01 trillion as on 30 June. However, Q1 order inflows included a large
. Read more on livemint.com
