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Informist, Wednesday, Jul. 15, 2026

 

By Afra Abubacker

 

MUMBAI - Bharat Heavy Electricals Ltd. is expected to post a modest year-on-year rise in its top line for the June quarter but brokerages have mixed views on the bottom line. Most brokerages expect the state-owned capital goods maker to post a net profit for the June quarter, driven by improved execution in its power and industrial segments, a healthy order book, and a low base. However, some brokers expect a net loss due to weaker operating leverage. The public sector company has been reporting a net loss for the June quarter for the past seven years. 

 

Three brokerages expect BHEL to post a net profit in a broad range of INR 901 million to INR 3.7 billion, while two expect a net loss in the band of INR 3.38 billion to INR 4.21 billion. BHEL had incurred a net loss of INR 4.55 billion in the year-ago quarter. The public-sector company is a leading power-generating equipment manufacturer and a major supplier of locomotives, transmission equipment, and serves India's defence forces. 

 

BHEL's top line for the reporting June quarter is projected to rise 22% on year to INR 67.01 billion, according to the average of estimates from five brokerages. However, this would still mean a decline of nearly 46% from the trailing quarter. The highest estimate for revenue is INR 76 billion from Nuvama Wealth Management Ltd. and the lowest is INR 60.02 billion from Bank of America Global Research Ltd.

 

Brokerages expect the company to benefit from a pickup in execution in the June quarter. "We rely on an uptick in pace of execution in June, noting weak execution in the first two months of the quarter as per CEA project data," Kotak Institutional Equities Ltd. said. The brokerage expects a 29% on-year growth in revenue supported by improved execution in its power and industrial segments and a low base. It also expects gross margins to stabilise quarter-on-quarter as new projects are included in the execution mix.

 

"We expect employee costs to rise yoy (year-on-year) for the third consecutive quarter, though decline qoq (quarter on quarter)," Kotak said, adding that the March quarter had included base gratuity provisions as per the new wage code.

 

JM Financial Services Ltd. expects BHEL to post net profit for the June quarter after reporting losses for the June quarter for many years. The brokerage has picked BHEL as the top player in the power equipment sector amid improving gross margins, and included it in the top 10 large-cap stocks for the quarter. The brokerage expects BHEL's revenues to grow 20% on year for the June quarter supported by improved sales amid a healthy order book and a shift in execution mix towards new projects. Although Prabhudas Lilladher Capital expects revenues to grow 17% on year, it flagged margin pressures due to weaker operating leverage.

 

During the June quarter, BHEL had announced an aggregate order inflow of INR 233.4 billion, according to Elara Securities. The order inflow included a major INR 210-billion order for an engineering, procurement, and construction package for a supercritical thermal power project in Uttar Pradesh from Meja Urja Nigam Pvt. Ltd.

 

Brokerages also have divergent views on the company's earnings before interest, tax, depreciation, and amortisation for the reporting quarter. Three brokerages expect EBITDA in a broad range of INR 1.27 billion to INR 5.45 billion, while Bank of America Global Research expects an EBITDA loss of INR 2.07 billion.

 

BHEL will declare its June quarter earnings Thursday. The company's execution pace in its power and industrial segment, margin trajectory, order prospects, and working capital management will be monitored by analysts. 

 

At 1412 IST, shares of BHEL traded at INR 415.45 on the National Stock Exchange, up nearly 3% from Tuesday. The stock has risen over 10% since the company reported results for the March quarter on May 4. Of the seven research reports on the company available with Informist, six have a "buy" rating with an average target price of INR 424 per share, while one has a "sell" recommendation at INR 321. 

 

Following are the Apr-Jun earnings estimates for BHEL from five brokerages, in descending order of the estimate for net profit, in INR million:

 

Brokerage firm	Net sales	Net profit	EBITDA
Nuvama Wealth Management Ltd	76,000	3,704	5,452
JM Financial Institutional Securities Pvt Ltd	65,843	901	1,270
Kotak Institutional Equities	70,576	457	1,417
Bank of America global research	60,019	(3,376)	(2,074)
PhillipCapital (India) Pvt Ltd	62,623	(4,205)	--

 

End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Shubhayan Bhattacharya

 

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