ICICI Securities Revises The Target Price Of This Power Stock And Increases The 28% Buy Call Up To 70%

The latest report of ICICI Securities, a leading brokerage firm, has given a buy call with a potential upside of a whopping 70% for the stock from the power sector. The brokerage firm is bullish on Bharat Heavy Electricals Ltd. and has given a buy call with a target price of Rs. 100 for the stock.

In the most recent trading sessions, many big power sector stocks are falling sharply, but Bharat Heavy Electricals is moving to the upside with the strong moment. The price has shown a trend reversal in the past few weeks, and ICICI Securities suggests the stock can go to the upside of 70%.

Outlook Of Bharat Heavy Electricals Ltd. (BHEL)

Bharat Heavy Electricals Ltd is a large cap company from the power sector. A manufacturer of integrated power plant equipment, Bharat Heavy Electricals Ltd. provides a comprehensive range of goods and services for the power, renewable energy, transmission, transportation, oil and gas, industry, and defense sectors of the economy. The Indian government owns and controls this leading engineering and manufacturing firm.

The stock's current market price is Rs. 58.9, and the price is in strong upside momentum. The stock's all-time low is Rs. 41.4, and the price of the all-time high is Rs.80.4. As per the latest report of ICICI Securities, the stock has the potential to cross its all-time high and reach the target price of Rs.100.

Valuation of Bharat Heavy Electricals Ltd

"As per Central Electricity Authority's (CEA) recently released Draft National Electricity Plan, 43GW of thermal capacity is expected to be added over the next decade. We believe ordering for ~15GW will happen in the near term for it to get commissioned by FY27. Thus, we expect awarding of coal-based projects to gather pace in next 12-24 months given the recent power crunch faced by the country," mentions ICICI Securities' latest report.
Further, the report mentions, "We believe, with domestic thrust toward manufacturing and the company's efforts to improve its balance sheet, BHEL can revive given its strong technical track-record. Company is taking cost-control measures and working on reducing receivables, with an increased focus on cashflows."

Buy Call Of ICICI Securities On Bharat Heavy Electricals Ltd.

As mentioned in the latest report of ICICI Securities, "The Central Electricity Authority (CEA) has recently (in the Draft National Electricity Plan) announced coal-based capacity addition of 43GW over the coming decade (25GW of which is under construction and balance is to be awarded soon). This has further strengthened our conviction on the stock as we believe the new coal plants ordering will give BHEL time to ramp up its non-power segments in the coming years. Furthermore, we expect the industrial segment business to accelerate on the back of improved outlook. Maintain BUY with a revised target price of Rs100 (previously: Rs76) as we roll-forward our valuations to FY25E."