Bharat Heavy Electricals (BHEL) shares climbed more than 4% on Thursday after the company reported a sharp turnaround in its June quarter earnings, with revenue, profit and operating margin surpassing Bloomberg consensus estimates. The stock hit the day's high after the company posted a consolidated net profit of ₹376.71 crore for the quarter ended 30 June, compared with a net loss of ₹455.50 crore in the corresponding period last year. Revenue from operations rose 40.3% year-on-year to ₹7,697.72 crore, while EBITDA stood at ₹504 crore with an EBITDA margin of 6.5%. The growth reverses an EBITDA loss of ₹537 crore in the year-ago quarter, demonstrating robust operational performance. However, CLSA notes that margin expansion was aided by 723 basis points lower other expenses and non-cash provisions, along with forex gains, with 56% of the expansion led by lower other expenses and 45% of PAT coming from other income rather than core operations.
The company's financial metrics showed marked improvement across key parameters. As reported by The Economic Times, operating profit margin improved sharply to 6.69% in Q1 FY27, compared to a negative 9.54% in Q1 FY26, while net profit margin rose to 4.89%. The PSU's net worth increased more than 9% year-on-year to ₹26,471 crore during the quarter, with earnings per share (EPS) at ₹1.08. The strong execution capabilities and robust order book of ₹2.6 lakh crore have contributed to the positive investor sentiment. The power business continued to drive growth, with revenue increasing 51.8% year-on-year to ₹5,919.50 crore, while revenue from the industry segment rose 12% to ₹1,778.22 crore. The company's outstanding order book stands at ₹260,255 crore, dominated by power at 81%, with meaningful diversification into non-thermal segments including transportation (₹15,000 crore), transmission (₹14,000 crore), nuclear (₹12,000 crore), coal gasification (₹8,000 crore), and defence (~₹7,000 crore).
Despite the strong quarterly performance, analyst sentiment on the stock remains divided. According to Bloomberg data, nine of the 22 analysts tracking BHEL have a 'Buy' recommendation, while 10 maintain a 'Sell' rating. The remaining analysts have a 'Hold' recommendation. The stock has gained around 50% so far this year, significantly outperforming broader market indices. Nuvama has raised its price target to ₹530 from ₹450 earlier, the second-highest target on the Street, with an upside of 26% from current levels, arguing that the company's margin recovery is now underway with the latest 6.5% EBITDA margin reflecting genuinely improved execution. However, Kotak Institutional Equities carries a 'sell' rating with a target of ₹150, implying a steep downside of 64% from current levels, arguing that operating leverage benefits are being amplified by provisional writebacks rather than structural cost improvement. JPMorgan maintains an 'underweight' rating with a target of ₹220, while Macquarie has raised its target to ₹315 from ₹250 while maintaining its 'neutral' rating.
The stock has delivered exceptional returns across different time horizons. As reported by The Economic Times, BHEL shares are up more than 43% in 2026 so far, with the stock hitting a fresh 52-week high. In the longer term, the company's shares have delivered 67% returns over one year, 336% over three years, and 561% over five years. The stock closed FY26 with consolidated sales of ₹33,782 crore and net profit of ₹1,600 crore, alongside an operating margin of 8%, up from a margin of 5% and net profit of ₹534 crore in FY25. The recent surge of 4.2% to ₹435.75 demonstrates continued market confidence following the strong Q1 results. With a market capitalization of ₹146,908 crore, the shares were trading at ₹422 per share with a 52-week range of ₹446.60 to ₹205, and trading at a P/E of approximately 61x.
