BHEL shares in spotlight: Legal success, fresh arbitration case lift stock price

Shares of Bharat Heavy Electricals Ltd (BHEL) were trading higher on Monday after the state-run company secured a significant legal victory and initiated a fresh arbitration case, which impacted its financial outlook. The company informed about the same through exchange filings with the bourses on Friday, post market hours.

"It is informed that an interim award passed in favour of Bharat Heavy Electricals (BHEL) for an amount of Rs 115 crore with interest at 18 per cent per annum wef 30 days from date of award, that is, July 27 2017 against RattanIndia Power has been upheld by Honourable High Court of Delhi vide judgment dated 06.03.2025," said the company in an exchange filing.

Besides the success for Rs 115 crore order, BHEL additionally informed that it has initiated a new arbitration claim against Fitwell Constructions for the recovery of contractual dues worth Rs 283.7 crore. The respondent has not yet filed a counterclaim.

Following the updates, shares of BHEL surged nearly 2 per cent to hit Rs 200.50 mark, with a total market capitalization above Rs 70,000 crore. The scrip had settled at Rs 196.70 in the previous trading session. However, the stock has corrected more than 40 per cent from its 52-week high at Rs 335.40 hit in July 2024.

Bharat Heavy Electricals Ltd on January 28 reported consolidated net profit of Rs 134.7 crore for the quarter ended December 31, 2024 as against net profit of Rs 60 crore in the year-ago period.

Bharat Heavy Electricals Ltd on January 28 reported consolidated net profit of Rs 134.7 crore for the quarter ended December 31, 2024 as against net profit of Rs 60 crore in the year-ago period.

Bharat Heavy Electricals Ltd on January 28 reported consolidated net profit of Rs 134.7 crore for the quarter ended December 31, 2024 as against net profit of Rs 60 crore in the year-ago period.

Net profit for BHEL increased by 170 per cent YoY to Rs 124 crore, while its revenue grew by 32 per cent from last year to Rs 7,277 crore in the December 2024 quarter. Its ebitda grew by 40 per cent YoY to Rs 304 crore, while margin expanded 30 basis points to 4.2 per cent for the reported quarter.

BHEL's order inflow surged by 167 per cent YoY from last year to Rs 6,860 crore, while its order book grew by 47 per cent on a yearly comparison to Rs 1.6 lakh crore. Interestingly, seven out of 17 analysts tracking BHEL stock had suggested to 'buy' it, while other two had a 'hold' rating on the stock.

Philip Capital expects capital goods companies are likely to see 15 per cent/10 per cent order book growth in FY 26/27 after 22 per cent growth in FY25. It sees BHEL to continue to witness healthy growth in FY27, keeping the stock in its top midcap capital goods play. Phillip Capital has a 'buy' rating on BHEL with a target price of Rs 270.

Among other brokerages, Antique Stock Broking and JM Financial has a 'buy' rating on BHEL with a target price of Rs 300 and Rs 358, respectively. PL Capital has an 'accumulate' rating on BHEL with a target price of Rs 226. However, Kotak has suggested to 'sell' BHEL with a target price of Rs 115.

Overseas brokerage firm Morgan Stanley has maintained its 'overweight' view on BHEL with a target price of Rs 352. However, another foreign brokerage firm CLSA maintained its 'reduce' rating on BHEL and cut its price target to ₹166 from ₹205 earlier, calling the stock 'expensive' at 34 times financial year 2026 price-to-earnings.