Up 850% in 5 years! Why brokerage see up to 35% rise in this multibagger PSU stock

BHEL shares: Brokerage firms continue to remain positive on Bharat Heavy Electricals (BHEL) as they see up to 35 per cent uspide in the multibagger PSU stock after it reported a strong set of numbers in the quarter ended on September 30, 2025, which were better than street's expectations.

BHEL reported a net profit of Rs 368 crore in the September 2025 quarter, up 280 per cent on a year-on-year (YoY) basis. Its revenue rose 14.1 per cent on a yearly-basis to Rs 7,511 crore for the quarter, while Ebitda more than doubled to Rs 580.8 crore. Its operational margins expanded sharply to 7.7 per cent for the quarter.

The strong margin improvement was attributed to better execution, favourable cost dynamics, and improved performance across the power and industrial segments. BHEL received orders worth Rs 35,375 crore during the quarter, taking the total order book to Rs 2.2 lakh crore, 80 per cent or Rs 1.75 lakh crore of order book from power segment and rest is Industry segment.

Shares of BHEL have been marching higher as it extended its gains for another 2 per cent to Rs 265.60 for the day, commanding a total market capitalization close to Rs 92,000 crore. The stock has soared more than 12 per cent in the last three-trading sessions, while they have zoomed nearly 850 per cent in the last five years.

BHEL delivered healthy Q2 performance with significant beat on margins and profitability. Lower other expenses and improved margins across both segments resulted in 350 bps YoY jump in Ebitda margin to 7.7 per cent. Business outlook looks promising as over 10 GW of ordering is expected in FY26 as well, said Antique Stock Broking.

"We expect business performance to further improve in FY26 as the recently bagged better-margin orders enter execution leading to material improvement in the company's profitability. We believe BHEL will continue to witness elevated ordering of Rs 80,000 crore over the next two years, led by both industry (non-power) and power segments," it said with a 'buy' and a target price of Rs 302.

"We see current performance as initial signs of pick up in execution. As we discussed in our recent report, out of 34GW of projects awarded in the new cycle, 21.6GW have just started and the remaining 12.8GW have not even started. We believe execution of current orders will further pick up 3QFY26 onwards, which has upside risk if new ordering accelerates and/or target increases further. We continue to maintain 'buy' with a revised target of Rs 320 (from Rs 278)," said JM Financial.

ICICIDirect expects order inflow momentum to continue, pickup in execution pace, thus built in order inflows of Rs 66,833 crore & Rs 49,200 crore in FY26E and FY27E, respectively. It pencils the revenues and PAT to grow at a CAGR of 26 per cent and 166 per cent over FY25-FY27E with PAT. This will also improve ROCE from low single digit to 12 per cent ROCE in FY27E, it said.

"Good accretion of orders and strong ordering pipeline will keep order inflows strong coupled with strong pick in execution from FY26E onwards. This will also help margins and return ratios to improve meaningfully over the next 2-3 years. Hence, we rate the stock buy with fair value of Rs 310 (30 times FY27E EPS)," said ICICIDirect Research.

Nuvama Institutional Equities retained a ‘buy’ as it expects FY26 to be a clean-up year with legacy low margin projects nearing completion, enabling FY27 margin rebound as new orders gain pace and operating leverage kicks in. "We are cutting FY26E/28E EPS by 22 per cent/16 per cent, and baking in Eighth Pay Panel impact in FY28E, yielding a target price of Rs 353 (from Rs 335)."