Bharat Heavy Electricals Ltd (BHEL) witnessed a strong rally in early trading on Wednesday, with shares surging nearly 4.75% to Rs 196.50, pushing its market capitalization beyond Rs 68,000 crore. This surge came after the state-run capital goods giant posted a solid performance in Q3FY25. However, analysts remain divided on the stock’s future prospects.
How Did BHEL Perform in Q3FY25?
BHEL reported a 124.5% YoY rise in its consolidated net profit, reaching Rs 134.7 crore, compared to Rs 60 crore in Q3FY24. The company’s revenue from operations also saw a significant jump of 32.3% YoY, reaching Rs 7,277.1 crore from Rs 5,504 crore a year ago.
Key financial highlights:
- EBITDA grew 40% YoY to Rs 304 crore
- EBITDA margin expanded by 30 basis points YoY to 4.2%
- Order inflow surged 167% YoY to Rs 6,860 crore
- Order book expanded 47% YoY to Rs 1.6 lakh crore
What Are Analysts Saying About BHEL’s Future?
Despite strong revenue growth, profitability concerns have divided brokerage firms.
Antique Stock Broking:
- Sees FY26 performance improving significantly due to better-margin orders
- Expects a major ordering cycle reversal in the next 3-4 years
- Rating: Buy
- Revised target: Rs 300 (from Rs 364 earlier)
Kotak Institutional Equities:
- Notes that gross margin volatility and rising expenses affected overall performance
- Predicts the power sector’s order inflow will be tested in coming years
- Rating: Sell
- Revised fair value: Rs 115 (from Rs 110 earlier)
Morgan Stanley:
- Maintains an overweight rating due to standalone revenue exceeding expectations by 5%
- Target price: Rs 325
CLSA:
- Retains an underperform rating due to concerns over profitability
- Target price: Rs 166
What Is BHEL’s Stock Trend & Future Outlook?
BHEL’s stock saw a 45% decline from its 52-week high of Rs 335.40 in July 2024, hitting a 52-week low of Rs 185.20. However, analysts suggest that FY26 could mark a turnaround as high-margin orders start execution.
Investors are watching BHEL closely for:
- Improved execution rates in upcoming quarters
- Order finalizations in the industrial sector
- Better financial discipline to sustain growth momentum
FAQs
Why did BHEL shares surge in early trading?
BHEL reported strong revenue growth and order book expansion in Q3FY25, leading to investor optimism.
What was BHEL’s net profit growth in Q3FY25?
The company’s net profit surged 124.5% YoY, reaching Rs 134.7 crore.
What is BHEL’s latest order book value?
As of Q3FY25, BHEL’s order book stands at Rs 1.6 lakh crore, reflecting a 47% YoY growth.
What is the revised target price for BHEL?
Analysts have revised their target prices:
- Antique Stock Broking: Rs 300
- Morgan Stanley: Rs 325
- Kotak Institutional Equities: Rs 115
- CLSA: Rs 166
Is BHEL a good buy after Q3 results?
Brokerage firms remain divided. Some recommend a buy due to strong order inflows, while others highlight profitability concerns.
How much has BHEL’s stock fallen from its 52-week high?
BHEL’s stock has fallen nearly 45% from its peak of Rs 335.40 in July 2024.
What is the outlook for BHEL in FY26?
Analysts expect profitability to improve as high-margin orders enter execution, driving future growth.
BHEL’s Q3FY25 results showcase robust revenue growth, but concerns around profitability and operational margins persist. The stock remains under watch as analysts debate its long-term potential. Investors should evaluate updated targets and market conditions before making any decisions.
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