Stock Market Today: Bharat Heavy Electricals (BHEL) share price gained in the morning trade on Monday after the PSU company received an order from Adani Power. The gains in the stock came despite a fall in the Indian stock market today.
BHEL order from Adani Power
BHEL announced on Friday after market hours that it has received a Letter of Award (LoA) from Adani Power. The order received by BHEL from Adani Power is for six thermal units of 800 MW.
As per details provided by BHEL in a release to the exchanges, the order Letter of Award pertains to the supply of equipment (Steam Turbine Generator along with auxiliaries) and Supervision of Erection & Commissioning for six Thermal Units of 800 MW.
Referring to the time period by which the order or contract is to be executed, BHEL has specified that the same is as per the customer’s project requirements.
Broad consideration of the size of the order or contract by BHEL for Adani Power is around ₹6500 crore, excluding goods and services tax.
Strong order flows for BHEL
BHEL has been receiving strong order flows. The company had seen robust order flow growth of 7% year-on-year in 4Q, despite a high base, which, as per analysts, has been led by ₹41,900 crore power equipment orders.
To be sure, the execution of orders also remains the key. Kotak Securities analysts had said that BHEL’s ability to grow execution is key to growing overall revenues, as the power segment accounts for 80% of the order backlog.
Analysts at Antique Stock Broking believe that BHEL will continue to witness elevated ordering of ₹80,000 crore over the next 3–4 years, led by both industry (non-power) and power segments. Supported by strong ordering, improving execution, and benefits of operating leverage, BHEL’s earnings are anticipated to climb, as per the brokerage.
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