BHEL up 7%, hits 12-year high on pact with HIMA for railway signaling biz

Shares of Bharat Heavy Electricals (BHEL) hit a 12-year high of Rs 300.20 a piece, as they rallied 7 per cent on the BSE in Thursday’s intra-day trade after the company on Tuesday announced that it has entered into a strategic partnership with HIMA Middle East FZE, Dubai for railway signalling business.

The stock is trading at its highest level since March 2012. It had hit a record high of Rs 390 on November 7, 2007. The market price of BHEL has recovered 45 per cent from March month low of Rs 207.20. At 11:06 am; the stock was trading 3 per cent higher at Rs 290.60, as compared to 0.34 per cent rise in the S&P BSE Sensex. The average trading volumes on the counter jumped 1.5 times, with a combined 40 million shares having changed hands on the NSE and BSE.

HIMA is one of the world's leading solution provider for safety-related automation in the railways and process industries. BHEL has been supplying locomotives, electrics for EMU/MEMU, propulsion systems, traction motors, traction alternators, traction transformers, etc. to Indian railways. The partnership with HIMA will further enhance BHEL’s offerings to Indian railways, the company said.

Meanwhile, one of BHEL's largest orders for supplying and 35 years' maintenance of 80 Vande Bharat trainsets—received in April 2023 in consortium with Titagarh Rail Systems will open the way for future rail business. It is where the company's huge expansion and modernisation plans are being rolled out – including in areas like semi-high speed trainsets, locomotives, and signaling etc.

In line with the ‘National Hydrogen Mission’, BHEL is geared up and exploring various areas in the green hydrogen value chain and is setting up a centre of excellence, at Varanasi. These efforts will pave the way for future scalable businesses in this area, the company said.

BHEL has a healthy order book of around Rs 1.09 trillion, providing revenue visibility over the medium term. Some of the large orders received last fiscal were the Vande Bharat project (80 trainsets), thermal orders from NTPC and Adani, and hydro project orders from NHPC.

The company is also focusing on non-coal business orders such as railways, defence, nuclear, emission control, transmission and rural electrification segments. Order inflow and profitability remain key monitorables, according to analysts.