Shares of this integrated power plant equipment manufacturer surged nearly 1 percent to Rs.284.6 per share. after reputed brokerage firm ICICI Securities set a target price indicating potential upside growth.
Price Movement
In Thursday’s trading session, Bharat Heavy Electricals Limited’s (BHEL) share price reached an intraday high of Rs.283.4 per share, rising 0.5 percent from its previous close of Rs.282.05 apiece. The price has since retreated to Rs.280.25 per share.
What happened
BHEL secured a “Buy” rating from reputed brokerage ICICI Securities with a target price of Rs.370 per share, suggesting a potential upside of 32 percent from the current price.
The brokerage is optimistic about BHEL, noting a strong order book for the PSU, with developers quickly finalizing and awarding equipment orders.
Brokerage believes thermal equipment orders are reaching new heights, and it is premature to dismiss thermal or coal-based power. NTPC, the largest coal-based player, is preparing to add another 26 GW, while the largest private player has ordered 11 GW of coal-based equipment.
This surge is driving order inflow for BHEL, which has already announced an order inflow of Rs.364 billion and is the lowest bidder in another 3.2 GW (estimated at Rs.200 billion).
Order Book
As of Q1 FY25, BHEL has an outstanding order book of approximately Rs.135,000 crore, up from Rs.1,09,000 crore in FY20, with the power sector accounting for 75 percent, industry for 22 percent, and exports for 3 percent.
Notable orders received in Q1 FY25 include the 2×800 MW Raipur Phase-II power project from Adani Power, the 2×800 MW Mirzapur Phase-I project in Uttar Pradesh from Mirzapur Thermal Energy, the supply of transformers for railway locomotives, and two units of 175 MW air-cooled synchronous generators for the Mmamabula Thermal Power Project in Botswana.
International Presence
BHEL operates in approximately 90 countries across six continents. In FY24, exports contributed around 3 percent to its revenues, down from 19 percent in FY20.
Manufacturing Capabilities
The company operates 16 manufacturing units, two repair units, four regional offices, eight service centers, and 15 regional marketing centers. It represents 53 percent of India’s total installed conventional power capacity.
Management Guidance
For FY25, the management guidance for BHEL includes a revenue growth target of 15 percent, an EBITDA margin between 23 percent and 25 percent, and a minimum order inflow of Rs.25,000 Cr.
Financial Performance
In its latest financial update, BHEL reported net sales of Rs.5,485 crores for Q1 FY25, reflecting a 13.2 percent increase from Rs.5,003 crores in Q1 FY24. Despite the increase in sales, the company remains unprofitable, with net losses rising to Rs.211 crores, compared to Rs.205 crores in the same period last year.
Company Overview
Bharat Heavy Electricals Limited is India’s largest engineering and manufacturing enterprise, focusing on power generation, transmission, and a range of industrial sectors.
Written by – Siddesh S Raskar
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
