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ICICI Securities Report
Bharat Heavy Electricals Ltd. reported order inflow of ~Rs 200 billion while the outlook for order inflows for remainder of the fiscal remains strong. BHEL has commended 100% market share in the orders for thermal power plants in FY24 and Q1 FY25.
We estimate greater then 10GW of Rs 700 billion worth of opportunities in FY25. As a result, we expect its order book to further improve to Rs 2 trillion in the next three quarters. Also, NTPC has guided to award new thermal power plants of up to 26GW by FY26E.
As a result, we expect execution to ramp up, gross margins to expand and working capital to improve with the completion of legacy projects. BHEL continues to report subdued set of results due to subpar execution.
However, we expect a ramp up in execution from FY26E onwards. We maintain 'Buy' on the stock with a target price of Rs 370.
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