BHEL shares gain post-Q2 results; brokerages weigh in—Check out targets

BHEL Share Price: Shares of Bharat Heavy Electricals Limited (BHEL) surged to nearly 4 per cent in the early hours of trade on Thursday after the company released its financial results for the quarter ended September 2025. As of 11 am, the stock of the Maharatna PSU was trading at Rs 255.15, up by 3.91 per cent from the previous close on BSE.

BHEL Q2 result highlights

BHEL reported a strong set of results for the second quarter. The company’s revenue rose 14.1 per cent year-on-year (YoY) to Rs 7,511.8 crore. Profit after tax (PAT) surged 253.2 per cent to Rs 374.9 crore from Rs 106.2 crore in the previous year.

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EBITDA jumped 111.2 per cent to Rs 580.9 crore, while margins expanded sharply to 7.7 per cent, compared to 4.2 per cent in the same period last year and significantly above estimates of around 3 per cent.

Additionally, BHEL secured fresh orders worth Rs 35,000 crore during the quarter (including Rs 25,992 crore from the power segment), which strengthens its order book to Rs 2.19 lakh crore.

Brokerages' view on BHEL

Morgan Stanley on BHEL

Morgan Stanley maintained its 'overweight' rating on BHEL with a target price of Rs 258, indicating a positive outlook on the stock, which is currently trading around Rs 245.

The brokerage noted that the revenue and EBITDA came in above expectations. However, depreciation and other income were lower than estimates, while interest expenses were higher, slightly offsetting the overall beat.

Segment-wise, the power segment reported a 13 per cent YoY rise in revenue, with a healthy EBIT margin of 10.5 per cent.

Meanwhile, the industry segment posted an 18 per cent YoY revenue growth, with an even stronger EBIT margin of 15.3 per cent.

CLSA on BHEL

CLSA has maintained an 'underperform' rating on BHEL with a target price of Rs 198.

The brokerage noted that BHEL’s operational performance is showing signs of a turnaround after two years of backlog accumulation, with Q2 revenue rising 14 per cent YoY, which helped the company swing to an EBITDA of Rs 5.8 billion compared to a loss in the same quarter last year.

However, CLSA pointed out that the quality of growth was not good, and the improvement was largely driven by non-cash foreign exchange mark-to-market (MTM) gains, raising questions about the sustainability of earnings.

For the first half of FY26, BHEL still reported a net loss, following a steep 114 per cent increase in losses in Q1, while consensus estimates project a full-year PAT of Rs 19 billion.

CLSA highlighted a bright spot of the revival of fossil fuel-based orders, supported by India’s emphasis on energy security, with thermal orders peaking at 22 GW in FY25. Despite this, the brokerage believes BHEL’s valuation looks expensive at 43x FY26 estimated earnings.