Shares of Bharat Heavy Electricals Ltd. climbed 3.2% in Mumbai trade on Wednesday after the engineering bellwether clinched another high-value grid stabilization contract from Power Grid Corporation of India.
Capital goods buyers chased the stock to an intraday high before shares settled 1.8% higher at ₹430.80 on the National Stock Exchange. The stock has gained 48% year-to-date. Institutional demand followed an exchange disclosure confirming that Power Grid issued a Notification of Award—on behalf of its project special purpose vehicle—for a transmission package valued between ₹600 crore and ₹900 crore, excluding Goods and Services Tax.
BHEL will design, engineer, manufacture, test, and commission two +300/-200 MVAR synchronous condensers at Kalyanpur in Gujarat. The utility has slated execution over a 35-month timeline. The installation integrates renewable power flows from the Jam Khambhaliya Renewable Energy Zone into the national grid.
Synchronous condensers—essentially rotating electrical machines operating without mechanical loads—supply and absorb reactive power to regulate bus voltage. They provide essential inertia and short-circuit strength to prevent voltage collapse, particularly across high-voltage direct current (HVDC) corridors handling intermittent renewable generation.
The Gujarat order marks BHEL’s second identical transmission win in less than a week. On November 7, Power Grid awarded BHEL an order within the same ₹600 crore to ₹900 crore price band for two +300/-200 MVAR units at the Barmer-II HVDC Terminal Station in Rajasthan under a 44-month execution window.
| Contract Parameter | Kalyanpur Installation (Gujarat) | Barmer-II Terminal (Rajasthan) |
|---|---|---|
| Awarding Entity | Power Grid SPV | Power Grid Corporation of India |
| Estimated Value (Excl. GST) | ₹600 crore to ₹900 crore | ₹600 crore to ₹900 crore |
| Equipment Scope | Two +300/-200 MVAR Synchronous Condensers | Two +300/-200 MVAR Synchronous Condensers |
| Project Purpose | Jam Khambhaliya RE Zone Integration | HVDC Terminal Voltage Stabilization |
| Execution Schedule | 35 Months | 44 Months |
Market Context: Synchronous condenser installations represent a fast-growing, high-margin transmission equipment niche in India. As thousands of megawatts of solar and wind generation connect across western corridors, the lack of natural turbine inertia forces grid operators to deploy heavy rotating condensers to prevent catastrophic frequency trips.
Balance sheet friction also cleared this week. The Telangana Commercial Tax Department issued an adjudication order dropping a ₹207.26 crore GST demand raised against BHEL for the financial year 2022-23.
No penalty. No interest. No balance sheet liability.
The order, dated November 7, 2026, and communicated to the company on November 9, was handed down by the Assistant Commissioner of the State Tax Department. BHEL confirmed in a regulatory filing that the dismissal leaves no financial impact on its earnings.
Yet the dispute formed part of a larger ₹586.43 crore tax claim issued in September 2025 across three fiscal periods: ₹184.55 crore for FY22, ₹207.26 crore for FY23, and ₹194.62 crore for FY24. In January 2026, tax authorities dismissed ₹183.77 crore of the FY22 assessment. With FY23 now extinguished, only the ₹194.62 crore assessment for FY24 remains under adjudication—a claim management expects authorities to resolve on identical grounds.
BHEL’s operational turnaround showed up decisively in its quarterly numbers. Second-quarter revenue grew 23.8% year-on-year to ₹9,300 crore, topping consensus analyst expectations of ₹9,236 crore.
Net profit more than doubled to ₹810 crore, compared with ₹368 crore in the corresponding period last year, demolishing street projections of ₹654.4 crore. Operating leverage delivered an outsized boost: earnings before interest, tax, depreciation, and amortisation (EBITDA) surged 77% to ₹1,026 crore, comfortably ahead of the ₹881 crore consensus estimate.
EBITDA margin widened 330 basis points to 11%, up from 7.7% a year ago and beating the 9.5% analyst consensus. That marks BHEL's highest second-quarter operating margin in 13 years. Execution speed on high-voltage equipment and thermal power island contracts continues to accelerate order-to-cash conversion across its industrial segments.
With two transmission project awards banked inside five days and tax disputes unraveling in its favor, BHEL now heads into the second half of the fiscal year backed by an expanding transmission order pipeline and a pending final resolution on its remaining ₹194.62 crore FY24 tax review.