BHEL Q4 Results Review: ICICI Securities Maintains 'Buy' On Strong Order Inflow, Sees 30% Upside

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ICICI Securities Report

Bharat Heavy Electricals Ltd. is the poster child of the Indian thermal power industry. India has recognised the need for building new base load plants despite energy transition. The industry has seen a flurry of new coal orders in FY24 and FY25.

Therefore, it saw order inflow of Rs 780 billion/Rs 925 billion in FY24/FY25 (versus average order inflow of Rs 214 billion between FY19–23). As a result, BHEL’s order book stands at Rs 2 trillion. Besides, it is level-one orders for ~6GW of coal-based power plants; we estimate the total order size from these projects at over Rs 500 billion. We estimate an OI of INR 800bn in FY26E. Thus, we expect a sharp ramp-up in revenues to follow from FY25–27E.

During the quarter, BHEL reported revenue/Ebitda/PAT growth of 19%/103%/97% YoY. We reiterate Buy with a revised target price of Rs 324 (Rs 259 earlier).

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