Hold BHEL; target of Rs 245: Prabhudas Lilladher

Prabhudas Lilladher recommended hold rating on BHEL with a target price of Rs 245 in its research report dated January 19, 2026.

Broker Research

January 20, 2026 / 12:54 IST

hold

Prabhudas Lilladher's research report on BHEL

We revise our FY26E/FY27E EPS estimate by -18.9%/-4.3% factoring in slower execution pace amid strong order backlog, normalized provision, and moderate order inflow momentum. BHEL delivered a revenue growth of 16.4% YoY with EBITDA margin expanding by 225bps YoY aided by lower other expenses (vs higher base in Q3FY25) partially offset by decrease in GM. Execution in the Power segment remained slower, translating into ~13% YoY revenue growth despite a healthy Rs1.7trn order backlog, supported by recent Rs66.5bn EPC package win (1×800MW) from NTPC, reinforcing BHEL’s positioning in the thermal space. In contrast, the industry segment continued to deliver strong execution with revenue up 27.4% YoY, driven by accelerating traction across transmission, transportation, oil & gas and defense verticals; however, order inflows in Industry moderated sharply to Rs16.3bn (vs. ~Rs57bn in Q3FY25 on a high base). While near-term challenges around execution intensity persist, a robust pipeline and a gradual shift towards non-Power opportunities with rise in public/private capex, BHEL is well placed for sustained growth.

Outlook

The stock is currently trading at a P/E of 28.2x/20.3x on FY27/28E earnings. We maintain our rating to ‘Hold’ and value a stock at a PE of 22x Sep’27E (same as earlier) with a revised TP of Rs245 (Rs250 earlier).

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