BHEL target price: Stock falls 6% even as brokerage ups estimates; should you buy, sell or hold?

Some analysts believe the stock’s valuation already factors in the recovery, citing moderation in order intake and potential pressure on future growth. Others remain positive, expecting sustained execution, margin expansion and fresh order wins to drive profitability. Timely order conversion and execution momentum remain key monitorables, they said.

BHEL Q2 results
BHEL reported a 120 per cent jump in the net profit on year-on-year (YoY) basis to Rs 810 crore while revenue increased 23.8 per cent YoY to Rs 9,300 crore for the September 2026 quarter. The company clocked an EBITDA of 1,026 crore, up 76.6 per cent YoY, while margins expanded to 11 per cent YoY for the reported quarter.

The company's order book stood at Rs 2.57 lakh crore as of September 30, 2026, highlighting a 17.27 per cent YoY upside. The company announced a Rs 500 crore capital investment proposal for additional thermal and nuclear manufacturing facilities at the HEEP-Haridwar unit. Power and industry segment revenue also increased for the quarter.

BHEL share price
Shares of BHEL tumbled as much as 6.2 per cent to Rs 434.70 on Thursday, with its market capitalization falling to Rs 1.5 lakh crore. The stock hit its 52-week high at Rs 463.60 on Wednesday, October 15, following its Q2 results. Until Wednesday, the stock is up 102 per cent from its 52-week low at Rs 229.70, hit on October 24, 2025.

BHEL target prices
"We reiterate our 'underperform' rating on BHEL as the entry of Chinese suppliers, JSW Toshiba, L&T and Thermax into its core thermal equipment segment question its market dominance and its backlog looks to have peaked, while the stock is pricing in a lot more. Competition drove its first decline in backlog by 1 per cent QoQ in three years," said CLSA.

Operationally, BHEL did well in Q2FY27, it said. It raised the target price from Rs306 to Rs351 on our higher EPS estimates and valuation roll-forward. It believes the strong Q2 is priced in, while it is expensive at a 39 times FY28CL PE on a structural peak in its power orders.

BHEL reported a 12 per cent YoY beat on EBITDA as margins improved 330 bps YoY to 11 per cent. Industry segment margins have surprised at 420 bps YoY rise to 19.5 per cent, while power segment has seen only 250 bps uptick to 12.9 per cent, said Jefferies and raised its estimates to factor the 595 bps gross margin improvement in 2QFY27 with an 'underperform' rating and a target price of Rs 442.

Post improvement seen in FY26 and continuing in H1, Axis Capital has lowered the working capital intensity, leading to a higher net-interest income. It raised FY28/29E EPS by 25 per cent/23 per cent and revised DCF-based September 2027 target price to Rs 305, incorporating 10 per cent CAGR of topline growth over FY26-35 and 2 per cent terminal growth, said Axis Capital with a 'sell' rating.

Overall, improving execution, margin recovery and diversification beyond thermal power strengthen BHEL’s medium-term growth outlook, although timely order conversion and sustained execution momentum remain key monitorables, said PL Capital. It has maintained a 'reduce' rating with a target price revised of Rs 426 on the stock  factoring in stronger execution.

However, Macquarie raised its estimates and upgraded to 'neutral' with a target price of Rs 420, given continued traction in execution and margin expansion. "Order backlog remained strong, rising 17 per cent YoY to Rs 2.58 lakh crore. Order intake was muted in Q2 (-82 per cent YoY), but was down only 13 per cent YoY in H1," it added.

ICICI Securities expects BHEL to report order intake of Rs 60,000 crore each in FY27E and FY28E. "We revise our FY27E/ FY28E EPS from Rs 7.3/13 to Rs 8.8/13.5, factoring in improved execution, and introduce FY29E EPS of 15.7. We maintain our 'buy' rating with a revised target price of Rs 550 (up from Rs 520) as we roll over to FY29E," it adds.

BHEL announced a capex of Rs 500 crore and started hiring after almost 15 years. Considering pickup in execution and gross margin, we increase our EBITDA margin estimate for FY28/ FY29 to 13.2 per cent/15 per cent, said JM Financial. Promising thermal pipeline and net cash position drives us to maintain 'buy' with a revised target of Rs 535, valuing the stock at 30 times September 2028E EPS."