What is leading BHEL's surge to a 52-week high?

The agreement is being looked upon as a big step towards achieving the national target of gasification of 100 million tonnes of coal.

Brokerage firm DAM Capital had upgraded its rating on BHEL to ‘buy' after 54 quarters on the back of a strong turnaround in earnings and profitability and has signaled a 66 percent upside from last Thursday’s closing price.

The brokerage believes that ordering for thermal power plants will increase from NIL to 5 gigawatts per annum over the next two years. It called BHEL a natural and legitimate beneficiary of the same.

"75 percent of Indian coal has high ash content and technologies developed abroad are not capable of handling such coal. BHEL's PFBG technology is most suited for this type of coal. The company has already successfully set up India's first high-ash Indian coal to Methanol (0.25 TPD) pilot plant," the company had said earlier.

BHEL, which has a 60 percent market share in the thermal market, had bagged an order from NTPC to set up a 2x660 megawatt thermal power project.

BHEL's net loss narrowed in the June quarter to less than Rs 200 crore from the nearly Rs 450 crore that it reported during the same period last year.

Brokerage firm Nomura had also raised its price target on BHEL to Rs 65 in September and it now trades above those levels. It expects the company to benefit from increased Capex but expressed doubts over its execution capabilities.