BHEL Q2 Profit Jumps 119% to ₹821 Crore as Margins Improve

Bharat Heavy Electricals Limited (

) reported a strong Q2 FY27 performance, with net profit more than doubling year-on-year. However, the market reaction remained cautious as investors weighed improving execution and margins against valuation concerns and the sustainability of future growth. Key Q2 FY27 Highlights - Consolidated revenue from operations increased 24% year-on-year to ₹9,300 crore. - Net profit rose 119% to ₹821 crore, compared with ₹375 crore a year earlier. - EBITDA margin expanded 330 basis points year-on-year to 11%, supported by better gross margins and execution of newer, better-priced orders. - The order book stood at approximately ₹2.6 lakh crore, providing substantial execution visibility. What Are Brokerages Saying? Nuvama retained its Buy rating and raised its target price to ₹540 from ₹530. It expects execution-led margin improvement to support earnings growth, although it flagged weaker fresh order inflows and revised its FY27 earnings estimate downward. JM Financial also maintained its Buy rating and raised its target price to ₹535, citing stronger margins, improved working capital, better collections and a promising thermal power project pipeline. My View BHEL’s results indicate a meaningful improvement in execution and operating profitability. The large order book and potential demand from thermal power projects provide a supportive medium-term outlook. However, investors should not extrapolate one strong quarter indefinitely. Fresh order inflows declined sharply year-on-year, and timely project execution, cash-flow conversion and sustained margin expansion remain critical. The key question is whether BHEL can convert its substantial order book into consistent earnings growth at a valuation that leaves room for future returns.