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Informist, Tuesday, Aug. 5, 2025

By Shakshi Jain

NEW DELHI – State-owned capital goods major Bharat Heavy Electricals Ltd. is expected to turn in a profit in the June quarter, driven by a healthy order book and executions in both the power and industrial segments. Besides higher sales and a better order mix, some operating leverage is also expected to add to the company's bottom line for the quarter, according to analysts tracking the company.

BHEL is expected to post a net profit of INR 510.75 million for the June quarter, according to the average of estimates from four brokerages. At INR 510.75 million, it would be the company's lowest bottom line in four consecutive quarters. The public sector company had incurred a net loss of INR 2.13 billion in the year-ago quarter. Sequentially, the company is expected to report a near 90% decline in its bottom line for the June quarter. The highest estimate for net profit is INR 1.14 billion by Nuvama Wealth Management Ltd. and the lowest is INR 186 million by Kotak Institutional Equities.

BHEL's top line in the reporting quarter is projected to rise almost 22% on year to INR 66.87 billion, as per consensus estimates. However, sequentially, it means a decline of more than 25%. The highest estimate for revenue is INR 70.52 billion by Kotak Institutional Equities and the lowest is INR 62.83 billion by Nuvama.

In the March quarter, BHEL's net profit had risen just over 4% on year to INR 5.04 billion. Sequentially, the bottom line was up more than 300%. In the March quarter, the Maharatna company's top line had risen almost 9% on year and over 23% sequentially to INR 89.93 billion.

BHEL is expected to report a better performance for the June quarter on higher dispatches and operating leverage, JM Financial said in a report. Kotak Institutional Equities said given the flat year-on-year print in the power segment in Jan-Mar, it expects deferral of execution to Apr-Jun.

BHEL is expected to post earnings before interest, tax, depreciation, and amortisation of INR 1.92 billion for the June quarter, according to the average of estimates from four brokerages. The estimates for EBITDA range from INR 1.48 billion by Kotak Institutional Equities to INR 2.51 billion by Nuvama. Kotak Institutional Equities said it expects the company's gross margin in the June quarter to have improved by 40 basis points on quarter.

BHEL will declare its June quarter earnings Wednesday. The company's pace of execution in its power segment, order prospects, and working capital management are key areas to be monitored, Prabhudas Lilladher Institutional Equities said in a report.

Tuesday, shares of BHEL ended at INR 248.25 on the National Stock Exchange, up 2.8% from the previous close. The stock is down nearly 1% since the company reported its results for the March quarter. It is also down almost 19% from its 52-week high of INR 305.8, reached on Aug. 9.

Of the seven research reports on the company available with Informist, five have a ‘buy' rating on BHEL, while one each has a ‘hold' and ‘sell' recommendation. The average target price for the buy ratings is INR 307.

Following are the Apr-Jun earnings estimates for BHEL based on reports from four brokerage firms in descending order by the estimate of net profit (in million):

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Edited by Saji George Titus

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