The curbs were imposed in 2020 after the Galwan Valley border skirmish and required Chinese bidders to register with a government committee and obtain political and security clearances. Other stocks in the space, such as ABB India, Siemens, and Larsen & Toubro, also fell in the range of 3–5 per cent.
Despite Thursday’s correction, BHEL has gained about 26 per cent over the past year. The company is set to declare its third-quarter (October–December/Q3) 2025-26 (FY26) results on January 19.
As of September 30, 2025, BHEL’s total outstanding order book stood at ₹2.19 trillion. Of this, ₹1.75 trillion, or about 80 per cent, was from the power sector, with the remaining ₹44,545 crore from the industrial segment, including exports.
Rising domestic consumption, along with the government’s push for manufacturing and infrastructure development, is expected to drive energy demand in the near term. This, coupled with the thrust on energy security and affordability, is likely to speed up the addition of thermal-based power capacity, which offers reliable base-load generation.
BHEL is positioning itself to meet this demand by strengthening its engineering, procurement, and construction capabilities, facilitating vendors and standardising drawings, the company said.
Analysts at JM Financial Institutional Equities remain optimistic about BHEL’s execution and margin outlook. They maintain a ‘buy’ rating on the stock with a target price of ₹363, based on a valuation rollover to March 2028 earnings per share.
Renewable intermittency, limited utility-scale storage capacity (currently less than 5 gigawatt/Gw) and rising evening peak demand make thermal generation critical for maintaining grid frequency and stability, and ensuring uninterrupted supply.
According to the brokerage, India has 220 Gw of coal-fired capacity, which is targeted to rise to 300 Gw by 2035. About 40 Gw is under construction, 23 Gw has been recently awarded, and 17 Gw is at the tendering stage. India will require coal-fired capacity of 340 Gw by 2047E, implying a net addition of 40 Gw by 2047.
Since around 50 Gw of plants — mostly sub-critical units with higher costs and emissions — are expected to exhaust their useful life by 2035, and another 88 Gw by 2047, India would require an additional 170–180 Gw of new projects merely to maintain its installed base of 340 Gw by 2047.
Further, a likely miss on the ‘100 Gw nuclear by 2047’ target could push up thermal power addition targets. That said, any scalable success in renewable energy plus storage as base load could alter the outlook for coal demand, analysts said in a company update.
Meanwhile, India’s ongoing capital expenditure (capex) supercycle remains largely public capex- and policy-driven, while private capex is confined to select new-age areas such as renewable and thermal power generation, transmission and distribution, aerospace and defence, railways, electronics, data centres and green hydrogen.
Analysts at InCred Equities believe premium valuations are selectively justified for companies and sectors showing strong order inflows and profit delivery.
Analysts at ICICI Securities expect BHEL’s FY26E order inflows to exceed ₹90,000 crore, as the company has already announced inflows of ₹35,300 crore and is the L1 bidder for projects worth about ₹40,000 crore. The brokerage said the earlier execution slowdown was due to teething issues at newly built facilities, which are now being resolved. It expects a sharp execution ramp-up in 2026-27. The unawarded pipeline remains strong at around 20 Gw.
Moreover, India may need additional coal and nuclear plants, given the retirement of ageing coal-based units, to meet base-load demand. Overall, analysts see improving fundamentals and have reiterated a ‘buy’ rating with a revised target price of ₹370.
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