Bharat Heavy Electricals (BHEL) – Analyzed

Key Points

• BHEL’s rating upgraded to ‘Buy’ with a target of ₹370.
• Significant order inflow jump: ₹92,300 crore in FY25 expected.
• Execution ramp-up starts in FY27, solving past problems.
• Diversified portfolio – Non-thermal orders drive growth.
• Nuclear build-up and coal capacity targets boost demand.
• Strong order book of ₹2.4 trillion offers revenue visibility.

BHEL’s Strong Outlook

ICICI Securities has raised its ‘Buy’ rating for Bharat Heavy Electricals (BHEL), now targeting a price of ₹370. This upgrade is based on a remarkable improvement in the company’s financial situation. The key driver behind this optimism is a dramatic increase in the amount of new business BHEL is securing.

For the past three years, BHEL has been winning a huge number of orders – about ₹21,000 crore on average between FY19 and FY23. Then, in FY24 and FY25, they jumped to a staggering ₹80,000 crore and ₹92,300 crore respectively. Experts predict this trend will continue into FY26 with over ₹90,000 crore in orders. This big increase is partly because BHEL already has a lot of orders placed – around ₹35,300-41,000 crore in the first half of FY26.

Furthermore, BHEL is the winner (L1 bidder) for two large projects worth approximately ₹40,000 crore. As a result, analysts believe BHEL will have an order book of around ₹2.4 trillion by the end of FY26. This means they have a lot of work lined up, allowing for reliable revenue projections for the next few years.

However, previously BHEL faced difficulties turning orders into actual revenue because of problems at new construction sites. These issues are now being fixed, and a faster pace of work – called “execution ramp-up” – is expected to begin in the second half of FY26, with a big improvement expected in FY27. Most of the current orders are for building power plants that burn coal, so it’s very important that these projects are completed successfully to help BHEL grow.

BHEL is also getting business in areas besides coal, like building transmission lines and getting orders from industries. They’ve won a lot of money – over ₹15,000 crore each year – from these types of projects. In the first half of FY26 alone, they got orders worth ₹93,000 crore, and they’re the top bidder (L1) for another project worth ₹4,000 crore. This makes BHEL’s business more diverse and helps them grow even if coal power use changes.

Another exciting opportunity for BHEL is building nuclear power plants. India wants to build a lot of nuclear power plants by 2047, with a target of 100GW of capacity. This means BHEL could get a big boost from this work. They also have chances to build railways, make gasification plants, and work on projects for the defense industry and for storing water using pumped storage.

The government is planning to add more power plants to ensure India has enough electricity. NTPC wants to build over 13GW of new power plants between 2032 and 2037. Also, a group called NITI Aayog is thinking about increasing India’s coal power capacity to 420GW by 2047. Because of these plans, BHEL is in a good position to succeed.

Because of all this, BHEL is expected to continue growing for many years to come.

“BHEL’s strong order backlog and government support provide a solid foundation for long-term growth.”