BHEL (BHEL IN) – Management Meet Update – Gradual execution ramp-up of new orders in sight – HOLD
Published on 09 Dec 2025
We interacted with the management of Bharat Heavy Electricals Ltd (BHEL) to discuss the company’s execution trajectory, tendering pipeline, and overall business outlook. BHEL expects to sustain strong order intake momentum, supported by a robust pipeline across thermal, HVDC, railways and renewable energy segments. Further, it anticipates delivering ~9GW in FY26, broadly flat YoY, and expects the sizable orders secured over the past 2 years (~Rs1.7trn), with a state regulatory approval window of 1.5–2 years, to transition to execution from FY27, indicating medium-term execution ramp-up. The company is undertaking capacity enhancement and debottlenecking initiatives, including increasing thermal manufacturing capacity from 10GW to 12GW per annum and scaling up electrical equipment capabilities. We believe these initiatives, combined with higher execution, should provide operating leverage and support margin expansion. Moreover, improving receivable quality, better advances from NTPC, and systematic closure of legacy projects are expected to improve BHEL’s working capital position. The stock is currently trading at P/E of 27.7x/20.8x on FY27/28E earnings. We maintain our ‘HOLD’ rating valuing the stock at PE of 22x Sep’27E (same as earlier) with TP of Rs250 (same as earlier).
