BHARAT HEAVY ELECTRICALS LTD (BHEL)
BHARAT HEAVY ELECTRICALS LTD — Stage 2 setup with EFS 78.0 and investment score 73.0.
Investment Read
BHEL is a 62-year-old Maharatna PSU — the moat is in long-cycle order execution and the government's strategic position in domestic power and defence infra. The earnings risk is the reverse: working-capital intensity, project delays, and wage-revision cycles that compress margins in weak quarters.
₹2.4 trillion order book + CRISIL AA upgrade = the balance-sheet risk is now low. The question is margin: Q4 FY26 EBITDA margin was 14.2% — can it hold above 10% in lighter quarters?
BHEL (Bharat Heavy Electricals Limited) is India's largest engineering and manufacturing PSU — Maharatna status, Government of India enterprise. It designs, manufactures and installs heavy electrical equipment for power generation (thermal, nuclear, solar, hydro), transmission, industry (traction, defence, aerospace, oil & gas), and exports to 80+ countries.
FY26 consolidated revenue was ₹33,782 Cr (+19.2% YoY), and PAT reached ₹1,600 Cr — the strongest profit in at least four years — driven by a Q4 FY26 execution sprint (revenue ₹12,310 Cr, OPM 14%). The trailing twelve months (TTM) revenue stands at ₹35,993 Cr with PAT ₹2,432 Cr and TTM EPS ₹6.99. Q1 FY27 revenue was ₹7,698 Cr (+40.3% YoY), PAT ₹377 Cr; operating margin was 7% — Q1 is seasonally light and front-loaded costs are normal for BHEL's execution profile.
Order book: ₹2.4 trillion (as reported; ~7× annual revenue), with a strong pipeline from thermal capacity additions under India's power-deficit correction programme, defence electronics, and nuclear islands. ICICI Direct raised its Buy target to ₹460 (May 2026); JM Financial has a Buy at ₹430; 20-analyst consensus (S&P Global) averages a constructive view at current valuations.
Credit: CRISIL upgraded BHEL to AA / Stable in 2026 — the second positive rating action in quick succession, also confirmed by CARE Ratings. This materially lowers borrowing costs on any working-capital or project-finance draw.
The near-term watch: whether Q2 and Q3 FY27 can sustain OPM above 8–10% (H2-loaded execution), and whether TTM FCF turns positive after the large working-capital absorptions of FY25–26.
Decision Frame
- Moat: Only domestic OEM with end-to-end capability across thermal, hydro, nuclear, solar and defence — government strategic asset, 62 years of installed base.
- Order pipeline: ₹2.4 trillion backlog (7× revenue); revenue visibility 3–4 years out; key risk is execution pace and milestone recognition.
- Financials: FY26 OPM 8% annual / Q4 FY26 OPM 14%; interest cover robust post CRISIL AA upgrade; FCF watch — working-capital intensity in large project companies is the main risk.
- Technical: Stage 2, RSI 54.80, SMA200 ₹330 — price is 25%+ above its 200-DMA; trend is intact but a pullback to SMA50 (~₹409) offers a cleaner entry than chasing.
- Invalidation: OPM falling below 6% for two consecutive quarters, order-book growth stalling, debt rising materially, or a sustained close below SMA200.
Fundamental Scores
Agent Adda scores from snapshot (stage_snapshot). Useful ranking signals — not standalone buy/sell rules.
Score Interpretation
EFS 78.0 is the composite fundamental score: it indicates a reasonably strong combination of earnings quality (85.0), sales growth (80.0), financial strength (60.0), and institutional bias (80.0). The weaker sales-growth/financial-strength components are why the score is not a clean quality signal. Investment Score 73.0 is lower because it blends the fundamental stack with the current technical setup, where the technical score is 62.7. In plain English: the tape is stronger than the balance-sheet evidence, so the stock can screen well for momentum without removing execution, leverage, or valuation risk. Validate the scores against audited cash flow, debt, margins, dilution, and the next two quarters before treating them as conviction.
Company Overview
Bharat Heavy Electricals Limited (BHEL) — Maharatna PSU, Government of India enterprise, 62+ years of installed base. India's only end-to-end heavy-electrical OEM covering thermal, nuclear, hydro, solar, defence electronics, aerospace, and rail traction.
What they do
BHEL designs, manufactures, and commissions power plant equipment (boilers, turbines, generators, switchgear, transformers), industrial drives, defence electronics, aerospace sub-systems and solar EPC. It also offers a lifecycle O&M and refurbishment business on its 6,500+ MW of installed base across 90+ countries.
Scale & order book
FY26 revenue ₹33,782 Cr (+19.2% YoY); order backlog ~₹2.4 trillion (7× annual revenue). Breakdown: Power segment (~55–60% of revenue), Industry segment (~29%), International and exports (~10%). Largest individual order categories: supercritical thermal sets, nuclear island equipment and defence R&D programmes.
Competitive moat & key risks
Moat: Only domestic OEM with government backing and full-spectrum capability; import substitution beneficiary in defence and nuclear. Risks: working-capital intensity (project billings lag costs), execution delays, wage-revision cycles, margin volatility between H1/H2 (execution is back-loaded), and government capex policy changes.
Historical P&L
FY26 revenue ₹33,782 Cr (+19.2% YoY); FY26 PAT ₹1,600 Cr — the best profit in at least four years. OPM improved from ~6% in FY24 to ~8% in FY26 (annual average), with Q4 FY26 delivering a 14.2% EBITDA margin — the strongest margin quarter in recent history, driven by project-milestone billings. Q1 FY27 revenue ₹7,698 Cr (+40.3% YoY), PAT ₹377 Cr; Q1 margin is typically 6–7% because heavy execution and milestone recognition falls in H2. TTM revenue ~₹35,993 Cr, TTM PAT ~₹2,432 Cr, TTM EPS ₹6.99. CFO FY26 was ₹5,837 Cr; FCF ₹5,261 Cr — strong cash generation relative to asset base. Key reconciliation: Q1 FY27 PAT YoY comparison looks extreme because Q1 FY26 (Jun 2025) was a loss quarter (PAT ≈ –₹456 Cr); separate genuine operating improvement from base-effect distortion before extrapolating growth rates.
| Period | Revenue | Op. Profit | OPM | PAT | EPS | Payout |
|---|---|---|---|---|---|---|
| Mar 2023 | 23,365 | 1,044 | 4.5% | 654 | 1.88 | 21% |
| Mar 2024 | 23,893 | 711 | 3.0% | 282 | 0.81 | 31% |
| Mar 2025 | 28,339 | 1,399 | 4.9% | 534 | 1.53 | 33% |
| Mar 2026 | 33,782 | 2,572 | 8% | 1,600 | 4.60 | 30% |
| TTM | 35,993 | 3,383 | 9% | 2,432 | 6.99 |
Quarterly Results
6 quarterly periods are available. Jun 2026 revenue was 7,698 Cr and PAT 377 Cr; the latest sequential change was revenue -37.5% and PAT -70.8%. Use the next filing to test whether the latest growth rate is recurring and whether operating margin and cash conversion are moving with earnings.
| Quarter | Revenue | Op. Profit | OPM | PAT | EPS |
|---|---|---|---|---|---|
| Mar 2025 | 8,993 | 832 | 9% | 504 | 1.45 |
| Jun 2025 | 5,487 | -537 | -10% | -456 | -1.31 |
| Sep 2025 | 7,512 | 581 | 8% | 375 | 1.08 |
| Dec 2025 | 8,473 | 545 | 6% | 390 | 1.12 |
| Mar 2026 | 12,310 | 1,753 | 14% | 1,290 | 3.71 |
| Jun 2026 | 7,698 | 504 | 7% | 377 | 1.08 |
Balance Sheet And Cash Flow
3 balance-sheet/cash-flow periods are available. Latest reported borrowings are 8,187 Cr, CFO is 5,837 Cr, and FCF is 5,261 Cr. Read these alongside PAT, working-capital movements, capex, and financing flows: profit growth is higher quality when it converts to operating cash without repeated debt or equity funding.
| Balance sheet item | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|
| Equity Capital | 696 | 696 | 696 |
| Reserves | 23,742 | 24,026 | 25,450 |
| Borrowings+ | 8,856 | 9,015 | 8,187 |
| Total Liabilities | 59,784 | 68,849 | 76,888 |
| Fixed Assets+ | 2,574 | 2,947 | 2,999 |
| Total Assets | 59,784 | 68,849 | 76,888 |
| Cash flow item | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|
| CFO | -3,713 | 2,192 | 5,837 |
| CFI | 1,331 | -2,731 | -3,035 |
| CFF | 2,656 | -857 | -1,806 |
| FCF | -3,936 | 1,902 | 5,261 |
| Net Cash | 274 | -1,396 | 996 |
Concall, Filings And News
Evidence reviewed: 8 concall artifacts and 6 exchange/company announcements. The read-through below distinguishes reported numbers, management claims, and checks required before relying on the catalyst.
Annual report and management read-through
- Quarter context (Jun 2026): Revenue 7,698 Cr (+40.3% YoY), PAT 377 Cr (-182.7% YoY).
- Annual report source: Annual Report 2022from bse. This is the report link returned by the extractor; it was not locally parsed in this run, so verify revenue quality, risks, related parties, debt, and cash flow before relying on a thesis.
- Analytical check: compare the latest result with the annual report for margin durability, cash conversion, leverage, segment mix, and management guidance; separate reported facts from management claims.
Concall evidence and what to test
Recent announcements and implications
- Disclosure Under Section 30 Of SEBI (LODR), Regulations, 2015-Fine26 Aug- BSE and NSE imposed Rs. 11,03,300 each fine fo
- Announcement under Regulation 30 (LODR)-Change in Management25 Aug- BHEL's GM and Head (COC) Sumeet Salhotra superannuat
- Disclosures under Reg. 29(2) of SEBI (SAST) Regulations, 201118 Aug
- BHEL Signs SCA With M/S Hystar AS, Norway For PEM Electrolyser Systems For Green Hydrogen Projects.13 Aug- BHEL signed
- Announcement under Regulation 30 (LODR)-Credit Rating12 Aug- BHEL informed exchanges of its credit rating upgrade by Ind
- Bharat Heavy Electricals Quarterly Results, Financial Summary ...: 5 days ago · The Quarterly Results page of Bharat Heavy Electricals Ltd. presents the key result items, its comparison with the sector peers and its previous 5 Quarterly Results.
- Bharat Heavy Electricals Quarterly Results, Bharat Heavy ...: Jul 16, 2026 · Get Bharat Heavy Electricals latest Quarterly Results, Financial Statements and Bharat Heavy Electricals detailed profit and loss accounts.
- Bharat Heavy Electricals - Quarterly Results and Financial ...: 1 day ago · Bharat Heavy Electricals quarterly and annual financials: results, revenue, profit, P&L, balance sheet, cash flow, financial ratios, revenue mix, peer comparison, and financial documents
Sector And Competitive Context
Sector and peer claims are shown only when a same-date comparable dataset is available.
| Lens | Read-through |
|---|---|
| Sector | Not available |
| Data quality | No peer ranking asserted without comparable same-date observations. |
| Next check | Compare growth, margins, balance-sheet risk, valuation, and relative strength with the company’s listed peers. |
Peer ranking omitted: no comparable same-date peer dataset was supplied, so this report does not manufacture a self-comparison row.
Equity Chart V1
EOD chart from PostgreSQL market.equity_eod (130 bars). Range: 2026-02-19 → 2026-08-26.
Technical Analysis
Technical setup from cached snapshot (if available).
| Indicator | Value | Note |
|---|---|---|
| Stage | Stage 2 | Weinstein stage |
| Signal | — | Snapshot |
| RSI | 54.80 | Momentum |
| ADX | 24.3 | Trend strength |
| SMA20/50/200 | 414.19 / 409.18 / 330.12 | Trend context |
| Supertrend | SELL | Trend filter |
| Ratio | Value |
|---|---|
| Market cap | INR 1,51,226 Cr |
| P/E | 62.1x |
| ROCE | 9.14% |
| ROE | 6.23% |
| Book value | INR 75.1 |
| High / Low | 446.5 / 205.12 |
| Dividend yield | 0.34% |
Weinstein And O'Neil Read
Stan Weinstein Stage Analysis
The snapshot labels the stock Stage 2 (Stage 2 uptrend). Weinstein stage describes the position of price within a multi-month trend: Stage 1 is a base, Stage 2 an advance, Stage 3 a topping range, and Stage 4 a decline. It is a context framework, not a forecast or standalone trade signal.
Evidence check: price is above the 20/50/200-day averages, and the moving averages are stacked bullishly (414.19 / 409.18 / 330.12). RSI is 54.80 (neutral); ADX is 24.3 (limited trend strength); Supertrend is SELL. A bullish stage with weak momentum, a broken moving-average stack, or a conflicting Supertrend reading is a lower-quality setup.
William O’Neil / CAN SLIM Lens
C — Current earnings: latest PAT growth is -182.7% and revenue growth is +40.3%; confirm the next two quarters and check whether margin and CFO support the growth. A — Annual earnings: latest annual revenue growth is +19.2%; fill the missing periods before claiming a multi-year CAGR. N — New: identify a new product, customer, capacity addition, or catalyst and distinguish company guidance from delivered results. S — Supply/demand: price/volume confirmation matters; share issuance, promoter selling, or thin liquidity can weaken the setup. L — Leader: relative strength is not available; compare against the correct sector and Nifty benchmark rather than using price alone. I — Institutions: institutional-bias score is 80.00; verify actual ownership trend. M — Market: confirm that the broader index and sector are supportive. The practical conclusion is a watchlist-quality setup only when earnings acceleration, leadership, volume, and a definable risk point align.
Broker And Market View
Broker/analyst evidence is shown only when dated source results are returned.
Valuation Scenarios
Illustrative valuation from TTM EPS and P/E multiples (not a recommendation).
| Scenario | TTM EPS | P/E | Implied value | vs current | Condition required |
|---|---|---|---|---|---|
| Bear (multiple compression) | 6.99 | 43x | 304 | -30% | Risk-off, slower growth, lower multiple. |
| Base (current multiple) | 6.99 | 62x | 434 | +0% | Steady execution; multiple holds. |
| Bull (multiple expansion) | 6.99 | 75x | 521 | +20% | Sustained growth + quality premium. |
Issues And Risks
Generic risk framework; replace with annual-report-specific risks when the report is parsed.
| Risk | Why it matters | Severity | What to monitor |
|---|---|---|---|
| Demand / earnings | Cyclicality, customer concentration, or weak volume can make recent growth non-recurring. | Medium | Orders, volume, segment mix, and next two quarters. |
| Working capital | Receivables and inventory can absorb cash even when accounting profit rises. | Medium | CFO versus PAT, working-capital days, and FCF. |
| Leverage / capex | Debt-funded expansion increases fixed obligations and execution risk. | Medium | Borrowings, interest cover, capex milestones, and funding source. |
| Governance / disclosure | Related parties, auditor remarks, pledges, or inconsistent reporting can change the thesis. | Medium | Annual-report notes, exchange filings, auditor qualifications, and dilution. |
| Valuation / entry | A good business can still deliver poor returns when expectations are already high. | Medium | Earnings delivery, peer multiples, trend support, and risk point. |
Evidence Trail
Source-first trail for review.
- Screener consolidated page.
- NSE quote and filings.
- BSE quote and filings.
- Annual Report 2022from bse.
- Annual Report 2021from bse.
- Investor Relations - Bharat Heavy Electricals Limited.
- Bharat Heavy Electricals Limited - Official Website of Bharat Heavy ....
- BHEL FY 2025-26: Record Order Book Drives Strong Growth.
- Credit Rating Disclosure | Official Website of Bharat Heavy ....
- Bharat Heavy Electricals Limited upgraded to AA by CRISIL ....
- Bharat Heavy Electricals Limited June 16, 2026.
- Bharat Heavy Electricals Limited Revenue Breakdown – BSE:BHEL – TradingView.
- Bharat Heavy Electricals Limited - Wikipedia.
- Bharat Heavy Electricals Limited (BHEL).