Bhel's fortunes varied on Tuesday, falling 1.3% to Rs 204.10 after gaining 0.99% to Rs 208.95 earlier on.

At the time of writing this piece, Bhel was down by 0.1% to Rs 206.70 compared to a close of Rs 206.90 on Monday. 370,00 shares changed hands on BSE.

The stock has turned volatile of late after rallying sharply from its early November 2002 low. The stock has surged over the last few months on sustained buying. From Rs 145.55 on 1 November 2002, the scrip gained 42% to settle at a two-year closing high of Rs 206.90 on Monday, 17 February 2003.

Dealers say domestic mutual funds and institutional investors have been accumulating the stock. Morgan Stanley is also believed to be mopping up the shares of the PSU power equipment major.

Institutions seem to have realised the strength of Bhel's strong order book. There are also expectations that the power equipment major will win further orders. As per reports, Bhel proposes to bid for the Rs 8,000-crore 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.

Bhel's order book stood at Rs 12,850 crore (Rs 128.5 billion) as at the end of December 2002.

The yet to be implemented Electricity Bill is seen as a major trigger for the stock. Market men are expecting that the long-delayed bill will be finally introduced in Parliament in the ongoing budget session. The Electricity Bill proposes broad ranging reforms in the power sector which include de-licensing and freeing power generation, allowing direct sale of power to customers instead of having to go through state electricity boards.

Reforms in the power sector at the state level having been making quite but significant progress over the last few years driven by political compulsions. The passage of the bill will accelerate this reforms process, Salmon Smith Barney has said in a recent report.

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 14.90 billion) in DQ 2001.