Bharat Heavy Electricals Limited (BHEL), a leading engineering and manufacturing company, has received a significant show cause notice from the Goods and Services Tax (GST) authorities in Telangana. The notice, issued on September 18, 2025, covers a three-year period from fiscal year 2021-22 to 2023-24, with a total amount in question of ₹586.43 crore.

Breakdown of the Show Cause Notice

The GST show cause notice breaks down the amounts for each fiscal year as follows:

Details of the Notice

The notice was issued under Section 73 of the Central GST Act and Telangana GST Act, 2017 by the Assistant Commissioner (ST) of the Commercial Tax Department, Telangana. According to BHEL's disclosure, the authorities based their notice on the company's GST Annual Returns and Financial Statements.

BHEL's Response

In its communication to the stock exchanges, BHEL stated that the issues raised in the show cause notice appear to be generic in nature and seem 'not tenable.' The company is currently evaluating the issues to prepare a suitable reply to the GST authorities.

Financial Implications

BHEL has indicated that since the case is at the show cause notice stage and no order has been issued yet, the expected financial implications cannot be quantified at this time. The company will likely provide further updates as the situation develops.

Regulatory Compliance

The disclosure of this information by BHEL is in line with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, which requires listed companies to inform the stock exchanges about material events that may impact their operations or financial position.

As this matter unfolds, investors and stakeholders will be watching closely to see how BHEL addresses the concerns raised by the GST authorities and what impact, if any, this may have on the company's financial position in the coming months.

Bharat Heavy Electricals Limited (BHEL), a leading engineering and manufacturing company, has clinched a significant order from Indian Railways, reinforcing its position in the railway safety equipment sector.

Order Details

BHEL has received an order worth ₹22.87 crore from the South Western Railway, a division of Indian Railways, for the supply and installation of Kavach equipment. The contract encompasses a comprehensive scope of work, including:

• Design and development of Kavach equipment
• Supply of on-board Kavach equipment for locomotives
• Supply of trackside Kavach equipment for various railway locations
• Installation, trial, and commissioning of the equipment

Project Scope and Timeline

The project involves installing Kavach equipment at multiple railway infrastructure points, including:

• Stations
• Level Crossings (LC)
• Intermediate Block (IB) signaling
• Automatic Block Signaling (ABS) locations

BHEL is expected to complete this project within 18 months, as stipulated in the contract terms.

Manufacturing and Execution

The Kavach equipment for this order will be manufactured at BHEL's Bengaluru plant, showcasing the company's domestic manufacturing capabilities. This aligns with the Indian government's 'Make in India' initiative, promoting local production and self-reliance in critical sectors.

Significance of Kavach System

Kavach, which means 'armor' in Hindi, is an indigenously developed Automatic Train Protection (ATP) system. It is designed to enhance railway safety by preventing train collisions and ensuring adherence to speed limits. The implementation of Kavach is a crucial step in modernizing India's railway infrastructure and improving passenger safety.

Impact on BHEL

This order strengthens BHEL's footprint in the railway sector, particularly in safety-critical systems. It demonstrates the company's ability to secure contracts in competitive bidding processes and highlights its expertise in advanced railway technologies.

The contract, while not significantly large in monetary terms for a company of BHEL's size, is strategically important. It positions BHEL as a key player in the ongoing modernization of Indian Railways, potentially opening doors for more extensive contracts in the future.

Conclusion

The ₹22.87 crore order from Indian Railways for Kavach equipment represents a positive development for Bharat Heavy Electricals Limited. It not only contributes to the company's order book but also reinforces its role in enhancing railway safety infrastructure in India. As BHEL moves forward with the execution of this project, it will be interesting to observe how this contract influences its position in the railway equipment market and its potential for securing similar orders in the future.