Revenue came in at ₹12,310 crore, which, coupled with lower other expenses — down 19 per cent year-on-year — helped drive a 499-basis-point year-on-year rise in operating profit margin to 14.2 per cent. Operating profit grew 110.8 per cent year-on-year to ₹1,750 crore. Net profit rose to ₹1,280 crore and Q4 net profit was boosted by higher other income, up 59 per cent year-on-year.
In FY26, net profit was ₹1,580 crore, a 150 per cent increase over FY25. FY26 revenue was up 19.2 per cent year-on-year to ₹33,780 crore. Adjusted for provision reversals, the Q4FY26 margin was 13.8 per cent and FY26 operating profit margin was 6.4 per cent, with forex gains of ₹430 crore.
Power segment execution stood at ₹9,500 crore, up 54 per cent year-on-year, while segment margin expanded to 19.7 per cent (vs 4.9 per cent year-on-year). The power sector order book stood at ₹1.92 trillion, up 21.8 per cent year-on-year, with an order inflow of ₹30,100 crore in Q4FY26. BHEL is well placed to win future orders given limited competition, with several competitors having quit the sector. The pipeline for thermal plants is promising in the long term.
The industry segment execution was more muted at ₹2,800 crore, flat year-on-year. Segment margin was at 24 per cent, down from 31.3 per cent year-on-year. BHEL reported an industrial sector order book of ₹43,390 crore, up 25 per cent year-on-year, with order inflow in Q4FY26 at ₹5,440 crore, down 89 per cent year-on-year. The pipeline looks promising in transmission, defence and railways.
Order inflows for FY26 dipped 19 per cent on a high base, but the outstanding book is ₹2.4 trillion, which is a huge 7.1 times FY26 sales. Operating cash flow rose 56 per cent year-on-year to ₹11,870 crore due to better working capital management. Net working capital (NWC) for FY26 was 164 days versus 241 days for FY25. Customer advances rose from ₹15,300 crore in FY25 to ₹24,000 crore in FY26. Total debtors (trade receivables plus contract assets) stand at 463 days versus 494 days in March 2025.
BHEL may sustain order inflows of ₹60,000 crore–₹70,000 crore in both FY27 and FY28, which is roughly twice the reported FY26 revenue. Revenue visibility is not an issue, but execution and provisions become key monitorables with this high and mounting backlog.
BHEL commissioned or synchronised 8.9 GW of power capacity in FY26, with around 6 per cent from exports. Most low-margin orders have been delivered, with a little spillover left. Hence, FY27 should see higher margins and improved cash flow generation. Analysts may revise FY27 upwards accordingly.
The bull case is that there is a large thermal power order pipeline with few competitors and, going forward, margins are improving. The move into railways, defence, green hydrogen, coal gasification, and the profitable spares and services business all look like positives. But execution pace could be a question mark. Balance sheet health is a monitorable as well.
The uptick in execution will reflect in cash flows and BHEL could have a new opportunity in coal gasification. But a large part of the margin expansion is driven by provision write-backs and unrealised forex gains, and flat receivables year-on-year. And order inflows for FY26 were lower.
Most analysts are upgrading target price assumptions, but some are issuing sell/reduce signals despite allowing for earnings upgrades. The stock has gained in the recent past and valuations are in the range of price-to-earnings of 40 times expected FY27 earnings, which is on the higher side.
 "Bharat Heavy Electricals Ltd, BHEL")