Shares of Bharat Heavy Electricals (BHEL) rose almost 3% in morning trade on the BSE on Friday, 17 July, to their 52-week high of ₹446.75, buoyed by their healthy Q1FY27 results.
BHEL share price opened at ₹445.35 against its previous close of ₹435.40 and soon rose 2.60% to its one-year high level. The stock jumped 4% in the previous session after the Maharatna PSU (public sector undertaking) company reported its June quarter earnings.
If the PSU stock ends in the green on Friday, it will be its third consecutive session of gains.
BHEL Q1FY27 results
During market hours on 16 July, BHEL reported a consolidated net profit of ₹376.71 crore in Q1FY27, supported by increased income. Notably, the PSU company had suffered a loss of ₹455.50 crore in the corresponding quarter of the last financial year.
Its total income rose to ₹7,911.86 crore in Q1FY27 from ₹5,658.07 crore in the year-ago period.
BHEL to make fast chargers for electric trucks and buses
According to BHEL’s FY26 annual report, it will make India’s first indigenous fast chargers for electric trucks and buses, as the Centre has tasked it with manufacturing 360 kW fast chargers for long-haul and large commercial electric vehicles.
As a Mint report explained, these would be the first completely indigenous fast chargers to be developed as part of India’s efforts to build a local ecosystem under the Electric Vehicles Sub-systems flagship programme of the Ministry of Electronics and Information Technology.
Should investors buy BHEL shares?
Experts appear largely positive about the stock on a long-term basis, given the company’s strong growth outlook.
Brokerage firm ICICI Securities maintained a buy call on the stock with a revised target price of ₹520 (40 times FY28E earnings) from ₹450 earlier.
ICICI pointed out that BHEL has started FY27 on a strong note, with revenue growing 40% YoY. It reported EBITDA of ₹500 crore versus a loss of ₹530 crore YoY and margins at 6.5%. As a result, PAT came in at nearly ₹380 crore – positive for the first quarter, after Q1FY19.
“We believe this performance was driven by a pick-up in execution of projects won in the new cycle – these have better realisation. It has won new orders worth ₹2.7 lakh crore over the last three years. BHEL reported Q1FY27 order inflow of ₹26,700 crore, taking its order book to ₹2.6 lakh crore – 7.2 times trailing-twelve-month sales,” said ICICI Securities.
“We expect execution to grow at a 13% CAGR over FY26–28 and profitability to improve further on the back of (i) better realisation in recent order wins, (ii) execution to peak from now on, improving utilisation and kicking in operating leverage, and (iii) exemption to import 21 critical input materials from China, reducing the cost. We estimate FY27 and FY28 EBITDA margin at 9.5% and 14.2%, respectively,” said ICICI Securities.
Brokerage firm JM Financial also has maintained a buy call on the stock with a target price of ₹481.
JM Financial pointed out that Q1FY27 witnessed a sharp pickup in execution. The 202 bps YoY improvement in gross margin (31%) indicates an increasing share of new orders in execution mix, which fetch higher realisation.
“BHEL is among our top 5 picks as the 97GW of the original target for thermal additions now extends to 110GW+,” said JM Financial.
On the other hand, PL Capital has maintained its ‘reduce’ rating on the stock because of the recent rally in the stock price.
As per BSE data, BHEL shares have surged nearly 65% in the last six months compared to a 7% fall in the equity benchmark Sensex in the same period.
PL Capital has raised the stock’s target price to ₹368 from ₹321 earlier, valuing the stock at a PE of 25 times March 2028 (23 times September 2028 earlier), owing to better execution.
However, PL Capital has revised its FY27E and FY28E EPS estimates by +5.4% and +5.8%, respectively, factoring in an improvement in execution and normalisation in provision.
“Along with the current order pipeline, opportunities in nuclear, coal gasification and green hydrogen are expected to provide new growth avenues,” said PL Capital.
The brokerage firm highlighted that opportunities across HVDC and green energy corridors, defence and rail mobility are expected to drive incremental order inflows and strengthen diversification across end markets.
“BHEL offers strong multiyear revenue visibility, with robust execution momentum and sustained investments in India’s power and infrastructure sectors expected to support future growth. The stock is currently trading at a P/E of 44.2 times and 29.6 times on FY27E and FY28E, respectively,” said PL Capital.
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Disclaimer: This article is for educational purposes only and does not constitute investment advice. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
