BHEL may slip below Rs 100: Ajay Srivastava

Ajay Srivastava, CEO of Dimensions Consulting told CNBC-TV18, "Government cleared that the Ultra Mega Power Project (UMPP) will have to source it domestically, which leaves it 2 or 3 players in the market, gives lot of leeway to BHEL to come and participate in that. So there was an emotional kind of recovery thinking they will start to get orders and they do not have to compete with the Chinese counterpart, which they were bleeding to death in the last couple of years. So, the detailed note saying that UMPPs will have to buy from a domestic manufacturer gives a leg up to BHEL.”

He further added, “There was some kind of a short covering exhaustion taking place in BHEL. The stock has been brought down from almost Rs 200 to Rs 100 in less than a matter of month. So you had 50 percent fall in the share price; huge amount of shorts coming in. Government is saying you can only buy domestic for UMPPs. So there was an artificial build up at least for sometime relief to BHEL. I would not say it is a permanent relief because I think the share price will go back again to below Rs 100, but temporarily there is a big relief on that part that their orders seemed to be assured against the competition from the Chinese."