BHEL Share Poised for Significant Turnaround in Ordering Cycle Over Next 3-4 Years; Antique Sees Exponential Earnings Growth

Manoj Prasad

India’s state-owned heavy electrical equipment manufacturer Bharat Heavy Electricals Limited (BHEL) is expected to witness a substantial turnaround in its business fortunes over the next 3 to 4 years, according to leading brokerage Antique Stock Broking.

In its latest research report, Antique stated that BHEL is likely to see a strong rebound in order inflows from both its power and non-power segments. This growth will be driven by an uptick in domestic capex and improving competiveness.

BHEL Order Pipeline Swells to Over Rs 1 Lakh Crore by FY2026

As per Antique’s estimates, BHEL’s total order intake could spike to around Rs over 1 lakh crore during financial years 2024 to 2026 (FY2024-FY2026). This quantum of new orders would be almost 3 times the company’s order achievement in the 3 years prior to FY2024.

The brokerage expects BHEL to bag average annual orders worth around Rs 30,000 crore during FY2024-FY2026, which would be more than double its long-term average of Rs 27,400 crore received in the FY2012–FY2023 decade.

Surging Orders to Catapult BHEL Order Book to Record High

Backed by strong project execution capabilities, BHEL’s overall order book position is projected to hit an all-time record peak of over Rs 1 lakh crore by FY2026, pointed out Antique. This indicates the order backlog could expand exponentially despite robust order delivery over the next 3 fiscal years.

The rapidly swelling order pipeline and order book suggest BHEL’s revenue and earnings growth could accelerate at an unusually high pace during this period.

Operating Leverage to Drive Exponential Earnings Growth

Antique’s analyst expects BHEL’s consolidated net profits to rise at an exponential rate over FY2024-FY2026, powered by strong operating leverage. As fixed costs get absorbed due to rising order execution, the earnings growth could outpace topline expansion during this period.

The brokerage has forecast multibagger 271% growth in BHEL’s annual net profit from Rs 928 crore in FY2023 to Rs 3,442 crore by FY2026. Over the same period, total income is seen rising by a relatively slower 155% from Rs 16,969 crore to Rs 43,249 crore.

BHEL Valuations Inexpensive Despite Recent Rally

BHEL’s share price has witnessed a remarkable rally in 2023 so far, jumping nearly 142% year-to-date on the BSE. However, as per Antique’s estimates, the valuations still remain modest given the strong imminent upcycle.

The brokerage has pegged BHEL shares at 26 times forward earnings, assigning the stock a revised price target of Rs 230 per share. This target indicates a nearly 19% further upside from current levels of around Rs 193 per share.

Domestic capex recovery, structural improvements positive triggers

The optimistic outlook on BHEL is underpinned by expectations of a secular uptrend in India’s power and capital goods sector capex over the medium term. The government’s strong infrastructure push and reforms drive are acting as key catalysts.

Further, BHEL is seen benefiting from in-house initiatives undertaken to improve competiveness via higher localizing and rationalization of manpower. Such structural improvements have started reflecting in BHEL wining orders through open competitive bidding.


In summary, BHEL seems primed for a major multi-year turnaround starting FY2024, as order inflows are set to accelerate rapidly driven by capex revival. Antique believes investors should utilize dips to accumulate the stock from a 2-3 year perspective, as upside potential appears sizable amid currently reasonable valuations.

Frequently Ask Questions

How much order intake is expected for BHEL in FY2024-26?

According to Antique, BHEL is likely to see an average annual order intake of around Rs 30,000 crore in FY2024-26, which would be over 2 times higher than its past long-term average.

What could be BHEL’s total order book position by FY2026?

Backed by strong execution, BHEL’s overall order pipeline is projected to swell to a record over Rs 1 lakh crore by FY2026 per Antique’s estimates.

Why is BHEL’s earnings growth likely to accelerate exponentially over FY2024-26?

Operating leverage benefits from rising order execution could drive BHEL’s earnings growth at a much faster rate than revenue growth in this period.

What upside is seen in BHEL share price as per Antique’s target?

Antique has set a target price of Rs 230 for BHEL stock, which implies an upside potential of nearly 19% from current market levels.

What are the key drivers for BHEL’s turnaround over the next 3-4 years?

The likely turnaround would be aided by domestic capex recovery, government infrastructure push, market share gains from competitiveness initiatives and manpower rationalization.

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