Bharat Heavy Electricals Secures Rs.13,300 Crore Contract for Jharkhand Power Plant

Bharat Heavy Electricals Ltd (BHEL) has secured a Rs.13,300 crore order to establish a 1600 MW thermal power plant in Koderma, Jharkhand. The contract, awarded by Damodar Valley Corporation (DVC), is for the engineering, procurement, and construction (EPC) of the Koderma Thermal Power Station (TPS), consisting of two 800 MW units. 

Boost to Energy Security

The tender aligns with the government’s goal to strengthen the country’s energy security. Once completed, the installed thermal generation capacity of DVC will increase to 8140 MW by 2030. This investment is also expected to positively impact the local economy, providing benefits to the community in and around Koderma.

Recent Orders

BHEL has had a robust FY24, securing EPC contracts totaling around Rs.30,000 crore for the Yamuna Nagar (Rs.4,000 cr), Lara SuperCritical Power Plant (Rs.5,000 cr), and Raigad Super Critical Power Plant (Rs.6,000 cr) from the Adani Group. Additionally, BHEL has orders worth Rs.15,000 crore for 80 Vande Bharat trains and 20 super rapid gun mounts for naval ships, with the first Vande Bharat trains expected to be delivered by June 2025.

Expanding into Sectors

Over the past 1.5 years, BHEL has  expanded in the defense sector, securing orders worth Rs.10,000 crore. BHEL has also submitted a bid for air defense guns valued at Rs.2,500 crore along with partnering with a European firm for marine gas turbines, with bid results anticipated in early FY26. This diversification is expected to contribute significantly to BHEL’s revenue.

Addressing Power Demand

India’s power consumption has grown by 8%–10% annually from FY22 to FY24. In response, the government plans to add 80 GW of thermal capacity by 2032. Currently, 30 GW is under construction, with an additional 44–45 GW of projects expected to be awarded by FY27. This translates to over 10 GW of annual tendering in the next three years, potentially generating contracts worth Rs.200,000 crore for the power sector.

Market Reaction

Following the announcement of the contract, BHEL’s shares saw a 3% rise, reaching Rs.306. BHEL’s current market capitalization stands at approximately Rs.106,000 crore, highlighting its significant presence in the industry.

Conclusion: BHEL’s contract to construct the Koderma thermal power plant marks a boost in strengthening India’s energy infrastructure. This project not only reinforces BHEL’s industry position but also contributes to the nation’s bigger goals, BHEL seems well-equipped to meet energy demands and drive growth across multiple sectors in the coming future.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.