BHEL at four month high, surges 30% in three weeks

Bharat Heavy Electrical Limited (BHEL) is trading higher by almost 5% to Rs 261, also its four month high, on back of heavy volumes. The stock opened at Rs 251 and has seen a combined 3.63 million shares changing hands on the counter till early noon deals on both the exchanges.

The stock of state-owned heavy electrical equipment maker outperformed the market by appreciating 30% in past three weeks after the government announced multiple reforms to kick-start economic growth. The Bombay Stock Exchange capital goods index has gained around 16%, while the benchmark Sensex rose 6% during the same period.

 

Meanwhile, the company has clarified on the ongoing controversy over coal allocation and said that it has a healthy order book position of around Rs 130,000 crore and is well placed to achieve robust growth in fiscal 2012-13 and beyond.

Analyst at Nirmal Bang says that BHEL is likely to sail through safely without being majorly impacted by the coal mine controversy and subsequent review by the Inter Ministerial group (IMG) for coal block de-allocation.

However, the key challenge for BHEL continues to be winning new incremental orders to arrest the likely decline in revenue growth along with pressure on margins, says report.