BHEL Shares Bounce Back After UBS Sees Big Gains Ahead — Check Target Price

After facing a heavy selloff triggered by policy-related concerns, Bharat Heavy Electricals Ltd (BHEL) bounced back in early trade on Friday, gaining more than 3 per cent. The stock was trading at Rs 280.75, up 3.31 per cent.

Rebound after strong sell-off

The rebound came a day after the stock saw a sharp selloff, falling nearly 9 per cent and briefly hitting its lower circuit limit. The fall on Thursday was triggered by reports that the government may relax restrictions on Chinese companies bidding for public sector contracts. The news hit investor sentiment and led to a broad sell-off in capital-goods stocks, including Siemens, ABB India and Larsen & Toubro.

What helps

Global broking firm UBS has initiated a "Buy" call on BHEL with a target price of Rs 375, implying an upside of about 35 per cent from Thursday's closing levels, citing the company's strong order book and improving execution visibility.

The brokerage highlighted a Rs 5,400-crore contract awarded to BHEL by BCGCL, a joint venture between Coal India and BHEL. The project involves setting up a coal gasification and raw syngas cleaning plant.

The plant will be part of a coal-to-ammonium-nitrate facility. The project is notable, as it marks the first commercial use of BHEL's proprietary Pressurised Fluidised Bed Gasification (PFBG) technology, which converts coal into gas under high pressure in a controlled environment, making the process more efficient and environmentally safer than conventional methods.

The contract has a 42-month timeline for construction and commissioning, followed by a 60-month operations and maintenance period.

Market sentiment and sector impact

Friday's rebound was not limited to BHEL. Selective buying can be seen across capital-goods stocks that were heavily sold off a day earlier, reflecting investors' willingness to re-enter the sector after Thursday's panic-driven correction.

Despite recent volatility, BHEL's performance over the past year remains strong. The stock has gained about 28 per cent over the last 12 months, compared with a rise of around 10 per cent in the Nifty 50 during the same period. At Thursday's close, BHEL's market capitalisation stood at about Rs 94,700 crore.

Disclaimer

The views and recommendations expressed are solely those of the individual analysts or entities and do not reflect the views of Goodreturns.in or Greynium Information Technologies Private Limited (together referred as "we"). We do not guarantee, endorse or take responsibility for the accuracy, completeness or reliability of any content, nor do we provide any investment advice or solicit the purchase or sale of securities. All information is provided for informational and educational purposes only and should be independently verified from licensed financial advisors before making any investment decisions.