Of the last 21 trading sessions, the stock has gained in 18.
The stock ended 2020 at ₹35.9. It has risen more than 10x from those levels in just over five years, delivering positive annual returns in each of them.
What Is Aiding The Rally?
BHEL’s margins in the recently reported fourth quarter beat analyst expectations. Profitability during the quarter was aided by higher other income. Margins for the full financial year 2026 was at a five-year high.
Growth during the March quarter was led by the power business, where revenue grew by 53% from a year-ago. Industrial segment revenues remained flat.
Power segment EBIT margin increased from 5% last year to 20%, while industrial segment margin narrowed to 24% from 31% earlier.
Buy Or Sell BHEL?
Brokerages such as CLSA and JPMorgan are bearish on the stock.
CLSA said that quality of BHEL’s growth in the fourth quarter was not good as its gross margins fell.
It added that the stock has rallied on the energy security theme, but it does not see any new orders on the horizon, and also called the stock expensive.
CLSA has an underperform rating on BHEL with a price target at ₹282.
JPMorgan has an “underperform” rating on the stock with a price target of ₹220. The brokerage said that the sharp outperformance provides a good exit opportunity in a deeply cyclical name. It went on to add that the current stock price more than adequately factors in the long-term profit potential.
On the flip side, Morgan Stanley has an outperform rating with a price target of ₹444. It says BHEL’s turnaround could continue to surprise the markets.
BHEL has 21 analysts tracking the stock, of which nine have a “buy” rating, 10 have a “sell” rating and two others have a “hold” recommendation.
Shares of BHEL are trading 5.3% higher on Thursday at ₹406.35. The stock has now extended its gains for the year to 40%.
