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Investing.com - JPMorgan has initiated coverage on Bharat Heavy Electricals Ltd (NSE:BHEL) with an Underweight rating and a price target of INR185.00.
The stock has surged approximately 276% over the past three years and 445% over the past four years, significantly outperforming the Nifty Fifty index, which rose about 40% and 43% over the same periods, respectively.
JPMorgan attributes the stock’s strong performance to robust order inflows for coal-based power plant equipment, which increased sharply after COVID due to peak power shortages that could not be met through solar power.
While the research firm acknowledges more orders are ahead, it believes a substantial portion of the ordering cycle is already complete. JPMorgan expects the pace of order inflows to reduce sharply as the initial rush to order and construct coal-based capacity normalizes.
The firm also cites long-term concerns, noting that the rise of energy storage systems alongside inexpensive solar power poses an existential threat to the future quantity of coal-based power generation plants needed in India.
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