BHEL Secures ₹15,530 Crore Order from NTPC Share Price Hits 52-Week High

Bharat Heavy Electricals Limited (BHEL), the renowned state-run engineering and manufacturing company, witnessed a remarkable surge of over 2% in its share price, reaching a 52-week high during early trade on Thursday. The upswing followed the announcement of a substantial order worth ₹15,530 crore awarded by the state-owned power producer NTPC for a thermal power plant project. This successful bid has propelled BHEL's shares to rise by an impressive 2.35% to ₹121.45 apiece on the Bombay Stock Exchange (BSE).

Order Details and Scope

The recent order entails BHEL's responsibility for the establishment of the 2x800 MW Supercritical Thermal Power Project Stage-II at Lara in Chhattisgarh. The scope of the project encompasses an extensive range of tasks, including design, engineering, manufacturing, supply, construction, erection, testing, and commissioning. These tasks also encompass civil and structural works for the engineering, procurement, and construction (EPC) package. The package notably features a steam generator with the capability of biomass co-firing, a steam turbine, generator, and auxiliaries. Moreover, the project involves the incorporation of emission control systems, control, and instrumentation setups, as well as various balance of plant packages.

According to BHEL's regulatory filing, the timeline for the project's execution has been specified. Unit-1 is slated for completion within 48 months, while Unit-2 is expected to be finalized within 52 months. This strategic move aligns with BHEL's commitment to continued excellence in its offerings.
Impressive Market Performance

The NTPC order triumph follows closely after BHEL secured a ₹2,242-crore contract from NHPC, highlighting the company's consistent traction in the market. Although the brokerage has assigned a 'Reduce' rating on BHEL with a target price of ₹67 per share, BHEL's share price has already demonstrated substantial growth this year, surging by more than 50%. Impressively, the stock has exhibited a remarkable upward trajectory, delivering returns exceeding 102% over the past year and a remarkable 208% over the past three years.

As a testament to BHEL's prowess in securing back-to-back orders, the company's shares have gained more than 10% within a week. On August 30, BHEL officially confirmed the order from NTPC for the 2x800 MW Supercritical Thermal Power Project Stage-II in Chhattisgarh. The company shared further insights, emphasizing the inclusive nature of the order, spanning design, engineering, manufacture, supply, construction, erection, testing, commissioning, and the integration of civil and structural elements.

The meticulous execution timeline is noteworthy; the first unit is expected to be completed within 48 months, with the second unit following closely within 52 months from the project's commencement date.

NTPC also confirmed the investment approval for the establishment of the Lara Super Thermal Power Project, Stage-II, with a capacity of 2x800 MW, at an estimated cost of ₹15,529.99 crore. This collaborative effort underscores the strategic direction of both companies towards bolstering India's energy infrastructure.

Consistent Order Wins

The order from NTPC is just the latest addition to BHEL's impressive portfolio. It comes on the heels of a ₹2,242-crore contract from NHPC and a ₹4,000-crore order from a subsidiary of Adani Power. This surge in orders underscores the confidence that industry leaders place in BHEL's capabilities.

Despite reporting a widened consolidated loss of ₹343.89 crore in the June quarter, compared to ₹187.99 crore in the same quarter the previous year, BHEL remains a strong player in the market. The company's revenue rose to ₹4,818.37 crore for the June quarter, marking steady progress.
Notably, BHEL's order book currently stands at an impressive ₹1.01 lakh crore, with the power sector contributing the largest segment at 68.2%. The industry sector follows closely, accounting for 27.4%, while exports make up 4.4% of the order book.

In conclusion, BHEL's recent achievement in securing the monumental NTPC order reflects its steadfast commitment to excellence and innovation in the energy sector. This success story is further solidified by its impressive share price surge and remarkable returns, positioning the company as a prominent player in India's engineering landscape.