State-run capital goods giant Bharat Heavy Electricals Ltd (BHEL) is slated to release its financial results for the quarter ending June 2026 on Thursday, July 16. The announcement comes as BHEL shares recently touched a 52-week high of Rs 426.15, marking a remarkable 105% gain from its 52-week low of Rs 205.20 recorded on August 29, 2025.
Q1 FY27 Revenue Growth Expected
Analysts largely foresee a robust year-on-year (YoY) revenue increase for BHEL in the June 2026 quarter. This growth is primarily attributed to enhanced execution across its crucial power and industrial segments, alongside a noticeable acceleration in project activities during June. Kotak Institutional Equities projects BHEL's revenue at Rs 7,057.6 crore, a 28.6% YoY improvement, while Antique Stock Broking estimates Rs 6,801.8 crore, up 24% YoY. PL Capital offers a slightly more conservative forecast of Rs 6,437.8 crore, representing a 17.3% YoY rise.
Profitability Concerns Amidst Operating Leverage
Despite the positive revenue outlook, profitability is expected to face significant pressure sequentially. Analysts point to weaker operating leverage, which is likely to result in a sharp contraction in EBITDA margins and earnings. Kotak Institutional Equities predicts EBITDA at Rs 141.7 crore, a substantial 91.9% sequential fall, with margins shrinking to 2%. Similarly, Antique Stock Broking forecasts EBITDA at Rs 158.6 crore, down 91% sequentially. PL Capital even anticipates an EBITDA loss of Rs 115.9 crore, with margins falling to 5.3%.
The impact of new projects beginning execution within the quarter is expected to stabilize gross margins sequentially, according to Kotak. However, the overall weak operating leverage from the initial two months of the quarter, as per CEA project data, remains a concern for earnings.
Key Monitorables for Investors
Investors will be closely watching several critical factors in BHEL's upcoming results:
- Execution Momentum: The pace of project completion in both power and industrial segments.
- Fresh Order Inflows: New contracts secured, building on the Rs 23,340 crore order intake announced earlier, which included a significant Rs 21,000 crore EPC package from Meja Urja Nigam.
- Power Segment Progress: Developments and performance within this core business area.
- Working Capital Management: Efficiency in managing the company's short-term assets and liabilities.
- Order Prospects: The company's outlook and pipeline for future orders in the coming quarters.
Analyst Ratings and Target Prices
Analyst sentiment on BHEL shares is mixed ahead of the results:
- Antique Stock Broking: Maintains a 'buy' rating with a target price of Rs 430.
- PL Capital: Holds a 'reduce' rating, setting a target price of Rs 321.
- Kotak Institutional Equities: Has a 'sell' rating with a target price of Rs 120 per share.
These varied target prices reflect differing views on BHEL's long-term prospects, particularly concerning its ability to convert revenue growth into sustainable profitability amidst operational challenges.