BHEL Share Price Falls Over 6% After Q1 Net Loss Widens to ₹445 Crore

Devendra Dixit August 07, 2025

 

BHEL share price

BHEL Share Price Falls Over 6% After Q1 Net Loss Widens to ₹445 Crore

India’s engineering giant Bharat Heavy Electricals Limited (BHEL) saw its stock tank sharply on August 7, 2025, after reporting disappointing financial results for the first quarter of FY26. The BHEL share price dropped 6.34%, closing at ₹224.45 on the NSE, as the company’s consolidated net loss widened significantly.

Let’s break down what led to this selloff, and what it means for investors.

Q1 FY26 Highlights: Widened Losses & Flat Revenue

BHEL reported a net loss of ₹445.50 crore for the quarter ended June 30, 2025 (Q1 FY26), compared to a loss of ₹211.40 crore in the same quarter last year (Q1 FY25). This represents a YoY increase of over 110% in losses.

Here’s a quick snapshot of the numbers:

Metric Q1 FY26 Q1 FY25 YoY Change
Net Loss ₹445.50 crore ₹211.40 crore ▲ 110.7%
Revenue from Operations ₹5,486.91 crore ₹5,485.38 crore ▲ 0.03%
Pre-tax Loss ₹608.04 crore ₹278.99 crore ▲ 117.9%
Total Expenses ₹6,279.78 crore ₹5,874.52 crore ▲ 6.89%

Despite reporting a flat revenue figure YoY, the company's expenses rose significantly, contributing to the sharp increase in losses.

Why Did BHEL Post Higher Losses?

There are several contributing factors to the poor performance:

1. Rising Costs

  • Total expenses increased by 6.89% YoY.
  • Cost of materials & services rose to ₹4,127.98 crore, up 10.81% from the previous year.
  • Employee benefits expense also edged higher by 1.92% YoY.

These rising costs ate into the company's margins, worsening the loss even though revenues were stable.

2. Underperformance in Power Segment

BHEL derives a large chunk of its revenue from the power business, which showed weakness this quarter:

  • Power segment revenue: ₹3,898.36 crore, down 5.55% YoY
  • Industry segment revenue: ₹1,588.32 crore, up 17.04% YoY

While the industry segment offered some support, it wasn't enough to offset the decline in power business.

Market Reaction: BHEL Share Price Falls 6.34%

Investors reacted swiftly to the poor earnings report. The BHEL share price fell 6.34% intraday, closing at ₹224.45 on NSE.

Here’s how the BHEL share price moved during the trading day:

Time Price (₹)
Open 240.00
Day’s High 242.35
Day’s Low 223.50
Close 224.45
% Change -6.34%

The stock witnessed heavy selling pressure, reflecting investor disappointment.

BHEL Share Price: Recent Performance

Before the Q1 earnings, the BHEL share price had been performing relatively well. Here’s how it fared over various timeframes:

Period Price Change (%)
1 Week -4.5%
1 Month +8.2%
3 Months +16.9%
YTD (2025) +23.7%

Despite the sharp fall, the stock is still in positive territory for the year. However, analysts suggest exercising caution going forward.

About Bharat Heavy Electricals Ltd (BHEL)

Founded in 1964, BHEL is India's largest government-owned engineering and manufacturing enterprise in the energy and infrastructure sectors.

Key Facts:

  • Owned by: Government of India (under the Ministry of Heavy Industries)
  • Business: Design, engineering, manufacturing, erection, testing, and servicing of a wide range of products.
  • Sectors Catered:
    • Power generation
    • Transmission
    • Industry
    • Transportation
    • Renewable energy
    • Oil & gas
    • Defence

Despite being a public sector unit, BHEL competes with private firms in capital-intensive markets, especially for power plant projects.

Segment-Wise Revenue Breakdown

In Q1 FY26, BHEL’s segmental performance showed mixed results.

Power Segment:

  • Revenue: ₹3,898.36 crore
  • YoY Change: -5.55%
  • Reason: Delays in new orders and execution, project cost overruns

Industry Segment:

  • Revenue: ₹1,588.32 crore
  • YoY Change: +17.04%
  • Reason: Improved traction in railways, defence, and renewables

While the industry segment saw growth, the dominant power segment’s underperformance overshadowed it.

Analyst Views & Market Commentary

Analyst Sentiment: Cautious

Brokerage firms and market experts have turned cautious on BHEL after the Q1 results. Key reasons include:

  • Persistent cost pressures
  • Sluggish power sector orders
  • High working capital cycle
  • Limited earnings visibility

Market Expert View:

“BHEL’s order inflow has remained sluggish, and the execution cycle is elongated. The widened Q1 loss highlights ongoing structural challenges in its core power business,” said an analyst from Motilal Oswal.

What Investors Should Watch Ahead

For investors tracking the BHEL share price, here are key factors to monitor going forward:

1. Order Book Visibility

  • Investors should track new project announcements.
  • Any big-ticket order wins from the government or power PSUs can boost sentiment.

2. Execution Timeline

  • Timely delivery of existing orders is crucial to improve margins.
  • Delays often lead to cost overruns and penalties.

3. Raw Material Costs

  • Steel, copper, and other material prices directly impact BHEL’s profitability.

4. Government Policies

  • As a PSU, BHEL's fate is closely tied to government capex cycles.
  • Announcements related to energy, railways, and defence will be key.

PSU Peer Comparison

Let’s see how BHEL compares with other listed PSUs in terms of stock performance and financial health:

Company Market Cap (₹ Cr) FY25 Net Profit (₹ Cr) P/E Ratio 1-Year Return
BHEL 78,000 (approx) Loss N/A +18.4%
BEL 115,000 ₹4,750 29x +65.2%
HAL 225,000 ₹9,125 32x +74.3%
NTPC 315,000 ₹18,500 11x +32.6%

Compared to peers like BEL and HAL, BHEL is still in the turnaround phase and lacks strong earnings momentum.

Should You Buy, Hold or Sell BHEL Shares?

Reasons to Hold or Buy:

  • Government capex focus could revive order inflows
  • Monopoly in several large infra projects
  • Debt-free balance sheet
  • Long-term PSU theme gaining investor interest

Reasons to Be Cautious:

  • Consistent quarterly losses
  • Execution delays
  • Margin pressures due to rising input costs
  • Power sector headwinds

Verdict: Cautious investors may prefer to wait for a turnaround or a strong earnings surprise before making fresh entries.

What’s Next for BHEL?

The next big trigger for the BHEL share price could be:

  • Government policy announcements on infra spending
  • New orders in defence or railways
  • Q2 FY26 earnings in October 2025

Any sign of margin improvement or return to profitability could lead to a short-term rally.

Summary: Key Takeaways

  • BHEL reported a net loss of ₹445.50 crore in Q1 FY26.
  • Revenue remained flat at ₹5,486.91 crore, while expenses surged nearly 7%.
  • The BHEL share price fell over 6% as investors reacted to the widened loss.
  • Weakness in the power segment and higher raw material costs dragged down performance.
  • Investors should stay cautious, but monitor upcoming orders and government policy cues.

Risk Disclaimer

Stock market investments are subject to market risks. The information provided in this article is for educational and informational purposes only and should not be construed as investment advice. Always consult with a registered financial advisor before making any investment decisions.

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