Bharat Heavy Electricals Limited (BHEL)

BHEL secures Rs 19,422 Cr turnkey contract for Ultra Supercritical Power Plant in Odisha

New Delhi: Bharat Heavy Electricals Limited (BHEL) has emerged as the leading bidder for a Rs 19,422-crore turnkey contract to construct a thermal power plant for NLC India in Talabira, Odisha.

This news comes from a recent report by the Hindu Business Line, revealing that BHEL outperformed its competition, including L&T-MHI, by offering a more competitive price. The financial bids for this substantial project were opened on a recent Friday.

Project Details:

BHEL is set to build three ultra supercritical units, each boasting a capacity of 800 MW, for NLC India at the Talabira site. Notably, NLC has expanded the project by adding a fourth unit of 800 MW. While the Engineering, Procurement, and Construction (EPC) tender covered the first three units, it remains uncertain whether a separate tender will be issued for the additional unit. Ultra-supercritical thermal plants, characterized by significantly high steam temperature and pressure (approximately 600 degrees C and 240 bar), offer enhanced efficiency, yielding more power per unit of fuel.

Financial Performance and Stock Growth:

Over the past six months, BHEL’s stock price has more than doubled, registering a remarkable 133% increase, reflecting an improved business outlook. This surge stands in stark contrast to the S&P BSE Sensex, which witnessed a growth of 10.6% during the same period. BHEL’s shares have consistently delivered positive annual returns since 2021, with a 150% gain in the previous year, 34% in 2022, and an impressive 64% in 2021, marking it as the company’s best calendar year since 2003.

Order Book Position:

As of September 30, 2023, BHEL’s order book reached a substantial Rs 1.14 trillion. A breakdown reveals that 72% (Rs 82,673 crore) of the orders originated from the power sector, while 24% (Rs 27,810 crore) came from the industry sector, and the remaining 4% (Rs 3,942 crore) stemmed from exports. The company attributes the robust order booking to successful diversification initiatives and a resurgence in thermal power ordering.

Financial Year 2023-24 Order Performance:

In the first half of the financial year 2023-24 (April to September), BHEL secured orders worth Rs 33,479 crore, a substantial increase compared to the Rs 12,310 crore orders obtained during the same period in the previous fiscal year. The company credits the fructification of diversification initiatives and the revival of thermal power ordering for this remarkable order growth.