Synopsis: With the stock giving a 3 year compounded return of 54 percent, BHEL has bagged a Rs 2800 Crore order, which includes design, engineering, supply, and civil works, along with a 60-month O&M service agreement. As of Q3FY26, the company has a robust order book of Rs. 2,22,800 Crore.
The largecap stock of BHEL was in the spotlight after the company received an order worth Rs 2800 Crore, but even after such a significant order the stock fell by 6 percent, heres why.
With a market cap of more than Rs 90,000 Cr, Bharat Heavy Electricals Ltd saw its stock hit an intraday low of Rs 259 which is 6 percent lower than the previous close of Rs 276. While, the company stock has given a compounded return of 54 percent in the last three years.
What’s the News?
BHEL has received a Letter of Acceptance from Bharat Coal Gasification and Chemicals Limited (BCGCL), a JV of Coal India and BHEL, for executing the Syngas Purification Plant (LSTK-2 package) for a coal-to-2000 TPD ammonium nitrate project at Lakhanpur, Odisha.
This domestic contract is worth about Rs 2,800 crore, and includes design, engineering, supply, civil works, erection, commissioning, and a 60-month O&M service agreement. The project is to be commissioned within 42 months. Additionally, this order is a related party transaction and is being executed at arm’s length.
The Order Book
As of Q3FY26, the company’s order book stands at Rs. 2,22,800 Crore, with 20 percent are Industry orders including the exports, with the remaining 80 percent are Power orders. Talking specifically about Q2FY26, the company saw an order inflow of Rs 45,900 Crore, this also saw a similar pattern of 24 percent from Industry including the exports, and 76 percent from Power.
Reason for Negative Stock Movement
The stock’s 6 percent decline could be due to the government’s announcement to divest up to a 5 percent stake in Bharat Heavy Electricals Ltd (BHEL) through an Offer for Sale (OFS) starting Wednesday, at a floor price of Rs 254 per share- around 8 percent below the previous close. The sale comprises a 3 percent base stake and a 2 percent greenshoe option, if full subscribed this would get the government to raise about Rs 4,422 crore.
Bharat Heavy Electricals Limited (BHEL) is India’s leading engineering and manufacturing company in the power and industrial sectors. It designs, manufactures, and services equipment for power generation, transmission, transportation, defence, renewables, and heavy industries, supporting infrastructure development and energy security across India and global markets.
BHEL’s key clients include NTPC, Power Grid Corporation, Indian Railways, ONGC, IOCL, GAIL, Coal India, state electricity boards, metro corporations, defence organizations, and major public and private sector enterprises in India and abroad.
In the latest quarterly result the company has seen its revenue from operations increase by 16 percent YoY, from Rs 7,277 Cr in Q3FY25 to Rs 8,473 Cr in Q3FY26, while the QoQ increased by 13 percent from Rs 7,512 Cr. The net profits grew by 188 percent going from Rs 135 Cr in Q3FY25 to Rs 390 Cr in Q3FY26, while the QoQ increased by 4 percent from Q2FY26’s Rs 375 Cr.
The company has a 3 year sales CAGR of 10 percent, while the TTM is at 10 percent. The company’s 3 year profit CAGR is at 6 percent, while the TTM number is at 57 percent. The company also has a ROCE of 5 percent and a ROE of 2 percent.
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