Maharatna stock in focus after receiving ₹6,200 Cr LoI from Damodar Valley Corp

The share of the largest government-owned engineering and manufacturing companies gained up to 1 percent after the company received a Letter of  Intent from Damodar Valley Corporation for Rs 6,200 crore.

Price Movement

With a market capitalization of Rs 69,188.60 crore, the shares of Bharat Heavy Electricals Limited were trading at Rs 198.70 per share, decreasing around 0.38 percent as compared to the previous closing price of Rs 199.45 apiece.

Reason for Rise

Bharat Heavy Electricals Limited has received a Letter of Intent from Damodar Valley Corporation, Kolkata for Steam Generator Island Pkg. of 2×660 MW Raghunathpur Thermal Power Station Phase-II project. This order is valued at Rs 6,200 crore.

Financial condition 

Looking forward to the company’s financial performance, revenue climbed by 32 percent from Rs 5,504 crore in Q3FY24 to Rs 7,277 crore in Q3FY25 but during the same time, net profit magnified by 125 percent from Rs 60 crore to Rs 135 crore.

Major orders 

Moreover, BHEL’s major orders include EPC contracts for Talabira, Yamuna Nagar, Singrauli, Lara, and BTG packages for Mahan and Raigarh power plants. Other key projects are 80 Vande Bharat trains, 20 naval gun mounts, and international orders for gas turbine parts from the UAE

Notably, BHEL also secured significant agreements with Adani Power and its subsidiary, Mahan Energen Limited, valued at over Rs 11,000 crore. These agreements are for three supercritical thermal power projects in Rajasthan and Madhya Pradesh, further solidifying BHEL’s role in India’s energy infrastructure development.

Order Book

As of October 2024, Bharat Heavy Electricals Limited (BHEL) reported a strong order book of Rs 1,60,000 crore, comprising Power (Rs 1,25,984 crore, 79%), Industry (Rs 30,682 crore, 19%), and Export (Rs 3,763 crore, 2%), reinforcing its market position and long-term growth.

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Key achievement & diversified business 

BHEL include the inauguration of Unit-2 (660 MW) at the Maitree Super Thermal Power Project in Bangladesh, the dedication of the North Karanpura and Telangana thermal power plants to the nation, and the trial operation of Unit 1 of the Polavaram Rangareddy Hydro Project

Additionally, BHEL has diversified its operations by forming a joint venture with Coal India for a coal-to-ammonium nitrate plant. Additionally, the company has established a strategic partnership with HIMA Middle East to enhance its railway signaling business, expanding its reach in key sectors.

Future outlook

BHEL’s future order pipeline includes projected power projects such as Darlipali Stage 2, Sipat Super Thermal Power Plant Stage 3, Koradi Units 11 and 12, and the second expansion of Neyveli Thermal Power Station, totaling around 10 GW. The business anticipates securing around 10-12 GW of new projects each year in the next years.

Management guidance

Management expresses confidence in future growth, fueled by strong order inflows, strategic partnerships, and enhanced operational efficiencies. This optimistic outlook positions the company well to capitalize on upcoming projects and market opportunities, ensuring sustained performance and profitability.

Company Snapshot

Bharat Heavy Electricals Limited is an engineering and manufacturing company. It is an integrated power plant equipment manufacturer. Its segments include Power and Industry. The power segment comprises thermal, gas, hydro, and nuclear power plant businesses.

Written by  Abhishek Singh

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