Stock Research Note
Bharat Heavy Electricals Ltd (BHEL)
This stock Research Report is aimed to find out if the stock is at a cheap valuation or not.
Basic Details
Detailed Research
| Stock Name | Bharat Heavy Electricals Ltd (BHEL) |
| NSE Code | BHEL |
| Current Price | Rs 418 (as on 26 Aug 2026) |
| 1 Year Performance | UP about 90% (not down) – stock has rallied hard, from ~Rs 220 to ~Rs 418 |
| Down from All-Time High | ~6% (52-week high Rs 446.50 is also close to being a fresh all-time high, old 2007 record of Rs 390 has already been broken) |
PE Ratio Check
| Current PE | ~60x (varies 60x-90x depending on source/EPS basis used) |
| PE 1 Year Ago | Not meaningful – company was posting near-zero or negative EPS in some quarters back then |
| 3-Year Average PE | Not reliably available – earnings have been too lumpy (losses to profit) for a stable average to mean much |
| 5-Year Average PE | ~126x -> current PE is about 52% below this |
Detailed Research
This one needs more explanation than a straight number. BHEL was posting losses or near-zero profits as recently as FY22-23. When a company goes from loss-making to profitable, PE swings around wildly and older averages (like the 126x 5-year figure) get skewed by those bad years. So the “52% cheap” figure looks dramatic, but it’s not really comparing like with like.
Sales Growth & Profit Growth (Last 5 Years)
Rs Crore, as reported, rounded off:
This is actually the most important chart in this report. BHEL was loss-making in FY22 and FY23, turned profitable in FY24, and profit has grown sharply since – FY26 profit was up almost 200% YoY. Sales have grown at a healthy pace too (~19% in FY26), helped by a strong order book in power and green hydrogen segments. But return on equity is still weak (around 3% over 3 years), which tells me the profit jump hasn’t fully translated into efficient use of capital yet.
Conclusion – Cheap or Not?
BHEL is currently trading at roughly 52% below its 5-year average PE. However, this figure needs to be read with caution rather than taken at face value. BHEL was loss-making or barely profitable as recently as FY22-23, and when a company transitions from losses to strong profitability, historical PE averages get skewed by those weak years, making the current discount look larger than it really is.
In our view, BHEL is NOT undervalued in the way the raw PE discount suggests. The stock price has already rallied close to 90% over the past year, indicating the market has largely priced in the turnaround already. It looks more like a re-rating growth story built on an improving order book, and combined with a still-weak return on equity, we would want to see a few more consistent profitable quarters before placing confidence in this “cheap” label.
Disclaimer
All data used in this report has been collected from various publicly available websites (Screener, Trendlyne, Dhan, Tickertape, Kotak Neo, Business Standard, TipRanks, company filings, etc). Enough precaution has been taken to present this data correctly, but figures can vary slightly across sources depending on the date and data basis used.
This report has been prepared purely for educational purposes as part of a research practice exercise. It is NOT a stock recommendation, and should not be treated as investment advice. Please do your own due diligence or consult a registered financial advisor before making any investment decision.
Research By
Gantavya
Research & Market Analysis Intern