News

Published: June 4, 2024
Updated: June 4, 2024

BHEL Shares Rise Amid Volatility; Secures Major Thermal Power Project from Adani Power

On Wednesday, Bharat Heavy Electricals Ltd (BHEL) shares closed 3.70% higher at Rs 255.25 after a volatile trading session. Despite this gain, the stock remains 20.82% below its all-time high of Rs 322.35, reached on May 21, 2024. Over the past year, however, BHEL shares have surged by 202.74%, marking it as a multibagger stock.

Technical Analysis and Market Sentiment

According to Osho Krishan, Senior Research Analyst at Angel One, BHEL's stock has corrected by approximately 21% from its peak, shifting the primary market sentiment. The overbought conditions have eased, suggesting that further consolidation is needed before the stock resumes its upward trend. The stock finds intermediate support in the Rs 220-225 range, with the next support level around Rs 200. On the upside, resistance is expected at Rs 270, followed by a range of Rs 290-300.

Ravi Singh, Senior Vice-President at Religare Broking, indicated that the stock faces resistance at Rs 255. A decisive breach above this level could trigger the next rally phase.

Jigar S Patel, Senior Manager at Anand Rathi Shares and Stock Brokers, also highlighted that support is at Rs 225 and resistance at Rs 255. A decisive close above Rs 255 might lead to an upside move towards Rs 275, with the expected trading range between Rs 225 and Rs 275 for the month.

Moving Averages and RSI

The stock is trading below its 5-day, 10-day, 20-day, 30-day, and 50-day simple moving averages (SMAs), but above the 100-day, 150-day, and 200-day SMAs. Its 14-day relative strength index (RSI) is at 39.41, indicating that it is neither overbought nor oversold.

Financial Metrics

BHEL's stock has a negative price-to-equity (P/E) ratio of 335.86 and a price-to-book (P/B) value of 3.58. The company's earnings per share (EPS) stands at -0.76, with a return on equity (ROE) of -1.06.

Trading Volume

On the BSE, approximately 39.12 lakh shares were traded, surpassing the two-week average volume of 28.64 lakh shares. The turnover amounted to Rs 94.49 crore, with a market capitalization of Rs 88,879.67 crore.

Major Contract with Adani Power

BHEL announced that it has secured a significant order worth over Rs 3,500 crore from Adani Power Limited to establish a thermal power project in Raipur, Chhattisgarh. The contract, signed on June 5, includes the supply of equipment such as boilers, turbines, and generators, as well as the supervision of erection and commissioning for the 2x800 MW power project based on Supercritical Technology. The boiler and turbine generator will be manufactured at BHEL’s Trichy and Haridwar plants, respectively.

BHEL's recent share performance and the substantial contract from Adani Power indicate the company's potential for growth despite market volatility. Investors and analysts will be closely watching the stock's technical levels and broader market conditions to gauge its future trajectory.