Bharat Heavy Electricals Ltd – ₹1.35 Lakh Cr Orders, ₹290 Cr Profits: The Great Indian Engineering Comedy
1. At a Glance
BHEL, India’s “pride of heavy engineering,” is like that cousin who topped school but never figured out adulting. With an order book of ₹1.35 lakh crore, 16 factories, and presence in 90 countries, it should have been minting money. Instead, it delivers wafer-thin margins, debt climbing like a sugar-high toddler, and quarterly losses that make analysts weep.
2. Introduction
Once upon a time, Bharat Heavy Electricals Ltd (BHEL) was India’s answer to GE, Siemens, and Mitsubishi. Set up in 1964, it supplied over half of India’s conventional power equipment. Today, it still brags about that legacy – as if living in 1960s glory will help pay today’s dividends.
The company is a PSU, which means the government owns 63% and investors own the frustration. Its stock has returned 53% in 3 years, but lost 25% in the last year – basically, like a Diwali rocket that soared once and then fizzled into smoke.
BHEL wants to build hydrogen electrolysers, defense gear, and high-speed train engines. But its day job? Still boilers, turbines, and coal projects – the engineering equivalent of selling typewriters in the age of ChatGPT.
The order book is massive, yes. But remember – in PSU land, order inflows don’t always mean order outflows (of cash). Execution delays, receivable fights with state utilities, and bureaucratic red tape ensure that by the time a project completes, the technology is outdated and the client is bankrupt.
3. Business Model – WTF Do They Even Do?
BHEL makes equipment for power plants (thermal, hydro, nuclear, gas), industries, railways, and even defense. Its catalogue reads like a hardware store for governments: steam turbines, generators, transformers, propulsion systems, space batteries, electrolysers.
Power contributes ~79% of revenue – almost all coal-fired boilers and turbines. Industry contributes 21% – locomotives, oil & gas, renewables, defense toys. Export revenue? A meagre 3% now (down from 19% in FY20).
The company has 16 factories, 8 service centres, and more R&D institutes than profits. With over 5,600 IPRs, they innovate on paper – while Chinese and European peers innovate on market share.
In short: BHEL is a PSU shop floor where engineers dream big, accountants cry, and investors pray.
4. Financials Overview
Source table
Metric
Latest Qtr (Jun’25)
YoY Qtr (Jun’24)
Prev Qtr (Mar’25)
YoY %
QoQ %
Revenue
₹5,487 Cr
₹5,485 Cr
₹8,993 Cr
+0.04%
-39.0%
EBITDA
-₹537 Cr
-₹169 Cr
₹832 Cr
Loss ↑
Loss vs. profit
PAT
-₹456 Cr
-₹211 Cr
₹504 Cr
Loss ↑
Loss vs. profit
EPS (₹)
-1.31
-0.61
1.45
Loss ↑
Loss vs. profit
Commentary: Revenue flat, profits vanished, EPS negative. This is not an “earnings season” – it’s a horror season.
5. Valuation – Fair Value Range Only
P/E Method: EPS TTM = ₹0.83. At current P/E of 258, stock looks like a startup, not a PSU. Realistic P/E range for capital goods: 40–80. Fair range = ₹33 – ₹66.
EV/EBITDA: EV = ₹76,291 Cr. EBITDA (TTM) = ₹1,473 Cr. EV/EBITDA = 52x! Fair range 15–25x → ₹22,000–₹37,000 Cr EV → Equity ~₹60–₹100/share.
DCF Rough Cut: With FCF often negative, valuing is like estimating rainfall in the desert. Conservative band: ₹80–₹120.
Fair Value Range: ₹60 – ₹120.
Disclaimer: This fair value range is for educational purposes only and is not investment advice.
6. What’s Cooking – News, Triggers, Drama
Mega Orders: Adani Power (Raipur 2×800 MW), Mirzapur Phase-I
