Bhel recovered on Wednesday on buying support at lower levels.

The scrip of the power equipment major gained 2.7% to Rs 215.40 in late afternoon trades. The scrip was trading near the day's high of Rs 216. The scrip clocked a modest volume of 520,000 shares on BSE.

Dealers say there is follow-up buying taking place in the stock. In the last few months, funds were believed to have mopped up Bhel shares.

The buying support in Bhel comes after the scrip eased in the last two trading sessions. Earlier, it hit a 52-week high of Rs 214.90 on 21 February 2003. From that high, the scrip shed 2.4% in two trading sessions to Rs 209.55. Before that, the scrip surged sharply on heavy fund buying. The scrip, from a low of Rs 145.55 on 1 November 2002, jumped 47.6% in a few months to the 52-week closing high of Rs 214.90 on 21 February 2003.

The stock today was also boosted by reports that the company has bagged a turnkey contract to set up a 400-KV grid sub-station in Tamilnadu, by Tamilnadu Electricity Board valued at Rs 70 crore.

Bhel has a strong order book position of Rs 12,850 crore (Rs 128.5 billion) (as on 31 December 2002). Expectations that the company will bag further orders and benefits from the Electricity Bill have been factors driving up the stock of late. 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 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.

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.