BHEL shares target: Nuclear push, strong order book to drive stock despite gas concerns

BHEL shares target price: Domestic brokerage firms continue to remain positive on Bharat Heavy Electricals Ltd (BHEL). JM Financial believes that BHEL is poised to start the financial year 2026-27 (FY27) with an order book of at least Rs 2.5 lakh crore, despite the impact of gas shortage on execution. ICICI Securities sees BHEL among key beneficiaries of India's nuclear energy blueprint.

BHEL is preparing for 24GW of new projects planned for awarding between FY27 and FY29, signalling a growing pipeline. The government has permitted BHEL to import 21 critical input materials from China to speed up executions. JM Financial notes this move is expected to be margin accretive for the company.

However, a shortage of key gases like RLNG, LPG used in metal cutting and industrial heating, and helium, essential as a leak tracer gas, is likely to affect operations. JM Financial estimates a revenue shortfall of Rs 2,500 crore to 3,000 crore in the fourth quarter, impacting FY26 revenue projections, which have been revised down to Rs 31,500 crore from Rs 33,500 crore.

Shares of BHEL settled at Rs 248.05 on Thursday, down nearly 1.45 per cent for the day, commanding a total market capitalization of more than Rs 86,300 crore. The stock is down 19 per cent from its 52-week low at Rs 305.85, hit in January 2026. The stock is down 15 per cent in 2026 so far.

Despite this, JM Financial maintains that FY27 revenue and margin estimates remain unchanged. The report cautions that a prolonged conflict affecting gas supply could lead to further downward revisions in FY27 estimates. JM Financial forecasts an expansion in BHEL’s Ebitda margin to at least 10.7 per cent by FY28.

According to JM, gas shortages are expected to impact production at major plants like Trichy and Haridwar from the fourth quarter. Helium shortages, linked to the Middle East conflict, may delay manufacturing of critical equipment. JM Financial emphasises this could affect execution and margins in the near term.

Order inflows remain strong, with year-to-date FY26 orders between Rs 70,000 crore and Rs 75,000 crore, excluding bids where BHEL is lowest bidder, such as the 1x800MW DVC Durgapur and 3x800MW EPC NTPC Meja projects. JM Financial states that even without these orders materialising immediately, BHEL’s order book for FY27 and beyond remains robust.

ICICI Securities highlights BHEL as a key beneficiary of India's Nuclear Energy Mission. BHEL, alongside Larsen & Toubro (L&T), is expected to play a major role in supplying equipment and executing engineering, procurement, and construction (EPC) contracts for nuclear power plants.

BHEL has a strong domestic supply chain and has been supplying critical components for nuclear projects. It is well-positioned to compete for reactor island EPC contracts, which are valued at approximately Rs 10 crore per megawatt. This necessitates greater equity deployment and presents substantial EPC opportunities for vendors like BHEL, it said.

The capital intensity of nuclear power is notably higher than coal, with costs roughly double at Rs 20–30 crore per megawatt compared to coal’s Rs 100 crore.  While the nuclear sector is opening up, challenges remain, including potential delays in regulatory approvals and high project costs. These factors could affect the pace of capacity additions, noted ICICI.

JM Financial highlights that allowing imports from China will help BHEL reduce costs and accelerate project completion. EPS are expected to grow from 1.5 in FY25 to 12 in FY28. JM Financial maintains a 'buy' rating with a target price of Rs 345, based on a 30 times multiple of March 2028 estimated EPS.

Overall, BHEL stands to benefit from India’s renewed focus on nuclear energy, supported by policy reforms and increasing demand for clean, firm power to complement renewable sources. ICICI Securities last had a 'buy' rating on BHEL with a target price of Rs 370 apiece.