Shares of BHEL rallied as much as 5.46 per cent to hit intraday high of Rs 143.65 after the Supreme Court allowed appeal against Madras High Court's stay over construction of Ennore SEZ Supercritical Thermal Power Project.
BHEL had won a contract in October 2014 worth Rs 7,800 crore from Tamil Nadu Generation and Distribution Corporation (TANGEDCO) for setting up 2X660 megawatt thermal power plant on engineering, procurement and construction (EPC) basis at at Ennore SEZ. However, the contract was challenged by a rival consortium.
BHEL had put this order from TANGEDCO into 'slow moving' category and the project is about 7 per cent of BHEL's order backlog.
After the court verdict, CLSA has upgraded the stock to 'buy' from 'sell' saying it's a 'significant litigation win'. CLSA has a target price of Rs 164 per share and sees improved earnings visibility going ahead.
BHEL ended 3.7 per cent higher at Rs 141.25.
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