Bhel proved the biggest gainer in the 30-share Sensex in morning trades on Wednesday as a strong order book is prompting the interest of institutions.
By 10:42 IST, the scrip of the power equipment major leaped up 7.52% to Rs 202.25 as a result. Relatively high volumes of over 700,000 shares were recorded on the counter by then. With today's gains, the scrip has risen 15% from Rs 176 on 31 January 2003.
As per market sources, institutions are leading the buying in Bhel. Morgan Stanley, in particular, has been named as a significant buyer.
Perhaps, a major trigger for the stock today is news that Bhel is in the process of receiving a huge order of over Rs 8,000 crore (Rs 80 billion) from NTPC Sipat. The scrip is also drawing strength from rumours that the Electricity Bill will be passed into law soon.
The Electricity Bill will be welcomed as it seeks to do away with the current restrictions on power generators and aims at reforming the sector. Analysts say the bill will improve the power sector and the health of State Electricity Board. This, in turn, will help Bhel improve its financials as the power equipment major receives 60% of its revenues from SEBs.
Last week, Bhel unveiled its third quarter ended 31 December 2002 results - a net profit rise of 1.5% to Rs 81.33 crore compared to Rs 80.15 crore in the corresponding period of the previous year. Total income increased by 14% to Rs 1,699.76 crore (Rs 16.99 billion) from Rs 1,490.17 crore (Rs 14.9 billion) in DQ 2001.
Meanwhile, analysts are hopeful that the company will register good performances in the coming quarters following its strong order book position. Bhel's order book stood at Rs 12,850.00 crore (Rs 128.5 billion) as at the end of December 2002. The order intake is estimated to grow by 20% despite one large order of BSES worth Rs 2,850 crore (Rs 28.5 billion) getting postponed to FY 2003-04. The management expects two large orders to compensate for this shortfall Karnataka Power Corporation's 500 MW Bellary Project worth Rs 1,000 crore (Rs 10 billion) and the 500 MW Birsingpur Project promoted by the Madhya Pradesh State Electricity Board worth Rs 1,800 crore (Rs 18 billion).
Bhel is the largest engineering and manufacturing enterprise of its kind in India, and is one of the leading international companies in the field of power equipment manufacture. The Centre has decided to sell 17% equity stake in Bhel to bring down its holding in the company to 51% from 67.7%. The heavy industry ministry has granted its concurrence to the proposal for divesting 17% stake to the public, financial institutions and employees.
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