Segment-wise, power revenue grew 17 per cent Y-o-Y and industry revenue grew 45 per cent Y-o-Y. Earnings before interest and tax (Ebit) margin for power was up 247 basis points Y-o-Y to 13 per cent, while for the industry business, it improved to 19.5 per cent, up 423 basis points Y-o-Y. Working capital came down to 141 days versus 164 days in FY26 due to better collections of Rs 13,200 crore, up 33 per cent Y-o-Y. Lower finance costs of Rs 120 crore versus Rs 200 crore in Q2FY26 and Rs 140 crore in Q1FY27 were another positive. Higher other income, up 42.9 per cent Y-o-Y to Rs 260 crore, also pushed up net profit.
The order book stands at Rs 2.6 trillion. Bhel also announced a capex of Rs 500 crore and started hiring in some categories after almost 15 years. A strong pipeline and good net cash (Rs 4,600 crore) are both positive signs as well. Most analysts are upgrading the stock given better execution and clear visibility of future revenue.
Bhel received orders worth Rs 4,000 crore during Q2FY27 (Rs 30,000 crore in H1FY27). The Y-o-Y inflow declined 82 per cent due to a high base effect. The thermal-to-non-thermal mix of the order book stands at 73 per cent to 27 per cent. Of the total order book of Rs 2.6 trillion, Rs 70,000 crore is from non-thermal sectors like nuclear, transmission, defence, transportation, coal gasification, hydro and services. Order inflow should be Rs 60,000 crore in FY27 and higher in FY28. There are new scalable opportunities in nuclear and coal gasification. Currently, 47,545 megawatts (MW) of thermal capacity (including 4,845 MW of stressed projects) is under construction. Contracts for 16,000 MW have been awarded and another 34 gigawatts (GW) of projects are to be awarded as per the plan to add 97 GW by 2032, which may be further upgraded. That’s a stable pipeline in thermal.
Bhel added 2,260 MW of capacity during H1FY27 against a target of 4,790 MW in FY27. Bhel has announced Rs 500 crore capex for additional manufacturing facilities for thermal and nuclear sets at its Haridwar plant. Further, the company has released a notification for the recruitment of 660 artisans across nine manufacturing units, following an earlier notification for the recruitment of 515 artisans in July 2025. Such recruitment last occurred in 2011, so the company may be addressing some key bottlenecks and constraints.
The power segment remained the key growth driver, registering 17 per cent Y-o-Y revenue growth, underpinned by the execution of its robust order book of Rs 2.1 trillion.
Order wins across hydroelectric projects, including Heo and Tato-I, along with an FR6B gas turbine order, further strengthen its presence across hydro and gas-based power generation. The industrial segment also delivered strong growth, with revenue rising 45 per cent Y-o-Y, while a non-thermal order book of Rs 70,000 crore provides diversification options. Expansion into synchronous condensers, green hydrogen electrolysers, high-voltage direct current (HVDC) energy transmission, green energy corridors, defence and rail mobility broadens the total addressable market.
Signs of better execution, margin recovery and diversification beyond thermal all point to a better growth outlook, but timely, sustained execution is a key monitorable. The large thermal power order pipeline, diversification into sectors like railways, defence, green hydrogen and coal gasification, and growing exports all augur well. Disciplined working capital management will be another monitorable, though that also shows signs of improvement.
Most of the execution improvement came in the industry segment, and gross margin is above guidance of 35 per cent. The capex of Rs 500 crore is low, given the size of the business and a balance sheet with good net cash, and this could lead to capacity constraints. Industry-wide challenges could result in a slowdown in thermal project execution, which would obviously impact Bhel adversely. The entry of Chinese suppliers, JSW Toshiba, L&T and Thermax into its core thermal equipment segment means higher competitive intensity. The stock is up substantially, while several analysts are saying valuations are too high for comfort.
