BHEL regains ₹1 trn market cap; stock rallies 12% in 4 days; here's why

BHEL stock was trading at its highest level since September 2024 and has rallied 26 per cent in the past 12 trading days.

Share price of Bharat Heavy Electricals (BHEL) today

 

Shares of Bharat Heavy Electricals (BHEL) hit a fresh 52-week high of ₹290.75, up 2 per cent on the BSE in Wednesday’s intra-day trade on a healthy business outlook.

 

The stock price of the public sector undertaking (PSU) was trading higher for the fourth straight day, soaring 12 per cent during the period. In the past 12 trading days, the market price of heavy electric equipment company has rallied 26 per cent. The stock now trades at its highest level since September 2024. It had hit a record high of ₹390 on November 7, 2007.

 

BHEL regains ₹1 trillion market capitalisation

 

A sharp rally in the stock price has helped BHEL regain ₹1 trillion market capitalisation today. At 02:10 PM; BHEL’s market capitalisation stood at ₹1 trillion on the BSE, the exchange data shows.

 

Company’s overview, strong business outlook

 

BHEL is one of the largest engineering and manufacturing companies of its kind in India engaged in design, engineering, construction, testing, commissioning and servicing of a wide range of products and services with over 180 product offerings to meet the ever-growing needs of the core sectors of economy. It operates in the Power (~76 per cent revenue mix) and Industrial (~24%) sector largely in India. The company is well placed to gain from the need for building base load thermal coupled with strong revenue visibility in the medium term.

 

In nuclear energy, BHEL is positioned to contribute meaningfully to India's long-term goals, with the national target of 100 GW by 2047 and development of Small Modular Reactors by 2033. The company’s track record in nuclear steam generators and turbine systems supports this strategic direction.

 

In the transmission sector, BHEL secured a major order for High-Voltage Direct Current (HVDC) terminal stations on the Khavda–Nagpur corridor, marking continued growth in its advanced grid portfolio. In parallel, the company signed strategic partnership agreements in rail transportation, renewables, and defence systems to support diversification goals and long-cycle businesses development, BHEL said in its FY25 annual report.

 

Rising domestic consumption, along with the government’s push for manufacturing and infrastructure development is expected to drive the energy demand in the near future. This coupled with thrust on energy security and affordability, is expected to propel the addition of thermal based power which offers reliable base-load generation. The company is working towards catering to this upcoming demand by strengthening EPC capabilities, facilitating vendors, standardizing drawings etc, the company said.

 

BHEL received orders for 21.52 GW of thermal power orders in the power segment over FY24- Q2FY26 and further bid pipeline for thermal projects is estimated at ~30 GW. This translates to an order bid pipeline of roughly ₹2.4 trillion, BHEL being industry leader stands to secure a significant portion of these orders. Going ahead, analysts at ICICI Securities expect order inflow momentum to continue, picking up execution pace, thus the brokerage firm said it has built in order inflows of ₹66,833 crore & ₹49,200 crore in FY26E and FY27E respectively.

 

Good accretion of orders and strong ordering pipeline will keep order inflows strong coupled with strong pick in execution from FY26E onwards. This will also help margins and return ratios to improve meaningfully over the next 2-3 years. Hence, analysts rate the stock as 'BUY' with fair value of ₹310 (30x FY27E EPS).

 

Analysts at Nuvama Institutional Equities also retained ‘BUY’ rating on BHEL with a target price of ₹353 per share. The brokerage firm expects FY26 to be a clean-up year with legacy low margin projects nearing completion, enabling FY27 margin rebound as new orders gain pace and operating leverage kicks in.

 

The brokerage firm expects EBITDA margins to rebound to 14 per cent by FY27–28E (4.4 per cent as on FY25) on sharp operating leverage benefits ensuing from execution of ₹ 2.2 trillion order book (80 per cent power mix) and another 25–30GW in pipeline over next 18–36 months.