BHEL Q4 Results Review - The Year Of Thermal Revival: ICICI Securities

ICICI Securities Report

Bharat Heavy Electricals Ltd. reported an order inflow of Rs 780 billion, three times YoY. Order inflow for the quarter was Rs 420 billion. FY24 saw strong order inflows worth Rs 520 billion in power owing to 9.6 GW thermal order wins and Industry orders worth Rs 220 billion.

The year saw a revival in thermal orders in India, with the country laying out bids for a total of 10 GW, and BHEL had a 100% strike rate in the bids.

It is expected that India will seek bids for the ordering of 10 GW again over the next few years, leading to a healthy order inflow outlook. However, BHEL’s execution and gross margins were subdued, as the company is still executing legacy orders.

We expect the impact of the legacy orders to wear out and the new orders to start contributing meaningfully H2 FY25 onwards. We reiterate Buy with target price Rs 370 at 40 times FY26E.

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