BHEL share price rallies 5% on huge volume; nears record high

The strong capex cycle in the thermal power sector propelled the company's order book and execution. In addition, the management has focused on structurally favourable terms in the orders, says Ind-RA

BHEL share price movement

 

Bharat Heavy Electricals (BHEL) share price moved higher by 5 per cent to ₹438 on the BSE in Thursday’s intra-day deals in an otherwise weak market on healthy demand revival in the power segment. That apart, analysts attribute the stock outperformance to an improvement in execution pace, which is likely to continue in near-to-medium term. The stock price of the state-owned heavy electrical equipment company quoted close to its record high of ₹446.75 touched on July 17, 2026.

 

At 11:58 AM, BHEL traded 4.3 per cent higher at ₹433.10, compared to a 0.28 per cent decline in the BSE Sensex. A combined 14.1 million equity shares changed hands on the NSE and BSE.

 

 

BHEL – overview, outlook

 

BHEL is engaged in the design, engineering, manufacture, construction and testing of a wide range of products and services for power plants, transmission systems, transportation works, renewable energy units, oil and gas facilities, and defence services.

 

On August 11, 2026, India Ratings and Research (Ind-Ra) upgraded BHE) and its bank loan facilities’ long-term rating to ‘IND AA’ from ‘IND AA-’, with a Stable Outlook, while affirming the short-term debt rating at ‘IND A1+’. 

 

The rating upgrade reflected the significant increase in the company’s execution pace during Q4FY26-Q1FY27, resulting in a substantial increase in the revenue; this enabled BHEL to generate above-Ind-Ra-estimated earnings before interest, taxes, depreciation, and amortization (EBITDA) in the given period.

 

Ind-Ra noted that the strong capex cycle in the thermal power sector propelled the company’s order book and execution. In addition, the management focused on structurally favourable terms in the orders including a) price variation clause for the entire new order book for protecting the gross margins; b) significant improvement in the working capital terms including advances and significant payments on material supply, along with shorter payment milestones and lower retention money, which are together expected to ease out the working capital lock-up over the long gestation orders.

 

BHEL’s order book rose sharply to ₹2.60 trillion by Q1FY27, primarily driven by large order wins in the power sector. In Q1FY27, order inflows increased to ₹26,700 crore. This growth in order book improved BHEL’s book-to-bill ratio materially to 7.1x in FY26 (FY25: 6.9x; FY24: 5.5x), providing revenue visibility over the medium term. The order book constituted 80.44 per cent of the power segment order while a smaller portion of 18.15 per cent constituted industrial segment orders. Over the medium term, Ind-Ra said it will monitor the diversification in the order book.

 

Brokerages bullish on BHEL post Q1 results

 

BHEL posted Q1FY27 profit after tax (PAT) of ₹400 crore versus loss of ₹460 crore year-on-year (YoY). This performance marks profit in the first quarter by BHEL after eight financial years. The quarter witnessed a sharp pickup in execution; revenue thus came in at ₹7,700 crore (40 per cent YoY). 

 

The 202bps YoY improvement in gross margin (31 per cent) indicates an increasing share of new orders in execution mix, which fetch higher realisation. EBITDA margin, benefiting from operating leverage, came in at 6.5 per cent (1,634bps YoY), analysts at JM Financial Institutional Securities said in Q1 result update. The brokerage firm said BHEL is among its top 5 picks as the 97GW of the original target for thermal additions now extends to 110GW+. Analysts maintained a 'BUY' rating on BHEL with an unchanged target price of ₹481 valuing the stock at 30x Sep’28E EPS.

 

Meanwhile, analysts at ICICI Securities expect the revenue and PAT to grow at a compound annual growth rate (CAGR) of 30.5 per cent and 90 per cent over FY26-FY28E. This will also improve return on capital employed (ROCE) from mid-single digit to 16.7 per cent ROCE in FY28E. Hence, analysts said they rate BHEL to buy with fair value of ₹575 (35x FY28E EPS).

 

ICICI Securities believes margins are at the beginning of a structural upcycle, driven by operating leverage as execution accelerates on the ₹2.6 trillion order book, a richer mix of higher-margin businesses such as spares & services, nuclear, defence, transmission and exports, improved project execution and milestone billing leading to lower cost overruns, better fixed-cost absorption with higher manufacturing utilisation, and stronger cash generation reducing working capital costs. 

 

“We expect BHEL to achieve order inflows of over ₹70,000 crore in FY27, supported by a robust pipeline across thermal power, nuclear, transmission, defence and industrial businesses and EBITDA margin to expand from 6.9 per cent in FY26 to 11.5 per cent by FY28E,” the brokerage firm said.

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