BHEL gains on bagging IOCL order

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BHEL added 0.51% to Rs 48.95 after the company bagged a major order for a sulphur recovery unit from Indian Oil Corporation (IOCL).

With this order, BHEL has made an entry into the downstream oil & gas process package business. The package, valued at over Rs 400 crore, envisages setting up a 525 TPD Sulphur Recovery Unit at IOCL's Paradip Refinery in Odisha.

The company's diversification strategy into non-coal based business areas has begun paying dividends. With the execution of this order, BHEL will establish itself as a lump-sum turn key (LSTK) player for process packages in the downstream oil & gas sector.

The scope of the said project includes project management, residual process design, detailed engineering, procurement, manufacturing, supply, testing, erection, construction, commissioning and performance guarantee test run of the 525 TPD Sulphur Recovery Unit. The project is scheduled for completion in 25 months.

State-run Bhel is engaged in design, engineering, construction, testing, commissioning and servicing of a wide range of products and services to the core sectors of economy. As of 31 December 2020, the Government of India held 63.17% stake in the company.

The PSU company posted a consolidated net loss of Rs 217 crore in Q3 FY21 as against a net profit of Rs 162 crore in Q3 FY20. Net sales declined 23% year on year to Rs 4203 crore in Q3 FY21.

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