BHEL or HAL shares: Which PSU stock is a better bet? G Chokkalingam weighs in
BHEL on Wednesday launched an offer-for-sale (OFS), with the floor price set at Rs 254 per share. The government is looking to divest up to a 5 per cent stake in the state-owned company.
- Feb 11, 2026,
- Updated Feb 11, 2026 11:34 AM IST
G Chokkalingam, Founder and Managing Director of market research firm Equinomics Research, believes that Bharat Heavy Electricals Ltd (BHEL) looks less attractive than Hindustan Aeronautics Ltd (HAL) at the current juncture.
"If you go by a relative basis, I would rather 'Sell-on-rise' BHEL and 'Buy' HAL. Looking at BHEL, the problem is that it is not able to scale up its revenue. The annualised revenue now is less than what it used to achieve in 2014. There has not been much growth in the revenue consistently over the last one decade or more than one decade," the market veteran told Business Today on Wednesday.
"It's sitting on a high level of inventory and receivables, trailing P/E is more than 100 and the return ratio is poor. RoCE (Return on Capital Employed) is less than 5 per cent. These kind of characteristics are there for this company for many years. Technically, it goes up and comes down," he said.
"The government is holding around 63 per cent in BHEL. So, there could be a possibility of more dilution. We have seen a lot of stocks from the PSU table when the government dilutes, they don't crash. That is where the relative valuation supports the stock. But this stock lacks, that's why it is down," Chokkalingam added.
"The valuation comfort is not there. So I would, in et all any recovery happens, I would give a 'Sell' call for BHEL and then I would 'Buy' Hindustan Aeronautics. The kind of order book HAL has got for the next one year is fabulous. There is a lot of cash in the book, and gross cash is more than even the sales. So, that gives me a lot of confidence in HAL. So, from a relative perspective, 'Sell-on-rise' BHEL and 'Buy' HAL," he further stated.
Meanwhile, BHEL on Wednesday launched an offer-for-sale (OFS), with the floor price set at Rs 254 per share. The government is looking to divest up to a 5 per cent stake in the state-owned company. It will initially sell 10.44 crore equity shares, representing a 3 per cent stake, and may offload an additional 6.96 crore shares, or 2 per cent, under the green-shoe option if the issue is oversubscribed.
G Chokkalingam, Founder and Managing Director of market research firm Equinomics Research, believes that Bharat Heavy Electricals Ltd (BHEL) looks less attractive than Hindustan Aeronautics Ltd (HAL) at the current juncture.
"If you go by a relative basis, I would rather 'Sell-on-rise' BHEL and 'Buy' HAL. Looking at BHEL, the problem is that it is not able to scale up its revenue. The annualised revenue now is less than what it used to achieve in 2014. There has not been much growth in the revenue consistently over the last one decade or more than one decade," the market veteran told Business Today on Wednesday.
"It's sitting on a high level of inventory and receivables, trailing P/E is more than 100 and the return ratio is poor. RoCE (Return on Capital Employed) is less than 5 per cent. These kind of characteristics are there for this company for many years. Technically, it goes up and comes down," he said.
"The government is holding around 63 per cent in BHEL. So, there could be a possibility of more dilution. We have seen a lot of stocks from the PSU table when the government dilutes, they don't crash. That is where the relative valuation supports the stock. But this stock lacks, that's why it is down," Chokkalingam added.
"The valuation comfort is not there. So I would, in et all any recovery happens, I would give a 'Sell' call for BHEL and then I would 'Buy' Hindustan Aeronautics. The kind of order book HAL has got for the next one year is fabulous. There is a lot of cash in the book, and gross cash is more than even the sales. So, that gives me a lot of confidence in HAL. So, from a relative perspective, 'Sell-on-rise' BHEL and 'Buy' HAL," he further stated.
Meanwhile, BHEL on Wednesday launched an offer-for-sale (OFS), with the floor price set at Rs 254 per share. The government is looking to divest up to a 5 per cent stake in the state-owned company. It will initially sell 10.44 crore equity shares, representing a 3 per cent stake, and may offload an additional 6.96 crore shares, or 2 per cent, under the green-shoe option if the issue is oversubscribed.