BHEL in focus after Rs 15,530-crore NTPC order; stock up 6% in 5 days
BHEL is a special company that helps make important things for places called power plants. Power plants are like big factories where we get the electricity that lights up our homes and helps our machines work.
BHEL just got a super-duper big job from another important company called NTPC. NTPC also works with power plants. This job they got is worth a lot of money – a whopping Rs 15,530 crore! That’s like having a whole lot of coins and notes all together. BHEL will be working on this job for a long time, more than eight years, to make sure everything is just right.
They also got some other jobs from different companies. One was from NHPC and the other was from a special group related to Adani Power. It’s like BHEL is winning lots of prizes for being really good at what they do.
Because BHEL got all these exciting jobs, people who have something called “shares” in BHEL are also really happy. Shares are like pieces of the company that people can buy, and when the company does well and gets big jobs like these, the value of those shares goes up.
That’s why the price of BHEL’s shares went up by almost 6 percent in just five days. It’s like more people want to have a piece of the company because they know it’s doing great things. So, BHEL’s shares, which were worth Rs 118 on August 30, became even more valuable because of all the good news. And that’s the happy story of BHEL and their exciting journey with these important jobs!
BHEL, the clever company we talked about earlier, is going to do something really amazing. They’re going to build a special type of power plant in a place called Lara, which is in a state called Chhattisgarh. This power plant is going to be even more advanced and powerful. It’s called a “2×800 MW Supercritical Thermal Power Project Stage-II.”
What’s super cool is that BHEL got this important job by participating in a kind of competition called “International Competitive Bidding.” It’s like when different companies show how well they can do a job, and the best one gets chosen.
Now, let’s imagine this job is like building a super awesome playhouse. BHEL has to do a lot of things to make it perfect. They need to plan how it will look, make all the parts, and put them together.
They have to be very careful and do things like making sure the place is strong and safe. They’ll also add some special things that help keep the environment clean, like making sure the smoke that comes out isn’t bad for the air. They’ll even make sure all the things inside the playhouse, like the switches and buttons, work perfectly.
So, in short, BHEL is like a team of super builders who are going to create an incredible power plant in Lara. And this power plant will be very powerful, capable of making a lot of electricity using different sources, like something called biomass. They’re going to do everything step by step, from the beginning of the idea to when it’s all finished and ready to make lots of electricity for people to use. Isn’t that amazing?
They’re going to work on a big project in two parts, kind of like building two special playhouses. The first part is called “Unit-1,” and BHEL will work on it for about 48 months. The second part is “Unit-2,” and they will take about 52 months to finish it.
But that’s not all! BHEL is like a magical shop that makes and provides special things for power plants. They’re going to give a bunch of important stuff, like a boiler, a turbine, and generators, to another company named Mahan Energen Ltd. Mahan Energen Ltd. is like a friend of BHEL and is part of a bigger company called Adani Power. They want to make a big power project in a place called Bandhaura, which is in a state named Madhya Pradesh.
BHEL is not only giving these special things, but they’re also going to help put them together. It’s like if you gave your friend a puzzle, and then you helped them put all the pieces in the right places. BHEL will be there to make sure everything is done perfectly and the power project works just like it should.
So, BHEL is like a superhero of building, helping to make these amazing projects happen in different places. It’s really exciting and shows how clever and helpful BHEL is!
Prabhudas Lilladher, which is like a team of people who understand a lot about businesses and how they do, are sharing some thoughts about BHEL. They’re saying that BHEL is making some smart moves that will be good for the company in the long run.
One thing they mentioned is that BHEL is getting more orders to work on thermal power projects. It’s like when you get more people asking for your help because they know you’re really good at something. BHEL is also doing something called “diversification.” This means that they’re not just focusing on one thing, like power plants. They’re also looking at different areas like railways, defense (which is about protecting a country), nuclear (which is about using special energy from atoms), and hydro (which is about water power).
BHEL is like a talented artist who’s learning to paint with lots of different colors instead of just one. This way, they can do many things and help different kinds of projects, which is really smart!
Now, there’s something called the “stock price” that shows how much people are willing to pay for a piece of BHEL (remember those pieces are called shares?). Right now, BHEL’s stock price is a bit high compared to the money the company might make in the future. Prabhudas Lilladher thinks the stock is trading at a number called PE of 46.8x/26.6x FY24/25E. This is like saying the stock’s price is a bit higher than what they expect the company to earn.
However, even though they have these thoughts, Prabhudas Lilladher is giving a suggestion. They are saying that people who have BHEL shares might want to think about selling a bit, which is why they have a “reduce” call on BHEL. They have a target price in mind, which is like saying, “Hey, if you want to sell, maybe think about doing it when the price reaches Rs 67.”
So, to put it simply, Prabhudas Lilladher is saying that BHEL is doing some good things for the future, but right now, the stock price might be a bit too high, and they’re suggesting that people might consider selling some shares if the price reaches Rs 67. It’s like getting advice from wise people about how to make good choices with your money.
