State-owned engineering major Bharat Heavy Electricals Limited (BHEL) has secured a significant contract valued at around ₹5,400 crore, placing the company in sharp focus on the stock markets. The announcement triggered a positive reaction from investors, with BHEL shares gaining in early trade as confidence improved around the company’s medium-term growth prospects.
The order has been awarded by Bharat Coal Gasification and Chemicals Limited (BCGCL), a joint venture between Coal India Limited (CIL) and BHEL. Coal India holds a majority stake of 51 percent in the joint venture, while BHEL owns the remaining 49 percent. The project is part of BCGCL’s coal-to-ammonium nitrate initiative being developed at Lakhanpur in Jharsuguda district of Odisha.
Under the contract, BHEL will execute the Coal Gasification and Raw Syngas Cleaning Plant, known as the LSTK-1 package, on a lump-sum turnkey basis. The scope of work includes detailed engineering, equipment supply, civil construction, erection, testing, commissioning, and performance guarantee validation. In addition, BHEL will provide operations and maintenance services for a period of five years after commissioning.
As per the project timeline outlined in the Letter of Acceptance, the commissioning and performance guarantee tests are expected to be completed within 42 months from the date of award. The company clarified that while the contract qualifies as a related-party transaction due to the joint venture structure, it has been awarded on an arm’s-length basis and in line with regulatory norms.
The project is aligned with India’s broader push to promote coal gasification as a cleaner and more efficient use of domestic coal resources. The gasification facility will support the production of ammonium nitrate, a key input for fertilisers and industrial explosives, reducing reliance on imports.
Separately, BHEL has also begun supplying semi-high-speed underslung traction converters for Indian Railways’ Vande Bharat Sleeper train project. Manufactured at the company’s Bengaluru unit, these converters form part of advanced propulsion systems designed for trains operating at speeds of up to 160 kmph.
Market participants believe that the large coal gasification order, combined with growing opportunities in railway equipment, enhances BHEL’s revenue visibility and reinforces its position as a key player in India’s infrastructure, energy, and manufacturing ecosystem.
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