BHEL shares surge 297% in 3 years! time to hold or sell?

BHEL Share Price Today: Bharat Heavy Electricals Ltd (BHEL), the defence PSU stock, has gained significant attention with a 279% return over the last three years. Recently, it saw a 6% rise over the past five sessions, showcasing a fresh uptrend. However, the stock has shed 8% over the past year.

Choice Broking has singled out BHEL as their "Stock Pick of the Month" for March, with a ‘buy’ rating after a sharp increase in share price. The state-owned company reported a notable 2x jump in its net profit, reaching ₹134.7 crore for the December 2024 quarter, driven by higher revenues.

BHEL's Latest Earnings Update:

Net profit for Q3 FY 2024-25 stood at ₹134.7 crore, compared to ₹60.3 crore in Q3 FY 2023-24.

Revenue increased to ₹7,385 crore from ₹5,599 crore a year ago.

Despite power generation growth slowing in the latter half of 2024, domestic power generation rose by 3% in the quarter, although this was a decline from last year’s 12% growth.

Stock Pick: Should You Buy BHEL? Choice Broking sees strong potential in BHEL, currently trading around ₹201.9. They’ve set a target price of ₹229.7, offering a significant upside potential. The firm suggests a stop loss at ₹188, with an immediate support level at ₹198, considering recent trends and volume growth signaling a possible breakout.

The stock has formed an inverted head-and-shoulders pattern on the daily chart, indicating a potential reversal. If BHEL closes above ₹202.5, it could drive further gains, aligning with the firm’s bullish outlook. The RSI (Relative Strength Index) is rebounding from the oversold zone, further suggesting strength in the stock’s momentum.

Technical Indicators:

Support level: ₹198

Target price: ₹229.7

Stop loss: ₹188

Key Moving Averages: The stock is above the 20 EMA, and trading near the 100 EMA at ₹203.2, which could confirm the bullish trend if surpassed.

Conclusion: BHEL’s stock offers a promising buying opportunity, with the potential for substantial returns based on technical analysis and recent earnings growth. However, investors are advised to consider individual risk tolerance and consult experts before making any decisions, as market conditions can evolve rapidly.

Disclaimer: This analysis represents the views of individual analysts or broking companies. It’s essential to conduct thorough research and seek professional advice before making investment decisions.