Shares of ) extended gains for the second consecutive session after reporting a strong March quarter performance, rising nearly 3 per cent in early trade to ₹388.40 on the NSE from the previous close of ₹377.05. The stock has been reacting positively to a sharp jump in profitability, healthy order inflows, improved cash flows and margin expansion, reinforcing investor confidence in the company’s turnaround story.
The rally follows BHEL’s strong Q4FY26 earnings, which helped the stock hit a 52-week high of ₹399 in the previous session. The company reported standalone net profit of ₹1,282.68 crore for the quarter ended March 2026, compared with ₹504.05 crore in the same period last year, reflecting a sharp y-o-y increase. For FY26, profit after tax climbed to ₹1,577.95 crore from ₹512.97 crore in the year-ago period. The board also recommended a final dividend of ₹1.40 per share.
Operational performance remained strong during the quarter. JM Financial noted BHEL reported consolidated revenue of ₹12,300 crore in Q4FY26, up 37 per cent y-o-y and ahead of estimates. Gross margin expanded 100 basis points y-o-y to 34.8 per cent, while EBITDA margin came in at 14.2 per cent versus 9.2 per cent a year ago.
Excluding estimated forex gains and provisions, EBITDA margin stood at around 12.6 per cent, indicating underlying operational improvement. Operating cash flow rose sharply to ₹5,800 crore from ₹2,200 crore, supported by better working capital management. The company booked orders worth ₹75,900 crore during FY26, taking its total order book to ₹2,40,000 crore.
Brokerages remained divided on the stock. Kotak Securities maintained its sell rating with a target price of ₹140, while acknowledging strong execution, margin expansion, stable receivables supporting cash flows and opportunities in coal gasification.
Morgan Stanley retained its overweight rating with a target price of ₹444, saying BHEL’s turnaround remains intact, backed by improving macro positioning and potential for further upside surprises.
JM Financial reiterated its buy rating and raised its target price to ₹435 from ₹393, citing stronger gross margins, higher interest income due to better operating cash flow and sustained order inflow visibility of ₹60,000 crore to ₹70,000 crore annually in FY27 and FY28.
CLSA, however, remained cautious on the stock. It maintained an Underperform rating with a target price of ₹282, citing expensive valuations at around 51x FY27 earnings. CLSA noted that while FY26 revenue growth was strong at 19 per cent y-o-y and EBITDA margin improved to 6.9 per cent, margin expansion was largely driven by lower provisions and foreign exchange gains. The brokerage also flagged weak core gross margins as a sign of poor-quality growth, adding that while BHEL has been rerated on the energy theme, fresh order triggers remain limited.