BHEL Surges 3% as UBS Initiates 'Buy' Amidst Major Order Win
Overview
Bharat Heavy Electricals Ltd shares climbed over 3 percent Friday, erasing losses from a steep Thursday selloff. The rebound followed UBS initiating a 'Buy' rating with a ₹375 target, citing strong order momentum. A key catalyst is BHEL's ₹5,400-crore coal gasification plant order, marking the first commercial use of its proprietary PFBG technology.
Stocks Mentioned
BHEL Shares Rebound Sharply
Shares of Bharat Heavy Electricals Ltd (BHEL) surged over 3 percent in early Friday trading. This recovery follows a sharp 9 percent decline experienced just a day prior. The stock traded at ₹280.75, regaining ground lost to policy-related concerns that had triggered a broad sell-off across capital-goods stocks.
UBS Bullish Call Ignites Rally
Buying interest resurfaced after global financial services firm UBS initiated a 'Buy' recommendation on BHEL. The brokerage set a price target of ₹375 per share, suggesting potential for over 35 percent upside from recent levels. UBS cited robust order momentum and improving execution visibility as primary drivers for its positive outlook.
Major Coal Gasification Order Secured
A significant factor supporting UBS's view is a ₹5,400-crore order for a coal gasification and raw syngas cleaning plant. Awarded by BCGCL, a joint venture between Coal India and BHEL, this project is crucial. It represents the first commercial application of BHEL's proprietary Pressurised Fluidised Bed Gasification (PFBG) technology. The project has a 42-month execution timeline, followed by a 60-month operations and maintenance phase.
Market Context and Performance
Friday's rebound also reflects opportunistic buying in capital-goods stocks that were heavily sold off on Thursday. Competitors like Siemens, ABB India, and L&T also saw pressure. Despite the recent volatility, BHEL shares have delivered strong performance over the past year, gaining approximately 28 percent. This significantly outpaces the Nifty 50's gain of around 10 percent during the same period. BHEL's market capitalization stood near ₹94,700 crore at the previous close.
