1. At a Glance
BHEL is India’s OG engineering PSU. It builds thermal power plants, gas turbines, transformers, and your patience. After a decade of underperformance, it’s now flexing ₹6,500 Cr orders and a multibagger tag. But… ROE is still 2%.
2. Introduction with Hook
Imagine your grandfather suddenly got into CrossFit and crypto. That’s BHEL. A sleepy PSU now pumping iron with mega orders from Adani Power, buzzing retail frenzy, and turning profitable again—after years of “what even is margin?”
- Market Cap: ₹89,628 Cr
- FY25 Net Profit: ₹534 Cr (up from ₹282 Cr FY24)
- P/E: 168x — LOL, for a company that runs on coal AND nostalgia
3. Business Model (WTF Do They Even Do?)
BHEL builds everything that makes India run on electricity (and bureaucracy):
- Thermal Power Equipment (Turbines, Boilers, Generators)
- Transmission Systems
- Transport (Railway Locos)
- Defence Components
- Solar + Nuclear + Gas Projects
They design, engineer, erect, commission, and fight court cases.
Revenue: Mostly EPC (Engineering-Procurement-Construction)
Clients: NTPC, SEBs, Adani, Railways, DRDO
4. Financials Overview
| ₹ Cr | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|
| Revenue | 21,211 | 23,365 | 23,893 | 28,339 |
| Net Profit | 445 | 654 | 282 | 534 |
| OPM % | 4% | 4% | 3% | 4% |
| ROE % | 2% | 1.88% | 0.81% | 2.17% |
Profits are slowly coming back. The margins though? Still thinner than BHEL’s dividend yield.
5. Valuation
- P/E: 168x
- Book Value: ₹71
- Price/BV: 3.63x
- EPS FY25: ₹1.53
Method 1: P/E Normalized (EPS ₹2–₹4 expected in FY26)
FV Range: ₹80–₹120 (at 30x–40x fair PE for PSU)
Method 2: EV/EBITDA, assuming ₹1,800 Cr EBITDA
EV = ~₹25,000 Cr ⇒ FV = ₹100–₹130 range
Blended Fair Value Range: ₹90 – ₹130
At CMP ₹258, it’s PSU euphoria. Not earnings.
6. What’s Cooking – News, Triggers, Drama
- ₹6,500 Cr Adani Order: Six 800MW supercritical thermal units
- Tax Woes Cleared: No new penalties in FY25 (yay)
- Project Pipeline expanding across India, including NTPC and Railways
- Capex-Lite Era Ends: Expect infra spending to rise with more orders
- Risk: Execution delays + margin erosion + PSU fatigue
7. Balance Sheet
| Item | Mar 2025 |
|---|---|
| Equity Capital | ₹696 Cr |
| Reserves | ₹24,026 Cr |
| Borrowings | ₹9,015 Cr |
| Total Liabilities | ₹68,083 Cr |
| Fixed Assets | ₹2,981 Cr |
| CWIP | ₹162 Cr |
Key Takeaways:
- Debt’s up – ₹9,000 Cr!
- Low asset turns = slow money
- Huge working capital stress = PSU pain
8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net Cash |
|---|---|---|---|---|
| FY23 | ₹(741) Cr | ₹1,480 Cr | ₹89 Cr | ₹829 Cr |
| FY24 | ₹(3,713) Cr | ₹1,331 Cr | ₹2,656 Cr | ₹274 Cr |
| FY25 | ₹2,192 Cr | ₹(2,731) Cr | ₹(857) Cr | ₹(1,396) Cr |
- CFO swung wildly
- FY25’s negative net cash flow = investment spree or panic mode?
- Still has enough liquidity via government backing
9. Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROCE % | 4% | 3% | 4.5% |
| ROE % | 1.9% | 0.8% | 2.17% |
| OPM % | 4% | 3% | 4% |
| Payout % | 21% | 31% | 33% |
| EPS ₹ | ₹1.88 | ₹0.81 | ₹1.53 |
Verdict: These aren’t sexy. They’re stressy. But hey, PSU stocks never needed logic, just budget mentions.
10. P&L Breakdown – Show Me the Money
| Year | Revenue | OPM % | Net Profit | EPS |
|---|---|---|---|---|
| FY22 | ₹21,211 Cr | 4% | ₹445 Cr | ₹1.28 |
| FY23 | ₹23,365 Cr | 4% | ₹654 Cr | ₹1.88 |
| FY24 | ₹23,893 Cr | 3% | ₹282 Cr | ₹0.81 |
| FY25 | ₹28,339 Cr | 4% | ₹534 Cr | ₹1.53 |
Consistency? Nope. But revival? Slightly. Thanks, infra boom.
11. Peer Comparison
| Company | CMP (₹) | P/E | ROE % | OPM % | PAT (₹ Cr) | Sales (₹ Cr) |
|---|---|---|---|---|---|---|
| BHEL | 258 | 168 | 2.17 | 4% | 534 | 28,339 |
| ABB India | 5,608 | 62 | 28.8 | 18.9% | 1,889 | 12,267 |
| CG Power | 677 | 112.6 | 27.6 | 13.3% | 947 | 9,908 |
| Siemens | 3,147 | 59.6 | 17.7 | 12.0% | 1,879 | 17,507 |
Takeaway: BHEL has the revenue. But profits and margins? Still on government time.
12. Miscellaneous – Shareholding, Promoters
| Category | Jun 2025 |
|---|---|
| Promoters (GoI) | 63.17% |
| FIIs | 6.36% (falling) |
| DIIs | 18.45% (rising) |
| Public | 12.02% |
- FII exiting = not a great sign
- Retail loves the ₹200 club
- Massive shareholder base: 19.8 lakh – classic PSU frenzy
13. EduInvesting Verdict™
BHEL is like a Bollywood comeback movie. Big name, nostalgic power, but the script is still mid. Yes, orders are flowing, and the company is finally profitable. But the stock has priced in a decade’s worth of good news already.
If PSU mania continues, it may run more. But fundamentals? They’re still in thermal rehab.
Buy for Bharat dreams. Not balance sheet.
Metadata
– Written by EduInvesting Research Desk | July 15, 2025
– Tags: BHEL, PSU Stocks, Thermal Revival, Adani Order, Electrical Equipment, High PE Stocks, Infra India, Q1FY26
