BHEL Shares Fall 5 Percent on Profit Booking Despite Doubling Net Profit in Second Quarter

Shares of Bharat Heavy Electricals Ltd fell nearly 5% on Thursday, 15 October, as investors booked profits following the release of the company's second-quarter earnings. The stock had gained nearly 4% in the previous session after the results were announced, touching an intraday high of ₹453.40 and a low of ₹441.20 on the BSE.

Q2 Results

Bharat Heavy Electricals Ltd reported a more than two-fold jump in consolidated net profit to ₹820.94 crore for the July-September quarter of FY27, compared with ₹374.89 crore in the same period last year. Total income rose 24% year-on-year to ₹9,553.01 crore, up from ₹7,686.11 crore previously. Revenue from the power segment increased to ₹6,637.90 crore from ₹5,675.64 crore, while the industry business grew to ₹2,662.45 crore from ₹1,836.16 crore. However, total expenses climbed to ₹8,482.40 crore from ₹7,201.54 crore a year ago.

Brokerage Views

Nuvama Institutional Equities retained its 'Buy' rating on the stock and raised its target price to ₹540 from ₹530, noting that revenue rose 24% and EBITDA margin expanded to 11%. Nuvama pointed out that fresh order inflows declined 85% year-on-year, leaving the total order book at ₹2.6 lakh crore, which is 7.6 times FY26 sales. JM Financial also maintained a 'Buy' rating with a target price of ₹535, highlighting a net cash position of ₹4,600 crore, improved working capital with a cycle of 141 days down from 164 days, and a gross margin of around 37%.

Context

Bharat Heavy Electricals Ltd is a major state-owned engineering and manufacturing company in India's energy and infrastructure sector. When public companies report strong quarterly earnings, share prices sometimes fall anyway because investors sell to collect short-term profits after a prior price rise.