BHEL's Second Innings

As India's Power Demand Soared, Only BHEL Had Capacity To Deliver

What?

India’s thermal power sector is seeing a revival amid multiple back-to-back harsh summers, and the state-run capital goods manufacturer BHEL is at the heart of it.

As power demand surged during the harsh summers of 2023 and 2024, BHEL seemed to be the only company in India that had the ready capacity to meet the equipment requirement.

This March, BHEL hit its highest ever order book and annual order inflows.

While BHEL was struggling with a lack of orders from the thermal power segment, the new orders became a lease of life for the company.

With Chinese contractors out of favour and other Indian competitors like L&T just re-entering the market, BHEL has become the unexpected frontrunner.

Why Does It Matter?

The dependence on thermal power is not only for capacity but also for grid stability. Even though India aspires to grow its renewable energy, the need for stable power during peak demand has revived coal projects.

The first seven years of the last decade were marked by a constant decline in demand for new thermal power capacity.

With funding and preference for coal-based power declining, most of the Indian companies moved to other segments.

BHEL remained the only company with the capacity for thermal orders.

“The country realised the need for the recreation of thermal power capacity along with renewable energy generation in order to create grid stability. The current beneficiary is only BHEL, and I hope other Indian manufacturers will get their act together quickly and fulfil the country’s demand,” MS Unnikrishnan, former managing director and CEO for Thermax and at present CEO of IITB-Monash Research Academy, told The Core.

Is India ready for its next big power push?

CORE NUMBER

58.8

That’s India’s services PMI for May 2025 —marginally up from April’s 58.7. The PMI, compiled by S&P Global and tracked by HSBC, measures business activity across sectors on a scale of 0 to 100. A score above 50 signals expansion, while below 50 indicates contraction.

In May, India’s services sector saw record hiring as companies ramped up to meet demand, especially from global clients. New export orders surged, with firms citing strong traction from Asia, Europe, and North America.

What’s also notable:

• 16% of firms increased staff, pushing employment to the highest level in the survey’s 19-year history

• Input costs rose, driven by higher outlays on cooking oil, meat, and materials

• Companies passed on costs to consumers, signalling continued price pressures

India Flags Trade Barriers. Amid growing concerns over rising protectionism and a stalled dispute resolution system at the World Trade Organisation (WTO), India has urged member nations to take action against non-tariff barriers and distortions caused by non-market economies. At a mini-ministerial in Paris, ahead of the WTO’s 2026 ministerial in Cameroon, commerce minister Piyush Goyal called for restoring the dispute settlement body, safeguarding special treatment for developing nations, and prioritising long-standing, mandated issues.

Anil Ambani’s Insolvency Reprieve. The National Company Law Tribunal court had recently admitted Anil Ambani’s Reliance Infrastructure into the Corporate Insolvency Resolution Process — a legal process under the insolvency law where companies in default undergo court-monitored debt resolution. The trigger? A payment dispute dating back to a 2011 energy purchase deal with Dhursar Solar Power. Now, in a twist, the National Company Law Appellate Tribunal suspended the insolvency order, giving the company a breather.

Census Returns With New Questions. After a 16-year wait, India is finally gearing up for its next national headcount, with a twist. The much-delayed census is set to kick off on March 1, 2027, with an early start in snow-bound states like Jammu and Kashmir, Ladakh, Himachal Pradesh, and Uttarakhand from October 2026. For the first time, it will include a caste and sub-caste enumeration, marking a politically charged shift ahead of key elections. The last census was in 2011, and the 2021 count was shelved due to the COVID-19 pandemic, leaving a massive data gap in policymaking.

Kia Employees Caught Stealing. Cops have found two Kia factory employees guilty of stealing 1,008 engines from the carmaker’s factory in Andhra Pradesh over the course of three years. The two – one team leader and one engine dispatch section head – would forge invoices and manipulate gate passes, in collusion with another individual who helped with transport and a scrap dealer who helped sell the engines as far as New Delhi. The engines were worth $2.3 million in total.

PODCAST

On Episode 599 of The Core Report, financial journalist Govindraj Ethiraj talks to Rohit Arora, CEO & Co-Founder at Biz2Credit & Biz2X as well as Manisha Kapoor, CEO and Secretary-General at the ASCI.

• Markets break out of their losing streak

• Rupee among the worst performing Asian currencies in recent periods

• India’s census exercise is slotted, 7 years behind schedule

• Rare earth supply fears spread around the world, automotive companies gear for plant shut downs

• Did you know who actually makes almost 90% of the famous Dubai viral chocolate?

👥 THE TEAM

✍️ Zinal Dedhia, Salman SH, Kudrat Wadhwa | ✂️ Rohini Chatterji | 🎧 Joshua Thomas