Shares of Bharat Heavy Electricals (BHEL) rallied over 12 percent to scale a new one-year high level of Rs 137.10 on the NSE in trade Friday after the state-run entity recently bagged NTPC's Lara Stage-II (2 x 800MW) supercritical thermal project, with an estimate value of Rs 10,000–12,000 crore, taking its year-toFY24 order intake to Rs 30,000–34,000 crore as against Rs 23,500 crore in FY23.
The scrip eventually settled 11.75 percent higher at Rs 135.50. BHEL shares have remained undefeated over the past five trading sessions and gained 27.35 percent in this rally.
At today's closing price, the multibagger stock of state-run power firm has rallied 128.50 percent in the past one year. It was seen at around Rs 59 level on September 2 last year.
Domestic brokerage house Nuvama has a 'Buy' rating on BHEL, with a target price of Rs 156, saying that it is a clear beneficiary of the thermal power revival.
"With peak power demand/deficit exceeding 230/8.5GW (as on August 29), the case for accelerated thermal capex – outlined in the NEP – is stronger," said Nuvama in its research report.
"Accordingly, we reckon fresh thermal ordering over the next four–five years at 30GW, of which BHEL could bag 50 percent in our view. This implies 3GW/year of thermal OI for BHEL, in addition to the base OI of Rs 15,000–20,000 crore, potentially driving an EPS CAGR of 83 percent over FY23–26E," it said.
The counter's 14-day relative strength index (RSI) stood at 73.7. A level below 30 is defined as oversold while a value above 70 is considered overbought. It has a one-year beta of 1.2, indicating high volatility on the counter.
The stock was last seen trading higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-, 200-day simple moving averages (SMAs).
The scrip has an analyst target price of Rs 87.33. The consensus estimate represents a downside of 35.86 percent from the last price of 136.15.
BHEL posted a widening of consolidated loss at Rs 343.89 crore for the June quarter compared with Rs 187.99 crore in the same quarter last year. Revenue for the quarter rose to Rs 4,818.37 crore compared with Rs 4,449.49 crore in the corresponding quarter last year. Sales too disappointed.
First Published: Sept 1, 2023 5:43 PM IST
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