Bhel surged further on Friday on good buying support.

The stock of the state-run power equipment major rose by 1.1% to Rs 214.60 on the BSE in mid-afternoon trades. Earlier, it touched a high of Rs 216.50. 362,000 shares changed hands on the counter.

Bharat Heavy Electricals stock has been northward bound of late amid intermittent corrections. The stock has been boosted by the Union Cabinet's clearance on Wednesday for the Electricity Bill, that will be introduced in Parliament in the ongoing Budget session. The stock, which tumbled soon after posting dismal Q2 (ended September 2002) results, has staged a smart rally. From 145.55 on 1 November 2002 (a low it touched after the announcement of Q2 results), the stock has gained 47.4% in 3 ½ months to the current Rs 214.60.

Dealers said the stock may rally further.

Bhel's strong order book position (Rs 12,850 crore (Rs 128.5 billion) as at the end of December 2002), expectations that it would bag further orders and benefits from the Electricity Bill are the factors driving up the stock, dealers said. Through the Electricity Bill, the government wants to set up facilities for better transmission and distribution, take steps to cut power theft and improve bill collections of bankrupt state electricity boards. The passage of the Bill in Parliament will accelerate the reforms in the power sector, research firm Salmon Smith Barney has said in a recent report.

Broad ranging reforms in the power sector include de-licensing and freeing power generation, and allowing direct sale of power to consumers by producers instead of routing through state electricity boards.

Reforms in the power sector at the state level have made significant progress over the last few years, driven largely by political compulsions.

Meanwhile, as per reports, Bhel proposes to bid for the Rs 8,000-crore (Rs 80 billion) 1,980-MW coal-based project of NTPC Sipat, bids for which have already been invited. This is the first power project in India with super critical technology. It has three units of 660 MW each. The bids are likely be opened on 28 March 2003.

For Q3 ended 31 December 2002, Bhel posted a net profit growth of 1.5% to Rs 81.33 crore, compared to Rs 80.15 crore in the corresponding period of the previous year. Total income increased by 14% to Rs 1,699.76 crore (Rs 16.99 billion) from Rs 1,490.17 crore (Rs 14.9 billion) in DQ 2001.