BHEL Shares Price Fall 7% After Q1 Loss Widens to ₹455 Crore

Shares of Bharat Heavy Electricals Limited fell nearly 6% after the public sector undertaking posted a net loss of Rs 455 crore in Q1 of FY 2025-26. The stock price fell the most on BSE, finishing the day at ₹234.35 or a fall of 4.7% from the previous close of ₹239.65.

This is the second subsequent day of loss for the Maharatna PSU stock. Despite the results, BHEL has lost almost 8% in two trading sessions. Further, it has shed more than 21% from its 52-week high of ₹305.8 made in August 2024.

BHEL Q1 Results 2025

BHEL's Q1 FY26 results disappointed investors with several concerning metrics:

Financial Results:

• Net loss was ₹454.89 crore during Q1 FY26, nearly twice the amount of loss during Q1 FY25, which was ₹212.52 crore.

• Revenue during Q1 FY26 was stable at ₹5,486.91 crore compared to ₹5,484.92 during Q1 FY25

• EBITDA margin reduced to -9.8% during Q1 FY26 compared to -3.1% during Q1 FY25

 

Key Findings:

• Other expenses increased from ₹340 crore to ₹680 crore possibly due to one-off provisions.

• The price of raw materials and services increased by 10.8% 

• Total expenses increased by turn increased by about 7% to ₹6,280 crore

• Weak execution in the quarter detracted from the overall performance.

Why BHEL Share is Falling

The sharp fall in BHEL share price can be attributed to several factors:

1. Increased Net Loss: The company's loss in Q1 of nearly doubled year on year 

2. Margin Pressure: EBITDA margins turned deeply negative at -9.8%

3. Rising costs: There was a large increase in operating expenses and raw material costs 

4. Execution Delays: The quarter was marred by poor project execution that depressed revenue growth 

5. Market Sentiment: Market participants are worried about the company's short-term profitability

BHEL Share Price Target 2025

Despite the poor Q1 show, most analysts remain optimistic about BHEL's long-term prospects:

Nuvama Institutional Research:

• Maintains 'BUY' rating

• Revised target price: ₹335 (down from ₹360 earlier)

• Believes in thermal power revival story

• Expects BHEL to win ~17GW orders over next 2-3 years due to 90%+ market share

JM Financial:

• Retains 'BUY' rating

• Target price: ₹278 (unchanged)

• Expects performance improvement from Q3 FY26

• Projects EBITDA margin improvement from 4.4% in FY25 to 11% in FY28

Other Analyst Projections:

• Share price target for 2025 ranges between ₹336-₹361 according to various analysts

• Current analyst consensus shows target price of ₹226.18, indicating a slight downside of -5.15%

Positive Factors Supporting BHEL Stock

Strong Order Book:

• The total order book stands at ₹2,044 billion

• Expected to grow to ₹2,250 billion by March 2026

• Order inflows increased 42% year-on-year to ₹13,445 crore in Q1

• Secured orders for six 800MW steam turbine generators

• Part of the 6,000 MW HVDC transmission project

Market Position:

• Near monopoly in thermal power with 90%+ market share

• Well-positioned to benefit from India's thermal power revival

• Government support as a Maharatna PSU

• Focus on renewable energy projects

Technical Analysis View

Anshul Jain from Lakshmishree Investment notices further weakness:

"BHEL has broken down from its established range of 240–270 with the change in trend confirmed. The stock now looks set up for yet another major support zone 199–190. Barring BHEL's quick reclaim of 240 with strong volumes, further downside is probable."

Should You Buy, Sell, or Hold BHEL Stock?

For Long-term Investors: Most brokerages recommend holding or buying BHEL stock for the following reasons:

• Strong order book = visibility on revenues before earnings margins expected to improve with legacy projects finishing up. 

• The thermal power revival story remains. 

• The infrastructure push by the government should benefit BHEL.

 

For Short-term Traders: The technical setup suggests caution:

• Support is immediate at ₹190-199, resistance is at ₹240. 

• In the near-term weak momentum exists, better to wait for the reversal signals than to start buying

 

Conclusion

You can view BHEL's Q1 FY26 results in different ways. They are disappointing with doubled losses and margin pressure. However, the strong order book and position as the largest company in thermal power in India give analysts confidence for the long term. In the short run, the company will have weaknesses. However, they are in a thermal power revival story that is intact. 

While it is important to acknowledge the above, investors must assess their own risk tolerance and investment time horizon before making a decision. The fundamentals support a recovery story, but investors should plan for near-term volatility in the meantime.

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Disclaimer : This analysis is for educational purposes and not financial advice. Please consult a financial advisor before making investment decisions.

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