BHEL shares may test ₹300 on robust order inflow, says Antique Stock Broking

Shares of Bharat Heavy Electricals Ltd (BHEL) will be in focus in trade on Monday as analysts at Antique Stock Broking have raised their target price on the counter, driven by a robust order book. Antique has affirmed a 'Buy' rating on the BHEL stock, with a target price of ₹299 per share. This suggests a further upside of 16% from the current market price.

The heavy electrical equipment maker has reported a robust order inflow in the first nine months of this financial year (9MFY24) of ₹36,000 crore, up 102% year-on-year.

BHEL has already bagged three large orders — 3x800 MW NLC Talabira Thermal Power Plant, 1x800 MW ultra-super-critical expansion unit at DCRTPP (Yamuna Nagar, Haryana), and 2x800 MW NTPC Singrauli Super Thermal Power Project Stage-III] — during the fourth quarter worth ₹30,000 crore, excluding taxes, Antique said in its note.

The brokerage had estimated four GW of thermal ordering in the current fiscal year, while BHEL has already received 6.5 GW of thermal orders to date.

Antique Stock Broking now expects the company to witness a meaningful reversal in its ordering cycle over the next three to four years.

The multibagger PSU stock is up 30% year-to-date and has rallied over 240% over the past 12 months, eclipsing returns by Nifty during this period. The latter's returns were to the tune of 30%.

BHEL shares are currently trading above their 5-day, 20-day, 50-day and 200-day simple moving averages (SMAs).

With this rally, the stock has drifted to the overbought zone with MFI reported by Trendlyne at 78.2. Meanwhile, the relative strength index (RSI) is in a range of 66.9, indicating the stock is neither trading in the oversold or overbought zone. A number above 70 is considered to be overbought while below 30 is oversold.

Notwithstanding its recent rally, the stock has exhibited stability. Its 1-year beta stood at 0.4, indicating very low volatility.