BHEL - Motilal Oswal

BHEL: NTPC bulk tender – Delhi High Court restrains NTPC from opening price bids, due today, until Feb 3, 2011

Delhi High Court has restrained NTPC from opening price bids for the 11 x 660MW bulk tender for boiler package.

NTPC had earlier invited price bids from BHEL, L&T-MHI JV and BGR Energy (manufacturing JV with Hitachi) for their 11 x 660MW bulk tender.

Once this process is completed, we expect final award of 11 x 660MW turbine package also. Bharat Forge (will get 5 units), BHEL (4 units) and Toshiba (2 units)

We do not expect Ansaldo to get a favorable response from the Court. Nonetheless, the award will further get postponed.

We believe that the entire project (Rs220b) comprising two separate tenders for boiler and TG packages will be awarded by end-FY11. We expect BHEL to bag Rs95b worth of orders from the bulk-tender (6% of Rs1,540b order-book; 15% of FY11 expected order-inflow of Rs628b, up 5% over Rs599b in FY10). We maintain a Buy rating on BHEL.

Source : Equity Bulls

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