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Informist, Tuesday, Oct. 28, 2025

By Akash Mandal

MUMBAI – Brokerages are divided on Bharat Heavy Electrical Ltd.'s bottom line for the September quarter. Three of the four brokerages with an estimate for BHEL'S September quarter earnings expect the company to report a profit, while one expects it to report a loss for the second straight quarter. Two of the brokerages with profit estimates expect the bottom line to more-than-double on year, while one expects it to fall 81% compared to the year-ago period. However, all four brokerages expect the public-sector company's top line to grow 10-16% on year in the reporting quarter on the back of strong order execution in the power and industrial segments.

JM Financial Institutional Securities Pvt. Ltd. and Nuvama Wealth Management Ltd. expect the company to report a net profit of INR 2.15 billion and 2.07 billion, respectively, in the September quarter. This implies a growth of 123% and 114% on year, respectively. Prabhudas Lilladher Pvt. Ltd. expects the company's bottom line to fall 81% on year to INR 179 million. Kotak Securities expects the company to report a net loss of INR 114 million in the September quarter compared to a profit of INR 966.70 million in the corresponding quarter and a loss of INR 4.55 billion in the trailing quarter.

The contrast in the bottom line estimates is likely due to a difference in margin projections for the quarter by the brokerages. While Nuvama expects the company's earnings before interest, tax, depreciation, and amortisation margin will grow 30 basis points on year to 4.5% in the reporting quarter, Prabhudas Lilladher estimates the margin will fall 210 bps to 2.1%. Kotak Securities sees the company's margin at 1.4%, compared to 4.2% it had reported in the year-ago quarter and the negative margin of 9.8% it had reported in the trailing quarter. JM Financial did not provide an estimate on the company's margin.

The company is expected to report a consolidated revenue of INR 75.40 billion in the September quarter, according to an average of estimates of four brokerages. JM Financial, Prabhudas Lilladher, and Kotak Securities all expect the company's revenue to come in at INR 71 billion-INR 73 billion, implying an on-year growth of 8-11%. The lowest estimate among these is INR 71.29 billion by Prabhudas Lilladher. Nuvama is an outlier and expects the company's top line to rise nearly 29% on year to INR 84.83 billion in the reporting quarter.

Most brokerages expect the company's top line growth in Jul-Sept to be driven by strong order execution in the power and industrial segments. During the quarter, BHEL secured two engineering, procurement, and construction orders worth INR 140 billion in the power segment and won a Kavach order in its industrial segment, Prabhudas Lilladher said in its report. Kotak Securities expects the company's revenue from the power segment to start growing on year from the reporting quarter due to "uptick in inventory position seen at the end of June-25." JM Financial expects the company's revenue growth to be driven by a pick-up in execution of a robust order book for the power segment.

The company is expected to report an EBITDA of INR 2.48 billion in the September quarter, according to the average of estimates from four brokerages. BHEL had reported an EBITDA of INR 2.75 billion in the year-ago quarter and an EBITDA loss of INR 5.37 billion in the previous quarter. The highest EBITDA estimate is INR 3.82 billion by Nuvama. The lowest estimate is INR 1.02 billion by Kotak Securities, which expects the company to break even at the EBITDA level at the current pace of order execution despite reporting a loss in the quarter.

The company's EBITDA margin is likely to fall on year in the September quarter due to the high base of the corresponding period, Prabhudas Lilladher said. Nuvama expects margins to be tight in the September and December quarter due to the lingering impact of legacy low-margin projects such as the ones at Patratu in Jharkhand and Ennore in Tamil Nadu. However, the brokerage expects newer projects to enter the sale recognition phase from the March quarter, which will help the company achieve a turnaround in its performance 2026-27 (Apr-Mar).

BHEL will announce its September quarter earnings on Wednesday. The company had reported a net loss of INR 4.55 billion for the June quarter on revenue of INR 54.87 billion. On Tuesday, shares of the company closed 1% higher at INR 237.34 on the National Stock Exchange. The stock is down nearly 1% since the company reported its results for the June quarter on Aug. 6. 

Of the eight brokerage reports on the company available with Informist, five have a 'buy' or equivalent rating on the stock with an average target price of INR 295. One brokerage has a 'hold' rating on the stock while two have a 'sell' rating. 

Following are the Jul-Sept earnings estimates for BHEL based on reports from four broking firms, in descending order of net profit in INR million:

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Edited by Deepshikha Bhardwaj

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