BHEL Cracks On Q1 Miss; SEBI Analysts Caution On Execution Woes, Technical Weakness

Analysts flagged technical and fundamental red flags but noted support from a strong order book and industrial gains.

Shares of Bharat Heavy Electricals (BHEL) slumped over 6% Thursday after the company reported a sharp first-quarter (Q1) earnings decline, swinging to a loss amid poor execution and pressure from the power segment. 

SEBI-registered analysts Rajneesh Sharma and Saurabh Sahu flagged technical and fundamental red flags but noted support from a strong order book and industrial gains.

Earnings Review

BHEL posted a consolidated net loss of ₹455 crore for the June quarter, reversing from a ₹504 crore profit in Q4 FY25. Revenue came in at ₹5,487 crore, flat year-on-year but down 39% sequentially. 

EBITDA slumped 56.8% year-on-year to ₹159 crore, while margins fell sharply to 2.2% from 4.9% in the previous quarter.

Sahu noted that the power segment recorded a pre-tax loss of ₹510 crore, dragging overall performance, while the industrial segment posted a profit of ₹307 crore. 

He highlighted that the company did not provide for sticky receivables worth ₹211 crore from Sudan and ₹185 crore from Rajasthan Rajya Vidyut Utpadan Nigam Limited’s (RVUNL) Suratgarh project, which would have widened the loss to ₹743 crore had they been provisioned.

Despite the loss, BHEL remains debt-free, with a current ratio of 1.5 and no defaults on its ₹2,100 crore commercial paper. 

Sahu described the quarter as “tough,” flagging red flags in thermal projects, but said the clean balance sheet and gains in the industrial division offered some hope.

Sharma said the Q1 results were weak across revenue, EBITDA, and PAT, adding that execution delays and a lack of operating leverage continued to weigh. 

However, he noted positives in BHEL’s diversification into green energy, defence, and nuclear segments, along with a solid order book and recent MoUs in hydrogen and grid infra.

Technical Breakdown

Sharma said the technical chart shows BHEL is still in a mild corrective phase. A breakout from a falling wedge earlier in 2025 failed to sustain above ₹256.60, with the stock now trading around ₹239.83. 

He flagged that relative strength index (RSI) near 50, low volume, and weak on-balance volume (OBV) suggested no smart money accumulation yet.

Key resistance is now at ₹256.60, while support lies at ₹214.53 and ₹188.92. A breakdown below ₹214 would further weaken the structure. Sharma said the stock’s bounce appeared reactive rather than conviction-driven and that a new trend would need fresh triggers.

Sahu echoed a bearish near-term view, citing open interest expansion during price falls and weak momentum signals. 

His trading setup indicated a short bias with a stop-loss at ₹246–₹248 and targets at ₹230 and ₹225.

On Stocktwits, retail sentiment was ‘extremely bullish’ amid ‘extremely high’ message volume.

BHEL’s stock has declined 3.5% so far in 2025.

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