BHEL shares reach 12-year high: What's fueling the impressive rally
Stocks of Bharat Heavy Electricals Limited (BHEL) surged over 14% today, reaching a 12-year high of Rs. 269.45 on the National Stock Exchange. The surge extends the state-run equipment manufacturer's gains to over 20% in just four trading sessions. The boost in BHEL's stock price has been linked to reports that the company could benefit from Rs. 17,195 crore investment approved by the National Thermal Power Corporation (NTPC) for the third phase of Singrauli Super Thermal Power Project.
BHEL and Coal India sign joint venture agreement
Apart from NTPC's approval, another factor that is driving BHEL's shares is its joint venture agreement with Coal India to develop its coal-to-chemicals business. The partnership will establish coal to ammonium nitrate plant using BHEL's in-house developed pressurized fluidized bed gasification technology. The equity shareholding will be 51% with Coal India and 49% with BHEL. The collaboration has sparked buying interest among investors, with more than 16.52 crore shares of BHEL traded on NSE today.
BHEL stock performance and outlook
Since last year, BHEL stocks have yielded over 260% returns, outshining Nifty's returns of 27% during the same period. BHEL's shares are currently trading above their 50-day and 200-day simple moving averages (SMAs). Following the recent rally, the stock has entered the overbought zone. BHEL stocks closed at Rs. 265.15 today, which is 12.40% higher than the last session. The stock's all-time high stands at Rs. 390.66, achieved in November 2007.