BHEL shares at ₹230! This analyst terms it to be a potential turnaround story

State-run Bharat Heavy Electricals Ltd (BHEL) has been a shining stock on Dalal Street despite its mixed performance in the last few quarters. The PSU has delivered stellar returns to the investors and analysts at Antique Stock Broking expect more legs to the rally.

BHEL shares opened nearly 3% higher in Tuesday's trade after the brokerage firm maintained its positive stance on the counter, with a 'Buy' rating and a target price of ₹230 per share. This suggests a further upside of 16% from its current market levels.

Antique believes the PSU is a potential turnaround story that is unfolding. It said BHEL is well-positioned to win a large 3x800 MW Talabira project planned by NLC India. The brokerage expects the company's order intake to exceed ₹60,000 crore in FY24 if the NLC order is closed before March.

BHEL has recently clarified on media reports that it still has not bagged the order worth ₹19,400 crore from NLC India Ltd. The company had submitted a price bid for the mentioned NLC order, which is an "activity in the normal course of business," it said in a regulatory filing.

"Submission of bid does not result into automatic bagging of an order," the company stated.

Antique in its report mentioned that BHEL's order intake may surge to ₹1.8 lakh crore during FY24-26, and three times the orders in three years preceding FY24.

According to the brokerage, BHEL's Vande Bharat trainset order will propel its presence in the railway segment. It added that the company's non-power segment is providing sustainable growth catalysts.

Antique also said that defence will be an emerging growth driver for the state-run power generation equipment manufacturer.

BHEL is owned by the government, who has a majority stake in the company. As of June quarter (FY23-24), the government owned 63.17% stake in BHEL.

LIC is BHEL's largest public shareholder with 10.07% stake at the end of June, while among domestic institutions, Nippon Life India Trustee A/C/ Nippon India Small Cap Fund owns a 2.17% stake in the state-run company.

BHEL also has a foreign fund — Fidelity, owning a stake. Fidelity Advisor Focused Emerging Markets Fund owns a 1.09% stake, while Fidelity Emerging Markets Fund owns a 1.08% stake.

Shares of BHEL have jumped nearly 10 times from its Covid-19 lows of ₹20.8 on March 31, 2020. However, they still trade substantially lower than their all-time high of ₹390.67, which was scaled back in 2007.

Four out of the 19 analysts tracking BHEL have a buy rating on the counter. This is the highest number of 'Buy' recommendations that the stock has had in the last three years. 14 of them still have a sell rating.

At 10:17 am, the scrip is trading 2.07% higher at ₹202.25 apiece on the NSE. Shares of BHEL have gained about 152% in the last one year, while the stock has surged about 130% in the past six months.