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BHEL: Staging a strong comeback

ICICIdirect Research 15 May 2026 DISCLAIMER

Consolidated Q4FY26 Performance :

Q4FY26 performance: Bharat Heavy Electricals Limited reported a strong Q4 FY26 performance with revenue rising 37% YoY to ₹12,310 crore, driven by robust execution, while EBITDA more than doubled to ₹1,753 crore with margin expanding ~498 bps YoY to 14.2% (vs 9.3% in Q4FY25). PAT surged ~154% YoY to ₹1,282.7 crore, reflecting operating leverage and improved project mix. BHEL has added ~2460 MW of thermal capacity during Q4FY26.

Segment-wise:  Power segment revenue stood at ~₹9,510 crore with EBIT of ₹1,869.9 crore (EBIT margin ~19.7% vs 5% YoY), reflecting a significant turnaround, while the Industrial segment reported revenue of ₹2,800.5 crore with EBIT of ₹673 crore (margin ~24%), maintaining stable profitability. For FY26, revenue grew 19% YoY to ~₹33,782 crore, with order inflows of ~₹75,000 crore and a robust order book of ~₹2.4 lakh crore, providing strong multi-year revenue visibility.
Order book : BHEL’s strong order inflow of ~₹75,916 crore in FY26 and a robust outstanding order book of ~₹2.40 lakh crore provides high medium-term revenue visibility across multiple years of execution, with nearly 81% of the order book anchored in the power segment, positioning the company to benefit from India’s renewed thermal capacity additions and infrastructure push.

Execution : BHEL has reported a sharp pickup in execution with FY26 revenue growth of ~19% YoY and Q4 growth of ~37% YoY, indicating transition from order inflow phase to execution phase. Notably, peak execution is likely to be witnessed over FY27–FY28E, as the sizeable order inflows received during FY23–FY24 enter the execution phase.
Thermal opportunity : The order inflow momentum is expected to sustain as the CEA has outlined a thermal capacity addition target of ~97 GW by FY35, with incremental demand from replacement of ~37 GW of ageing thermal plants that will cross 35 years of life by FY32.
Nuclear Power Opportunity: BHEL is a key domestic supplier for India’s PHWR nuclear programme, including steam generators, turbines and reactor equipment. India has announced a major nuclear expansion plan under the “Nuclear Energy Mission for Viksit Bharat” with a dedicated allocation of ₹20,000 crore in Union Budget FY26 for development of Small Modular Reactors (SMRs) and advanced nuclear technologies. The mission targets deployment of at least 5 indigenously developed SMRs by 2033 and scaling India’s nuclear capacity to 100 GW by 2047 versus current ~8 GW levels..

Key New Initiatives : BHEL is actively diversifying beyond thermal power into segments such as railway signaling (Kavach), coal gasification, hydro and industrial EPC, which are expected to provide incremental growth opportunities and reduce dependence on thermal ordering cycle over the long term. Recent order wins in these segments indicate early traction in diversification efforts.
 
We expect revenues and PAT to grow at CAGR of 31% and 86% over FY26-FY28E. and assign BUY rating to BHEL with target price of ₹460.

View our research recommendation on Bharat Heavy Electricals Ltd Also explore more on Research page

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