BHEL shares remain in focus after the company delivered a strong Q4FY26 performance, with profit surging 156 per cent year-on-year and margins expanding sharply.

The upbeat earnings, backed by robust execution and a strong order book, have prompted brokerages to turn positive, with target prices revised higher, indicating potential upside of nearly 20 per cent from current levels.

Brokerages On BHEL

Morgan Stanley on BHEL

• The brokerage maintains 'Overweight' with a target price of Rs 444 versus Rs 304
• Q4 execution, margins and operating cash flow surprised positively
• Brokerage sees improving macro backdrop benefiting thermal power and electrification themes
• Highlights strong INR 2.4tn order book providing seven-year revenue visibility
• Expects margins to improve further as execution accelerates in FY27-28
• Raises FY27/FY28 EPS estimates by 10%/9%
• Target price revised higher after rolling valuation forward and lifting target multiples

Nuvama on BHEL

• The brokerage maintain 'Hold' with a increased target price of Rs 450 versus Rs 353
• GM expanded 100bp YoY to 34.8%, driven by strong execution in the Power segment
• BHEL commissioned/synchronised 8.9GW of power capacity in FY26.
• FY27 to see execution ramp-up from FY25 orders, driving margin expansion and better cash flows as legacy projects close.
• Expects better-priced orders to support GM expansion; operating leverage to lift EBITDA margins alongside improving cash conversion.
• With legacy low-margin projects behind and a Rs 2.4tn backlog, FY27 execution ramp-up should boost profitability and cash flows.

BHEL Q4FY26 Result

Bharat Heavy Electricals Ltd reported a strong set of Q4FY26 results, with net profit surging 156 per cent year-on-year to Rs 1,290 crore compared to Rs 504 crore in the same period last year. Revenue also rose sharply by 36.9 per cent YoY to Rs 12,310 crore from Rs 8,993 crore, driven by improved execution and higher order activity during the quarter.

Operating performance saw significant improvement, with Ebitda jumping 111 per cent YoY to Rs 1,753 crore from Rs 831 crore. Ebitda margins expanded by 500 basis points to 14.2 per cent from 9.2 per cent a year ago, reflecting better operating leverage and cost efficiencies. The company also announced a final dividend of Rs 1.40 per share for FY26, rewarding shareholders after a strong earnings recovery.

Following the robust earnings, BHEL shares rallied sharply in the market, hitting a fresh 52-week high. The stock surged more than 13 per cent to trade around Rs 399 apiece, as investor sentiment turned positive on the back of strong profitability growth and margin expansion.

(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)