Shares of Bharat Heavy Electricals Ltd (BHEL) remained in focus as brokerages weigh the implications of a possible easing of restrictions on Chinese companies bidding for Indian government contracts, even as fresh order wins and improving execution provide support to the stock.
Recent media reports have indicated that India may consider relaxing rules introduced in 2020 that restricted Chinese firms from participating in public procurement.
Shares of BHEL closed flat ₹274.25 on the NSE, hitting a high of ₹285.50 It tanked 17 per cent to a low of ₹261.50 on January 8, 2026, from the 52-week high of ₹305.90 on January 7, 2026.
Jefferies flags higher impact on L&T, Afcons and BHEL
Jefferies, in its note on the industrials sector, said such a move could have differentiated impact across companies. According to the brokerage, defence is expected to see the least impact from any relaxation, while companies such as L&T, Afcons and BHEL could face relatively higher competitive intensity.
ABB and CG Power could also see some impact, while transmission and distribution players like Siemens Energy and Hitachi Energy may be largely insulated due to the national security priority attached to the transmission grid.
Bernstein echoed a cautious stance, saying it would be surprised if the government were to completely remove the existing framework without constraints. Some form of relaxation is likely, potentially on a segment-specific basis or accompanied by additional compliance requirements for Chinese firms.
Bernstein also noted that the push for change may be coming not only from the Ministry of Power but also from other ministries such as steel. Importantly, it believes that if the policy does evolve, multinational equipment suppliers would be more impacted than construction-heavy companies, with the key beneficiaries being asset owners such as Power Grid and NTPC, whose projects could be executed faster and at lower costs.
According to PL Capital, BHEL and L&T could face incremental competitive pressure in the BTG segment if Chinese players are permitted to bid for government contracts, given their historical involvement. However, due to the strategic sensitivity and control risks associated with critical infrastructure projects, Chinese participation is likely to remain limited.
UBS reaffirms ‘buy’ rating on BHEL following order wins
Against this backdrop of policy uncertainty, UBS struck a more constructive tone on BHEL, reiterating its ‘buy’ rating with a target price of ₹375. The brokerage highlighted BHEL’s recent win of a ₹54 billion coal gasification and raw syngas cleaning plant order, which takes the company to around 60 per cent of its targeted FY26 order inflows.
UBS also pointed to an order awarded by BCGCL, the joint venture between Coal India and BHEL, for a coal-to-ammonium nitrate project. This project marks the first commercial deployment of BHEL’s proprietary pressurised fluidised bed gasification technology, signalling a transition from R&D to execution.
The company’s improving order inflows, technology differentiation and execution pipeline are seen as key factors that could help offset broader sectoral concerns.
Published on January 9, 2026
