Shares of Bharat Heavy Electricals Ltd (BHEL) lost more than 7 percent on May 5 and became the worst hit on Nifty 200, with profit-taking creeping in after a 19 percent rally in the past one month.
At 12:24pm, the stock traded at Rs 81.30, down 5.48 percent, on the NSE on Friday.
BHEL was in a symmetrical triangle formation, which implies that volatility for the stock is shrinking slowly and may soon breakout. The stock did give a breakout at Rs 77 towards the end of April, which took the scrip to Rs 87 on May 3, said Milan Vaishnav, CMT, MSTA, founder and technical analyst, Gemstone Equity Research and ChatWizard FZE.
“Right now, there is no directional move visible in the stock, which does not make a good case for entry. BHEL is in the correction phase and is expected to be range bound between Rs 76 and Rs 88,” he said.
The scrip was trading with volumes of 2,343,082 shares, as compared with its 30-day average of 1,118,976 shares, an increase of 109 percent.
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Nuvama Institutional Equities has turned ‘neutral’ from ‘negative’ in April as fresh thermal capex can see near-term spike in ordering, though sustenance of orders beyond FY25 is still hazy, it said. The brokerage firm had pointed out that the stock price already factors near-term pick-up in order inflow and margin recovery till FY25, while a broader sustenance of order inflows beyond FY25 and correction in stock price would make Nuvama turn bullish on the stock.
Prabhudas Lilladher sees the company’s revenue growing around 14.3 percent on-year in the quarter ended March, led by a pickup in execution. Kotak Institutional Equities sees about 7 percent YoY improvement in revenues, largely driven by the power segment.
“Management commentary on execution pace, working capital situation, order pipeline, diversification into non-power segment, margins will be key monitorables,” Prabhudas Lilladher added.
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