BHEL shares: Analysts dismiss China worries, see up to 38% upside potential; check targets

BHEL share price: After a sharp 10% fall on Thursday, shares of Bharat Heavy Electricals Ltd (BHEL) saw a decent rebound on Friday as the stock managed a partial rebound. Brokerage firms, tracking the stock, continue to remain positive on it and see up to 38 per cent upside in the multibagger PSU counter.

On Thursday, select media reports suggested that a high-level committee has recommended that India should remove five-year-old restrictions that have largely kept Chinese power equipment manufacturing firms, generation, and T&D out of government contracts. This led to a sharp correction in stock prices of most listed power equipment manufacturers including BHEL.

Following the announcement, shares of BHEL settled at Rs 272.30 on Thursday, falling 10 per cent. However, the stock gained nearly 5 per cent on Friday to Rs 285.50, before giving up gains partially, and a total market capitalization of Rs 96,000 crore. The stock hit its 52-week high of Rs 305.85 on Wednesday, January 07, 2026 but has dropped 11 per cent from those levels.

As part of the 'Atmanirbhar Bharat package' in 2020, the government had imposed restrictions on bidders from countries that share a land border with India from participating in public procurement tenders, impacting PSUs’ cost competitiveness and project execution, said JM Financial.

Removal of restrictions at the components level will benefit PSUs like BHEL. Even broad-based removal will have little impact due to developers' previous experience with Chinese sets and the large domestic demand within China. We remain optimistic about sustained thermal opportunities and BHEL’s performance, it said.

"As BHEL's execution strengthens, we expect EBITDA margin to expand from 4.4 per cent in FY25 to at least 10.7 per cent in FY28 and EPS to grow from Rs 1.5 in FY25 to Rs 12.1 in FY28. We maintain 'buy' on the stock with a target of Rs 363 based on March 2028E EPS," JM Financial added.

Antique Stock Broking said that the BHELwas most adversely impacted, given its dominance in India's thermal power plant manufacturing. "We find the news irrelevant for BHEL and reaction to the stock unjustified. We maintain a 'buy' rating on the stock at a target price of Rs 349," it added.

Nuvama expects Q3 to see the lingering impact of legacy low margin projects (Patratu and Ennore) which may keep results/margins depressed. "However, from Q4FY26 onwards, we expect the newer projects to enter the sales recognition phase which will see a turnaround by FY27," it added.

In other news, Bharat Heavy Electricals received an order worth Rs 5,400 crore from Bharat Coal Gasification and Chemicals (BCGCL) for the coal gasification and raw syngas cleaning plant of BCGCL’s coal-to-2,000 TPD ammonium nitrate project at Lakhanpur, Odisha. BCGCL is a joint venture between Coal India Ltd and the state-run capital good major in a 51:49 ratio.

BHEL's Rs 5,400 crore order win for coal gasification and raw syngas cleaning plant order has reached 60 per cent of FY26 orders, said USB. "Marking first commercial use of BHEL’s proprietary PFBG tech, moving from R&D to execution. 42-month execution, 60-month O&M. Positive read-through post recent correction," said the global brokerage firm with a 'buy' rating and target price of Rs 375.