41% of the 17 analysts who have coverage on state-run Bharat Heavy Electricals Ltd. (BHEL) have a “buy” recommendation on the stock. This is the highest level of “buy” recommendations for the PSU dating back to 2011.
Seven out of those 17 analysts have a “buy” rating on BHEL, while eight of them still have a “sell” recommendation. Two others have a “hold” rating.
BHEL reported its December quarter results after market hours on Tuesday, January 28, where its revenue went up by 32% from last year aided by better execution in the Power & Industry segment.
However, margin expansion was below expectations despite Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) growing by 41% year-on-year. The subdued margin expansion was due to a jump in other expenses. In fact, BHEL’s EBITDA too missed expectations despite the 41% jump.
Calculated order inflow during the quarter stood at ₹6,860 crore, which was a growth of 167% from last year, while the company’s order book stood at ₹1.6 lakh crore.
Brokerage firm CLSA maintained its “reduce” rating on the stock and cut its price target to ₹166 from ₹205 earlier, calling the stock “expensive” at 34 times financial year 2026 price-to-earnings.
CLSA wrote that the key catalyst for BHEL’s re-rating was its inclusion in the global passive indices and that has passed.
With L&T entering the thermal power equipment business, BHEL’s market dominance is also under question, CLSA wrote in its note, while cutting its financial year 2025-2027 Earnings Per Share (EPS) estimates by 3% to 8% to factor in weak margins.
On the flip side, Morgan Stanley has an “overweight” rating on BHEL with a price target of ₹352, more than double of CLSA.
The brokerage said that BHEL’s standalone revenue was above their estimates, as was the company’s EBITDA and adjusted profit.
Shares of BHEL ended 3.7% lower on Tuesday at ₹187.4. The PSU stock has corrected 45% from its recent peak of ₹335.
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