BHEL soars 4%, trades higher for 4th straight day; here's why

Analysts expect limited impact on BHEL from the government's move to allow four Chinese electrical equipment companies to participate in PSU tenders for HV transformers and GIS equipment.

Bharat Heavy Electricals Limited (BHEL) share price movement

 

Shares of Bharat Heavy Electricals Limited (BHEL) moved higher by 4 per cent to ₹411.80 on the BSE in Monday’s intra-day trade owing to a healthy business outlook. The stock price of the public sector undertaking (PSU) company quoted higher for the fourth straight trading day, rallying 9 per cent during the period. It hit a record high of ₹424.85 on May 29, 2026.

 

At 11:50 AM on Monday, BHEL traded 3.6 per cent higher at ₹409.35, as compared to 0.24 per cent decline in the BSE Sensex. The average trading volume at the counter jumped 1.5 times with a combined 10.26 million equity shares changing hands on the NSE and BSE.

 

 

BHEL – business outlook

 

The renewed emphasis on energy security, following recent geopolitical disruptions, has reinforced the role of coal-based generation in national planning. With policy makers envisaging thermal capacity of 315 GW by 2035-36 to meet the needs of a growing economy, robust thermal power ordering have enabled BHEL to leverage its engineering strength, manufacturing capability and execution expertise, the company said in its FY26 annual report released on June 10, 2026.

 

At the same time, the company’s order book was also moving beyond conventional thermal, with diversified and growth businesses such as transmission, rail transportation, coal gasification, defence, industrial products and international business contributing about 29 per cent of the financial year 2025-26 (FY26) order inflows, and having a similar share in the outstanding order book carried forward into FY 2026-27.

 

Nuclear energy is set to play a pivotal role in India’s energy security and decarbonisation journey. The SHANTI Act reforms are expected to support the sector’s growth towards the national objective of 100 GW nuclear power capacities by 2047. Backed by decades of proven expertise, BHEL is well positioned to capitalise on this opportunity, while actively supporting the development of Bharat Small Modular Reactors and other emerging nuclear technologies, the company said.

 

The growing penetration of renewable energy is creating a strong need for grid-balancing solutions. The government’s roadmap for 100 GW of Pumped Storage Projects by 2035-36 opens a substantial growth avenue for BHEL and reinforces its role in supporting the country’s energy transition.

 

BHEL made a strategic foray into the coal gasification sector through the coal-to-2,000 TPD Ammonium Nitrate project from Bharat Coal Gasification and Chemicals Ltd. Supported by the Government of India’s ₹37,500 crore coal and lignite gasification initiative, this emerging sector offers a substantial growth opportunity for the company.

 

Transmission infrastructure will play a crucial role in reliable integration of renewable energy into the grid. With two HVDC terminal station orders under implementation, BHEL is well placed to support long-distance transmission of renewable power to load centres. 

 

With manufacturing of 80 Vande Bharat train sets underway, BHEL also received its maiden order for development of Kavach signaling system on an identified route of the South Western Railway, marking a significant step towards diversification in the rail signaling segment, the company said.  Check Q1 Results Today 

JM Financial Institutional Securities reiterate BUY on stock with TP ₹435

 

Analysts at JM Financial Institutional Securities expect BHEL to report revenue of ₹6,600 crore (+20 per cent year-on-year (YoY)) with earnings before interest, taxes, depreciation, and amortization (EBITDA) margin of minimum 1.9 per cent (+1,172bps YoY) and profitability in June 2026 quarter (Q1) after losses in first quarters in the previous eight years. 

 

The government has allowed four Chinese electrical equipment companies to participate in PSU tenders for high voltage (HV) transformers and Gas-Insulated Switchgear (GIS) equipment, which, analysts expect, will have limited impact on BHEL. 

 

The Defence Acquisition Council approved a Land Based Testing Facility (LBTF) for electric propulsion systems for Indian naval assets, where BHEL could emerge as a key beneficiary given its rich and relevant experience. Further, CRISIL upgraded BHEL’s long-term credit rating to AA/Stable from AA-/Stable, citing its strong order book, improving profitability, and stronger balance sheet, the brokerage firm said.

 

Analysts estimate BHEL’s revenue/EBITDA/PAT to grow at an FY26–28 compound annual growth rate (CAGR) of 21 per cent/57 per cent/71 per cent. They continue to value the stock at 32x FY28 EPS with an unchanged target price of ₹435 and reiterate BUY on dips.  ============================================  Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.