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BHEL Q2 Results Spark Wall Street Debate As Analysts Split On Stock
- •Analysts are evenly divided on BHEL with nine buy ratings, nine sell ratings, and three hold recommendations following stronger-than-expected Q2 results.
- •Macquarie upgraded BHEL to neutral with a price target of 420 rupees, citing a strong order backlog and execution traction.
- •UBS maintained a neutral stance but raised its price target to 500 rupees, noting weak order inflows during the quarter due to a lack of large thermal orders.
- •Jefferies kept an underperform rating with a 335 rupee target, preferring other power transmission players despite raising its EBITDA estimates.
- •CLSA reiterated its bearish stance with a 351 rupee target, warning about rising competition in the thermal equipment segment and high stock valuations.
Key Questions Answered
Bharat Heavy Electricals Ltd. reported a two-fold jump in consolidated net profit to ₹820.94 crore for the September quarter, driven by higher income from core verticals like power and industry. Total income rose 24% year-on-year to ₹9,553.01 crore.
Analysts are closely divided with nine buy, nine sell, and three hold recommendations. Macquarie upgraded the stock to "neutral" with a ₹420 target, UBS raised its target to ₹500, while Jefferies and CLSA maintained "underperform" ratings citing stretched valuations.
Bearish analysts like CLSA cite potential risks to BHEL's market dominance due to new competition from Chinese suppliers, JSW Toshiba, L&T, and Thermax in the thermal equipment segment. They also note that order backlogs may have peaked and the stock appears expensive at current trading multiples.
