BHEL shares surged to their 52-week high for the second consecutive trading session on Friday, July 17, gaining 2.5% to ₹446.50 compared to ₹435.40 at the previous stock market close, as per NSE data. The PSU defence equipment maker announced its Q1 earnings showing a consolidated net profit of ₹376.71 crore in Q1FY27, marking its first profitable first quarter in eight financial years. Revenue from core operations surged more than 40% to ₹7,698 crore in the first quarter, from ₹5,487 crore in the same period a year earlier, backed by improved performance of power and industry businesses. The stock has been among the standout performers in its index cohort, up 71% over the past year and nearly 49% year-to-date, with total traded volume at 15.70 times the 30-day average and relative strength index at 48.56, indicating robust market participation and strong institutional interest.
State-owned Bharat Heavy Electricals Ltd (BHEL) delivered exceptional financial results for Q1 FY27, with consolidated net profit of ₹376.71 crore in Q1FY27, marking its first profitable first quarter in eight financial years. The company achieved a consolidated net profit of ₹376.71 crore compared to a net loss of ₹455.50 crore in the corresponding quarter of the previous fiscal year, representing a remarkable turnaround. Revenue from operations jumped 40% year-on-year to ₹7,698 crore, while EBITDA margin expanded significantly to 6.5% from 5.2% in the corresponding quarter last year. Power segment revenues advanced 52% YoY to ₹5,919.50 crore, from ₹3,898.86 crore a year earlier, with EBIT margin improving to 10% versus minus 13% a year ago. Industry business revenues gained 12% to ₹1,778 crore compared with ₹1,588 crore in the same period a year ago, with EBIT margin at 14%, lower than 19% a year ago. Collections rose 34% YoY to ₹11,000 crore, leading to lower working capital requirements and financing cost of ₹140 crore during the quarter, compared with ₹200 crore in Q4FY26 and ₹180 crore in Q1FY26. Other income rose 24.5% YoY to ₹230 crore, while the tax rate remained largely unchanged at 25.5%.
BHEL's order book reached a record ₹2.60 trillion, up 27% year-on-year, providing strong multi-year revenue visibility with order inflows remaining robust at ₹26,745 crore during Q1FY27. The order book was led by Power segment at ₹22,625 crore, Industry at ₹1,767 crore and Exports at ₹2,353 crore, driven by marquee thermal, export and diversified business orders. According to Business Standard, the diversified order book of ₹2,60,300 crore provides multi-year visibility as execution now becomes the swing factor, with the company's order book conversion given the 7.2x book-to-bill ratio supporting sustained growth. The diversified order book of ₹2,60,300 crore provides multi-year visibility as execution now becomes the swing factor, with the company's order book conversion given the 7.2x book-to-bill ratio supporting sustained growth. BHEL reported Q1FY27 order inflow of ₹26,700 crore, taking its order book to ₹2.6 lakh crore – 7.2 times trailing-twelve-month sales, with the company having won new orders worth ₹2.7 lakh crore over the last three years. Of the total order book, ₹70,000 crore comes from non-thermal businesses, including nuclear (₹12,000 crore), transmission (₹14,000 crore), defence (₹7,000 crore), transport (₹1,500 crore), coal gasification (₹8,000 crore), hydro (₹5,500 crore), and ₹4,000 crore from spares and services. A revival in private-sector investment in power projects is providing another tailwind, with private projects now accounting for about 28% of BHEL's order book, compared with negligible contribution in FY23.
BHEL secured a significant engineering, procurement and construction (EPC) order from NTPC for the 3x800 MW Meja Super Thermal Power Project (STPP), valued at ₹21,000 crore, to be commissioned in 70 months. The company also signed an export contract worth ₹2,000-2,500 crore with Nigeria's Dangote Petroleum Refinery for eight gas turbines. Working capital requirements have improved significantly, with collections rising 34% YoY to ₹11,000 crore, leading to financing cost reduction to ₹140 crore during the quarter, compared with ₹200 crore in Q4FY26 and ₹180 crore in Q1FY26. At the end of FY26, working capital stood at 164 days and could fall to around 105 days by the end of FY27. BHEL is a major beneficiary of the increased target for thermal capacity addition from 97 GW earlier to more than 110 GW, representing a significant multi-year pipeline. Currently, 39 GW of thermal projects are under construction, while 22 GW have recently been awarded and are yet to begin, with another 35 GW under tendering or planning. NTPC and NALCO have also announced projects with a combined capacity of 15 GW, pushing planned thermal additions to more than 110 GW, with opportunities also available in nuclear and coal gasification.
ICICI Securities has recommended a buy rating on BHEL with a revised target price of ₹520 in its research report dated July 17, 2026, representing an upgrade from their earlier target of ₹450. The brokerage believes this performance was driven by a pick-up in execution of projects won in the new cycle – these have better realisation, with the company having won new orders worth ₹2.7 lakh crore over the last three years. ICICI Securities expects execution to grow at a 13% CAGR over FY26–28 and profitability to improve further on the back of multiple levers, maintaining their BUY rating with the revised target price of ₹520 (40x FY28E earnings). The Power segment (~52% YoY) remained the key growth driver, backed by execution of a healthy order book of ~₹1.9 trillion, with recent order wins including the ₹210 billion EPC award for the 3×800MW Meja thermal power project and BHEL's largest-ever export order (~₹22.5 billion) for generator packages for the Dangote refinery, taking the Power segment order book to ~₹2.1 trillion. The Industrial segment reported ~12% YoY revenue growth, with order inflows of ~₹17.7 billion driven by transmission, O&G and transportation. ICICI Securities maintains its 'BUY' rating given the strong execution momentum and sustained investments in India's power and infrastructure sectors expected to support future growth.
The turnaround faces potential headwinds from increased competition in the transmission sector. The government has allowed four Chinese electrical-equipment companies to participate in public-sector tenders for transmission equipment for two years, as India pushes to expand its transmission network to carry solar power from remote regions to consumption centres amid limited domestic capacity. However, BHEL's shares trade at about 45 times estimated FY27 earnings, according to Bloomberg consensus, reflecting investor confidence in the sustained turnaround. As a larger share of newer, relatively higher-margin private projects enters the revenue recognition phase, BHEL's turnaround shall become more evident H2FY27 onwards, noted Nuvama Institutional Equities. The company is also expanding its product portfolio, recently signing an agreement with the Indian subsidiary of ThyssenKrupp Nucera AG & Co KGaA to manufacture electrolysers for green hydrogen in India. The power segment is not the only source of growth, with BHEL seeing significant build-up of orders in its industry segment, driven by investments in transmission and distribution, railways and defence, with the segment contributing almost one-fourth of revenue and reporting an EBIT margin of 13.7% in Q1, well above the 9.5% margin in power. Balance-sheet health, strong collections to reduce receivables, and momentum in execution are all key monitorables, with the company needing to execute efficiently while improving gross margins and cash flows.
