Bharat Heavy Electricals rose 3.93% to Rs 141.50 at 15:15 IST on BSE after report suggested that Supreme Court allowed appeals against Madras High Court's stay over construction of company's thermal power project.
Meanwhile, the BSE Sensex was down 86.53 points, or 0.31%, to 27,964.35.
On BSE, so far 15.49 lakh shares were traded in the counter, compared with average daily volume of 10.63 lakh shares in the past one quarter. The stock hit a high of Rs 143.45 and a low of Rs 139 so far during the day. The stock hit a 52-week high of Rs 219.70 on 27 October 2015. The stock hit a 52-week low of Rs 90.40 on 29 February 2016. The stock had underperformed the market over the past one month till 18 October 2016, falling 7.19% compared with 1.92% fall in the Sensex. The scrip had also underperformed the market in past one quarter, falling 2.58% as against Sensex's 1.1% rise.
The large-cap company has equity capital of Rs 489.52 crore. Face value per share is Rs 2.
As per reports, the Supreme Court allowed a batch of civil appeals against Madras High Court's stay over construction of Bharat Heavy Electricals (Bhel)'s 1320 megawatts Ennore SEZ supercritical thermal power project. Bhel had won a contract in October 2014 worth Rs 7800 crore from Tamil Nadu Generation and Distribution Corporation (TANGEDCO) for setting up 2X660 megawatt (MW) thermal power plant on engineering, procurement and construction (EPC) basis at Ennore SEZ. However, the contract was challenged by a rival consortium.
The Supreme Court was also critical of the Madras High Court for not exercising restraint and held that the latter's order followed the path of error in continuum. Though Bhel was awarded the contract for the construction of these plants, a division bench of the Madras High Court had allowed pleas of the other bidder, Central Southern China Electric Power Design Institute (CSEPDI)-Trishe Consortium and directed TANGEDCO to evaluate the price bid taking into consideration representations submitted by the consortium, thereby prompting TANGEDCO and Bhel to challenge the order.
In its judgment, a division bench of the Supreme Court comprising Justices Dipak Misra and Shiva Kirti Singh observed that in a complex fiscal evaluation the court has to apply the doctrine of restraint. Several aspects, clauses, contingencies, etc. have to be factored. These calculations are best left to experts and those who have knowledge and skills in the field. The bench was referring to a consultant report which defended the award of the contract to Bhel by TANGEDCO. The bench was also critical of the Madras High Court entertaining a plea to consider representations before the finalisation of a contract.
The construction of 2X660 MW Ennore SEZ Supercritical Thermal Power Project was delayed since there were several rounds of litigation in the Madras High Court over the tender process of TANGEDCO with CSEPDI - Trishe Consortium, alleging arbitrariness, anomalies and inconsistencies in the process.
Bhel had announced during market hours yesterday, 18 October 2016 that Prime Minister of India dedicated three Bhel-commissioned hydro power projects to the nation.
Bhel's net profit jumped 54.2% to Rs 77.77 crore on 29% growth in net sales to Rs 5522.76 crore in Q1 June 2016 over Q1 June 2015.
State-run Bhel is an integrated power plant equipment manufacturer. It is one of the largest engineering and manufacturing companies in India engaged in the design, engineering, manufacture, construction, testing, commissioning and servicing of a wide range of products and services for core sectors of the economy, viz. power, transmission, industry, railways, renewable energy, oil & gas, water and defence. The Government of India currently holds 63.06% stake in Bhel (as per the shareholding pattern as on 30 June 2016).
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