BHEL Share Price Hits 52-Week Low Amid Arbitration Proceedings

On February 18, 2025, shares of Bharat Heavy Electricals Limited (BHEL) declined by 5%, reaching a 52-week low of ₹183.60 during intraday trading. The downturn followed the initiation of arbitration proceedings by Ducon Technologies against BHEL, involving claims totaling approximately ₹30 crore.

Arbitration Details

Ducon Technologies Inc., USA, along with Ducon Infratechnologies Ltd., India, have filed claims amounting to $3,089,179.05 and ₹3,78,64,057.80, respectively, plus interest. The Indian Council of Arbitration appointed an arbitrator on February 17, 2025, to oversee the dispute. BHEL has stated that it is actively defending against these claims.

Market Reaction

By 2:25 PM on February 18, BHEL’s stock was trading at ₹185.15 per share, marking a 4.29% decrease on the Bombay Stock Exchange (BSE). The stock closed at ₹186.50, down 3.59% for the day.

Financial Performance

In the quarter ending December 31, 2024, BHEL reported a consolidated net profit of ₹134.7 crore, a significant increase from ₹60 crore in the same period the previous year. The company’s consolidated revenue from operations rose by 32.3% to ₹7,277.1 crore during this quarter.

Recent Developments

Despite the recent stock decline, BHEL has secured substantial orders in recent months. Notably, the company received a Letter of Intent from Chhattisgarh State Power Generation Company Limited for an Engineering, Procurement, and Construction package valued at approximately ₹11,800 crore. This project involves the construction of two 660-megawatt supercritical thermal power plants at the Hasdeo Thermal Power Station in Korba District, Chhattisgarh.

Additionally, BHEL secured an order worth ₹7,500 crore from Gujarat State Electricity Corporation Limited for the establishment of an 800 MW unit at the Ukai Supercritical Thermal Power Plant in Gujarat.

Analyst Perspectives

Market analysts have offered mixed views on BHEL’s stock. Some brokerage firms have maintained a ‘buy’ rating, citing the company’s strong order book and potential for growth in the thermal power sector. Others have expressed caution, highlighting concerns over execution challenges and the impact of ongoing arbitration proceedings on the company’s financial health.

Investors are advised to monitor the developments in the arbitration case and assess BHEL’s ability to execute its substantial order backlog effectively.