Bharat Heavy Electricals Ltd Q2FY26 – 1.08 EPS, 253% Profit Surge, and an Order Book So Fat It Needs a Fitness Plan
1. At a Glance
Bharat Heavy Electricals Ltd (BHEL) just dropped its Q2FY26 numbers like a vintage diesel engine revving back to life — noisy, smoky, but somehow moving. The stock sits pretty at ₹245 (as of 29 Oct 2025), giving it a market cap of ₹85,443 crore — not bad for a PSU that spent most of the last decade perfecting the art of surviving near-death experiences.
Revenue this quarter clocked in at ₹7,512 crore, up 14.1% YoY, while PAT jumped 253% YoY to ₹375 crore. EPS? ₹1.08 — the kind of number that makes you say, “At least it’s not negative this time.” The stock P/E is a heavenly 153, which only means investors are pricing in more dreams than steam.
Debt has inflated to ₹10,969 crore (up from ₹8,856 crore in FY24), but hey, that’s what faith-based financing looks like in PSU land. ROE is at 2.12%, which is what private sector CFOs call “a rounding error,” while ROCE stands at 4.87% — at least it’s positive!
And yet, the company commands an order book of ₹1.35 lakh crore, equal to 1.5 years of sleepless nights for project managers across India.
Curious? You should be. Because this isn’t just an earnings report — it’s an epic of how a government-backed engineering dinosaur is slowly learning yoga, hydrogen, and capital discipline.
2. Introduction
Once upon a time in the 1960s, when India was still figuring out how to make its own screws, BHEL was born — the government’s answer to “Why import turbines when we can take ten years to make our own?”
For decades, BHEL was the heart of India’s power ecosystem. If it had “smoke” and “steam,” BHEL built it. But then came the renewables era — and suddenly, the nation that once worshipped coal started talking solar, wind, and green hydrogen. Poor BHEL was left holding a pile of blueprints for 800MW boilers no one wanted.
Cut to today — this PSU phoenix has clawed its way back from loss-making years (FY20–FY22) to actual profitability. Q2FY26’s ₹375 crore profit might not make private sector bosses jealous, but in PSU bingo, it’s a win.
But the story isn’t just about profits — it’s about reinvention. BHEL is busy pivoting from “boilers and turbines” to “electrolysers and fuel cells.” Yes, the same company that once took 7 years to commission a coal unit now wants to power your hydrogen car.
So, is this Bharat Heavy Electricals or Bharat Hydrogen Enthusiasts Limited? Stick around — the plot thickens faster than their tender paperwork.
3. Business Model – WTF Do They Even Do?
Let’s simplify. BHEL basically builds big, loud, expensive machines that make other things work — mostly power plants, locomotives, and defense systems. It’s India’s engineering uncle who still insists on using a drawing board instead of AutoCAD.
The company has two main engines:
Power Sector (79% of Q1FY25 revenues) – the bread, butter, and soot. This segment handles coal, gas, hydro, and nuclear power projects, plus new-age things like emission control, coal-to-chemical systems, and spare parts for non-BHEL sets. If you’ve seen smoke billowing from a 500MW plant somewhere, chances are BHEL had something to do with it.
Industry Sector (21%) – this one’s like BHEL’s side hustle: equipment for defense, aerospace, transportation, renewables, and oil & gas. It also takes up EPC contracts for industrial systems and energy storage — because apparently, even turbines need a backup plan now.
The company’s product list is a museum of Indian engineering: Steam generators, turbines, soot blowers (yes, that’s a thing), piping systems, hydro power plants, and now — hydrogen electrolysers.
With 16 manufacturing units, 2 repair units, 8 service centers, and 15 regional marketing offices, BHEL is less of a company and more of a small country. Its engineers probably spend more time filling forms than welding pipes.
Fun fact: BHEL has installed 53% of India’s total conventional power capacity (168 GW) — which means if you switched off every BHEL-made turbine, India would probably go dark faster than Delhi during a transformer trip.
4. Financials Overview
Let’s get to the numbers. Because as every PSU investor knows, comedy is best served with data.
Metric
Q2FY26 (Latest)
Q2FY25 (YoY)
Q1FY26 (QoQ)
YoY %
QoQ %
Revenue (₹ Cr)
7,512
6,584
5,487
14.1%
36.9%
EBITDA (₹ Cr)
581
275
-537
111%
NA
PAT (₹ Cr)
375
106
-456
253%
NA
EPS (₹)
1.08
0.30
-1.31
260%
NA
YoY growth that would make even PSU HR departments smile.
The operating margin bounced back to 8%, up from a dismal -10% last quarter. So yes, profitability exists — somewhere between deferred tax credits and “other income.”
Other income remains a friendly ghost at ₹189 crore, proving again that BHEL’s best business line might be “interest on fixed deposits.”
5. Valuation Discussion – The Fair Value Range
Now, let’s pretend we’re analysts at a coffee-fueled brokerage who just discovered Excel.
Step 1: P/E method EPS (TTM) = ₹1.60 Industry average P/E ≈ 52.8 So, fair value range = 1.6 × (40 to 60) = ₹64 to ₹96
Step 2: EV/EBITDA method EV/EBITDA = 48× currently Let’s assume a saner range of 20×–30×
