BHEL shares up 3% amid heavy volume on strong Q2 show; time to buy or hold?

BHEL has rallied 10% in the last four trading sessions. Analysts at ICICI Securities believe that the company needs to ramp up execution to charter robust growth over the medium term.

Share price of Bharat Heavy Electricals (BHEL) today

 

Shares of Bharat Heavy Electricals (BHEL) rallied 3 per cent to ₹254.45 on the BSE in Thursday’s intra-day trade amid heavy volumes in an otherwise weak market on strong September 2025 quarter (Q2FY26) results. 

 

The stock price of the state-owned heavy electrical equipment company was quoting higher for the fourth straight trading day, surging 10 per cent during the period. It had hit a 52-week high of ₹272 on June 30, 2025. 

 

The average trading volume at the counter jumped nearly five-fold. Till 10:04 AM; a combined 26.78 million equity shares of BHEL changed hands on the NSE and BSE. In comparison, the BSE Sensex was down 0.45 per cent at 84,614.

 

BHEL posts strong Q2 results, healthy order book position

 

BHEL reported strong Q2FY26 results turning profitable. The company’s revenues grew 14 per cent year-on-year (YoY) to ₹7,512 crore. With a drop in Employee benefits and other expenses by 260 and 310 bps YoY, EBITDA more-than-doubled to ₹580 crore vs ₹275 crore last year. With operational performance and rise in other income, profit after tax grew 3.5 times YoY to ₹368 crore vs ₹97 crore last year. 

 

BHEL received orders worth ₹35,375 crore during the quarter, taking the total order book to ₹2.2 trillion, 80 per cent or ₹1.75 trillion of order book from power segment and rest is Industry segment including exports.

 

The company received a maiden order for the Kavach system fromIndian Railways for design, development and installation of KAVACH equipment, in locomotives and at trackside locations on a 36 km section of the SW Railways.  ALSO READ | Vodafone Idea shares plunge 12% amid fresh uncertainties in AGR relief

ICICI Securities view on BHEL

 

BHEL has secured a healthy orderbook (book to bill ~8), the company needs to ramp up execution to charter robust growth over the medium term. The drop in other expenses and employee cost rationalisation is a positive, implying legacy orders are a concern of the past, dismaying concerns of continued significant other expenses to drive losses during the year, ICICI Securities said in a note.

Crisil Ratings rationale on BHEL

 

In August, Crisil Ratings revised its outlook on the long-term bank facilities of BHEL to ‘Stable’ from ‘Negative’.

 

The outlook revision reflects the improvement in the business risk profile of the company, marked by growing revenue and profitability, supported by its market leadership position in the boiler turbine generator (BTG) space, which resulted in one of the highest outstanding order books of ₹ 1.96 trillion at the end of fiscal 2025, providing healthy revenue visibility over the medium term. 

 

Further orders from critical sectors, such as railways and defense, and completing orders of legacy projects, have strengthened the overall quality of the order book. BHEL's focus on increased execution and timely delivery of projects will lead to healthy revenue growth over the medium term, the rating agency said in rationale.  ALSO READ | PB Fintech share zooms 5% on robust Q2 insurance growth; buy, sell or hold? 

Along with a leading position in the thermal power segment, BHEL has diversified into other areas such as hydropower, nuclear power, power transmission, defence, rail transportation, which will drive growth of the company in the long run.

 

The industry orders included orders from defence, railways (supply of 80 Vande Bharat trains with sleeper coaches) and high voltage power evacuation projects. The company is also working on a coal gasification project with Coal India and has already formed a JV with Coal India for production of ammonium nitrate which if achieved, will have opportunity for substantial orders in the long term. The growing order book, along with better pricing flexibility and payment terms in the newer contracts, will support the operating margin and working capital cycle over the medium term, said Crisil Ratings in its rationale.