BHEL shares fall 4% despite Q2 profit jumping 119% YoY. Should you buy, sell or hold?
BHEL shares fell 4.3% after rallying on strong Q2FY27 results, even as Nuvama and JM Financial retained their Buy ratings and raised target prices. Brokerages cited margin expansion, improved execution, a healthy order book and favourable thermal power prospects.
Bharat Heavy Electricals Ltd (BHEL) shares experienced a 4.30% drop to Rs 444.05 during Thursday's trading, potentially reflecting profit-taking after a surge in the previous session due to strong Q2FY27 results. The company reported a 24% YoY increase in consolidated revenue to Rs 9,300 crore, and net profit more than doubled, reaching Rs 821 crore, a 119% YoY increase.
BHEL's executive performance surpassed expectations, with EBITDA margin expanding by 330 basis points to 11%, thanks to a 595-basis point gross margin rise to 36.5%. However, fresh order inflows fell by 85% YoY, leaving the company's order book at Rs 2.6 lakh crore, or 7.6 times FY26 revenue. Despite this, two brokerage firms, Nuvama Institutional Equities and JM Financial Institutional Securities, maintained their 'Buy' ratings on BHEL and raised their target prices, citing improved execution and expanding margins.
Nuvama projected FY29 EBITDA margin at 13.8% and a compound annual growth rate of 53% in EPS from FY26 to FY29, while JM Financial raised its target price to Rs 535 and revised EBITDA margin forecasts for FY28 and FY29.
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