BHEL (BHEL IN) – Q3FY26 Result Update – Soft Q3, all eyes on execution pace – HOLD
Published on 19 Jan 2026
We revise our FY26E/FY27E EPS estimate by -18.9%/-4.3% factoring in slower execution pace amid strong order backlog, normalized provision, and moderate order inflow momentum. BHEL delivered a revenue growth of 16.4% YoY with EBITDA margin expanding by 225bps YoY aided by lower other expenses (vs higher base in Q3FY25) partially offset by decrease in GM. Execution in the Power segment remained slower, translating into ~13% YoY revenue growth despite a healthy Rs1.7trn order backlog, supported by recent Rs66.5bn EPC package win (1×800MW) from NTPC, reinforcing BHEL’s positioning in the thermal space. In contrast, the industry segment continued to deliver strong execution with revenue up 27.4% YoY, driven by accelerating traction across transmission, transportation, oil & gas and defense verticals; however, order inflows in Industry moderated sharply to Rs16.3bn (vs. ~Rs57bn in Q3FY25 on a high base). While near-term challenges around execution intensity persist, a robust pipeline and a gradual shift towards non-Power opportunities with rise in public/private capex, BHEL is well placed for sustained growth. The stock is currently trading at a P/E of 28.2x/20.3x on FY27/28E earnings. We maintain our rating to ‘Hold’ and value a stock at a PE of 22x Sep’27E (same as earlier) with a revised TP of Rs245 (Rs250 earlier).
