BHEL, India’s largest power equipment maker, is seeing a big comeback thanks to the government’s renewed focus on coal-fired power plants and rising demand for coal-powered energy, according to sources.
After struggling for around three years, BHEL’s order book is now full, especially for boilers and engineering contracts. In FY24, the company secured orders worth ₹52,000 crore for 9.6 gigawatts (GW) of thermal power projects — its highest ever for coal-based projects. This momentum is expected to continue, with the government planning 80 GW of thermal power capacity by 2032.
Around 70% of BHEL’s business is related to the power sector, and the rest involves supplying equipment for industries like transportation, defense, and aerospace. After a three-year lull in thermal power orders, BHEL is now getting inquiries even from private companies for its boiler, turbine, and generator (BTG) equipment.
BHEL is optimistic about its ability to meet growing demand, despite concerns about its limited capacity to manufacture boilers and other equipment. The company sees opportunities in the government’s plan to increase thermal power generation to 280 GW by 2032, positioning itself as a key player in the expansion.
India’s electricity demand has been rising sharply, reaching 243 GW in FY24, and is expected to hit 384 GW by 2032. BHEL expects this demand to drive the continued need for coal-based power plants in the near term.
BHEL has also returned to paying dividends, giving ₹55 crore to the government for FY24, following two consecutive years of payouts. Credit rating agency India Ratings and Research upgraded BHEL’s outlook to “stable” in June 2024 for the first time since 2021.
Despite a recent 2.8% drop in BHEL’s share price, the stock has surged 48.57% so far this year.
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