Bharat Heavy Electricals Limited (BHEL) shares gained momentum in the stock market following a significant legal victory and the start of new arbitration proceedings. Investors and analysts are closely watching how these developments will impact the company’s financial health.
Big Win Against RattanIndia Power
In a major legal victory, BHEL won a ₹115 crore case against RattanIndia Power Ltd. The Delhi High Court ruled in BHEL’s favor, upholding an arbitration award that also includes an 18% annual interest on the amount from July 2017.
The case had been ongoing for years, with RattanIndia Power challenging the arbitration ruling. However, the latest court decision reaffirmed BHEL’s claim, ensuring it will receive long-overdue payments. This legal win boosts the company’s liquidity and strengthens its financial position.
New Arbitration Battle Begins
Even as BHEL celebrates this victory, the company is preparing for another legal fight. It has initiated fresh arbitration proceedings against Fitwell Constructions to recover ₹283.7 crore. The opposing party has yet to respond with a counterclaim, but the case could take time to resolve.
Legal disputes are common in the infrastructure and manufacturing sector, and BHEL’s proactive approach to recovering dues is seen as a positive move by investors.
Stock Market Reaction
The legal developments led to a nearly 2% jump in BHEL’s share price, which reached ₹200.50 during Monday’s trading session. The company’s market capitalization now stands at over ₹70,000 crore.
However, despite this rise, BHEL shares are still down more than 40% from their 52-week high of ₹335.40, recorded in July 2024. Investors remain optimistic that the stock could recover further, especially with a strong order pipeline.
Financial Performance & Expert Opinions
BHEL’s recent financial results have been impressive. For the December 2024 quarter, the company reported a net profit of ₹134.7 crore, marking a massive 170% jump compared to ₹60 crore in the same period last year. Revenue also surged 32% to ₹7,277 crore.
The company’s order inflow rose by 167% year-on-year to ₹6,860 crore, while its order book expanded by 47% to ₹1.6 lakh crore. These figures indicate a solid growth trajectory.
Market analysts are mostly positive about BHEL’s stock. Out of 17 analysts, seven recommend buying, while two suggest holding the stock. Phillip Capital has maintained a ‘buy’ rating with a target price of ₹270, citing strong financial performance and future growth potential.
Final Takeaway
BHEL’s recent legal victory provides a financial boost, and the fresh arbitration case signals the company’s commitment to recovering its dues. While the stock saw a short-term rise, its long-term performance will depend on its ability to execute its growing order book and navigate ongoing legal challenges. Investors should keep an eye on future developments before making any decisions.
