BHEL rallies 12% to hit 52-week high post extension of GT deal with GE Tech

Shares of Bharat Heavy Electricals Limited (BHEL) rallied 12.5 per cent to hit 52-week high of Rs 92.7 per share in Wednesday's intra-day trade after the company extended its gas turbine (GT) technology agreement with General Electric (GE) Technology GmbH Switzerland. In comparison, the S&P BSE Sensex quoted 65,389 levels, down 89-odd points, as of 2:20 pm.
 

So far this calendar year 2023 (CY23), shares of BHEL soared over 17 per cent, as against 7 per cent rise in the S&P BSE Sensex. Moreover, the stock has rallied over 100 per cent in the past one year.
 

Till date, the company said that they have supplied about 230 GE design gas turbines to various oil refineries, process industries, and utilities in India and customers worldwide.
 

"As per the agreement, BHEL shall also be able to supply GTs with fuel blends via hydrogen, methanol, syngas, and in hybrid configuration contributing further towards accelerating the energy transition in India," the management added.
 

Earlier, BHEL, in consortium with Titagarh Wagons, had won Vande Bharat order worth Rs 23,500 crore to supply 80 train-sets. That apart, the company also developed significant moat in defence orders, and sole supplier of SRGM naval guns.
 

Analysts at ICICI Securities believe that the domestic thrust towards manufacturing and the company’s efforts towards balance sheet improvement can help BHEL's business stage a strong turnaround.
 

"We maintain our earnings estimates for FY24E and FY25E, owing to improved order inflow outlook over the next two years, and expect a rerating in the stock, the brokerage firm added in a recent note, upgrading target price to Rs 110 apiece (vs Rs 100 earlier). 
 

That said, analysts cite delay in order inflows, and no improvement in execution of slow-moving orders as key risks.