According to India Brand Equity Foundation, India’s defence sector is a pivotal component of its economy, boasting a budget of $74.7 billion for 2024, making it the fourth largest globally. The sector aims to achieve $2.41 billion in exports for FY24, reflecting a significant growth trajectory with a 32.5% increase in exports from the previous year.
With a market capitalization of Rs 93,127.78 crore, the shares of Bharat Heavy Electricals Ltd closed at Rs 267.45 per share, decreased around 0.54 percent as compared to the previous closing price of Rs 268.90 apiece.
Order Book:-
As of June 2024, Bharat Heavy Electricals Limited (BHEL) reported a robust order book of ₹1,35,000 crore. This demonstrates BHEL’s strong standing in the heavy electrical equipment sector, with ongoing projects reinforcing its market position and contributing to long-term growth and stability.
Major orders:-
Moreover, BHEL’s major orders include EPC contracts for Talabira, Yamuna Nagar, Singrauli, Lara, and BTG packages for Mahan and Raigarh power plants. Other key projects are 80 Vande Bharat trains, 20 naval gun mounts, and international orders for gas turbine parts from the UAE
Notably, BHEL also secured significant agreements with Adani Power and its subsidiary, Mahan Energen Limited, valued at over ₹11,000 crore. These agreements are for three supercritical thermal power projects in Rajasthan and Madhya Pradesh, further solidifying BHEL’s role in India’s energy infrastructure development.
Financial condition:-
Looking forward to the company’s financial performance, revenue climbed by 10 percent from Rs 5,003 crore in Q4FY23 to Rs 5,485 crore in Q4FY24 but during the same time, net loss magnified by 3 percent from Rs 205 crore to Rs 211 crore.
Industry Outlook:-
India’s economy is steadily expanding, benefiting the electrical and infrastructure industries. In response, BHEL is aligning its operations to support this national expansion, concentrating on important projects that strengthen its position in India’s energy and infrastructure development.
Key achievement & diversified business:-
BHEL include the inauguration of Unit-2 (660 MW) at the Maitree Super Thermal Power Project in Bangladesh, the dedication of the North Karanpura and Telangana thermal power plants to the nation, and the trial operation of Unit 1 of the Polavaram Rangareddy Hydro Project
BHEL has diversified its operations by forming a joint venture with Coal India for a coal-to-ammonium nitrate plant. Additionally, the company has established a strategic partnership with HIMA Middle East to enhance its railway signaling business, expanding its reach in key sectors.
Future outlook:-
BHEL’s future order pipeline includes projected power projects such as Darlipali Stage 2, Sipat Super Thermal Power Plant Stage 3, Koradi Units 11 and 12, and the second expansion of Neyveli Thermal Power Station, totaling around 10 GW. The business anticipates securing around 10-12 GW of new projects each year in the next years.
In addition to electricity projects, BHEL is eyeing major potential in Flue Gas Desulfurization (FGD), with over 130 GW of FGD projects being offered. The business targets for 30% market share in this area and is focusing on a forthcoming 97 GW potential of ₹60,000 crores.
Management guidance:-
Management expresses confidence in future growth, fueled by strong order inflows, strategic partnerships, and enhanced operational efficiencies. This optimistic outlook positions the company well to capitalize on upcoming projects and market opportunities, ensuring sustained performance and profitability.
Company snapshot:-
Bharat Heavy Electricals Limited is an engineering and manufacturing company. It is an integrated power plant equipment manufacturer. Its segments include Power and Industry. Power segment comprises of thermal, gas, hydro, and nuclear power plant businesses.
Written by:- Abhishek Singh
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