Shares of Bharat Heavy Electricals Ltd (BHEL) rose close to 3% in morning trade on Monday after UBS began coverage on the stock with a ‘Buy’ rating and a price target of ₹340. The brokerage is optimistic about BHEL’s prospects, citing a fresh wave of thermal power orders and strong earnings potential ahead. As of 9:34 AM, the shares were trading 2.72% higher at Rs 248.00.
UBS highlighted that India plans to add 80 GW of new thermal capacity by FY32, with about 35 GW of orders likely between FY25 and FY28. With BHEL holding an 85% market share in thermal equipment orders from FY17 to FY25, UBS believes the company is best placed to benefit from this demand surge.
While renewables continue to grow, UBS expects thermal power to play a crucial role in grid stability and load management. It forecasts BHEL’s capacity utilization to rise to nearly 40%, up from current levels, driven by 6–8 GW of annual project execution.
This ramp-up is expected to significantly boost profits. UBS projects a six-fold jump in BHEL’s EBITDA by FY28, with its earnings estimates running 9–20% higher than consensus, indicating potential upside the market may not be fully pricing in.
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