Bharat Heavy Electricals Ltd. (BHEL) and Hitachi Energy India shares soared in early trade on November 26, after a consortium between the firms bagged a contract from the Power Grid Corporation of India.
The consortium has been awarded the contract for the establishment of over eight hundred 6000 MW high voltage direct current (HVDC) terminal stations at Khavda Pooling Station-2 (HVDC) and Nagpur (HVDC) for the evacuation of renewable power from the Khavda region in Gujarat to Nagpur in Maharashtra.
At 9.15 am, Hitachi Energy India shares were quoting Rs 12,595.45 on the NSE, up 8.02 percent, while BHEL shares were trading higher by 1.23 percent at Rs 244.19 apiece.
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Scope of work includes converter transformers, AC/DC control and protection, gasinsulated high-voltage switchgear, thyristor valves, 765kV/400kV substation and auxiliary systems to be delivered by Hitachi Energy India along with its consortium partner BHEL.
India's ambitious push for 8GW of renewable energy from the Khavda region is part of a broader plan to expand the interstate transmission system under phase V, part A. Expected to be ready by 2029, this project plays a key role in the country’s 500-gigawatt renewable energy goal. It also marks a milestone as the first HVDC project awarded through tariff-based competitive bidding.
HVDC technology is the most efficient and economical way to transmit clean energy over long distances, with the flexibility of two-way flow, thus making it a core technology in India’s ambition to have a strong and responsive grid for renewable energy.
Nuvama Institutional Equities expects Hitachi Energy India's share of the order inflow to be around Rs 4,000-6,000 crore. The brokerage added that Hitachi Energy is sitting on its highest-ever backlog of Rs 8,910 crore, providing strong revenue visibility over the next ~24–26 months.
A month ago, the firm also announced its plan to invest about Rs 2,000 crore to expand capacity, portfolio, and talent base in order to support accelerating global demand for clean energy solutions (both domestic as well as exports).
The brokerage reiterated its buy call on Hitachi Energy India, setting a target price of Rs 16,500 per share, which indicates an upside of 41.5 percent from current levels.
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