BHEL Q1 FY25-26 presentation: Widening losses amid robust order book growth

Introduction & Market Context

Bharat Heavy Electricals Limited (NSE:BHEL), India’s premier engineering and manufacturing company, released its Q1 FY25-26 financial results on August 6, 2025, revealing a complex picture of operational challenges and strategic growth. The company, which plays a critical role in India’s power and industrial sectors, continues to advance its "Powering India, Towards Viksit Bharat" mission despite financial headwinds.

BHEL’s stock has shown resilience in recent trading, with shares closing at ₹319.45 on August 11, 2025, representing a 0.47% increase. The company’s stock has traded between ₹234.01 and ₹376.00 over the past 52 weeks, reflecting market volatility in the capital goods sector.

Quarterly Financial Performance

BHEL’s Q1 FY25-26 financial results paint a challenging picture, with the company reporting deepening losses despite stable revenue. Revenue from operations remained essentially flat at ₹5,487 crore compared to ₹5,485 crore in the same quarter last year.

However, profitability metrics deteriorated significantly:

• EBITDA declined to ₹(352) crore from ₹(59) crore in Q1 FY25
• Profit Before Tax fell to ₹(607) crore from ₹(280) crore
• Profit After Tax decreased to ₹(455) crore from ₹(213) crore

As shown in the following financial data table:

The widening losses come despite BHEL’s strong order book and new business acquisitions, suggesting operational challenges and potential cost pressures affecting the company’s bottom line.

Order Book Analysis

Despite financial challenges, BHEL demonstrated robust order acquisition capabilities, securing new orders worth ₹13,445 crore during Q1 FY25-26. The power sector contributed 57% (₹7,620 crore) of new orders, while industry and exports accounted for 43% (₹5,825 crore).

The company’s total order book stood at an impressive ₹2,04,375 crore as of June 30, 2025, providing substantial revenue visibility for the coming years. The power sector dominates the outstanding order book at 79% (₹1,61,686 crore), with industry and exports comprising the remaining 21% (₹42,689 crore).

As illustrated in the following order book composition charts:

Notable new orders secured during the quarter include the supply and commissioning of 6x800 MW Steam Turbine Generators, design and execution of 6,000 MW HVDC terminals in consortium with a global OEM, and various transformer orders from utilities. The company also secured its first major order from New Space India Ltd. (ISRO’s commercial arm) for 5,733 Li-ion cells, demonstrating diversification into new technology areas.

The following slide details these significant new orders:

Operational Highlights

BHEL achieved several significant operational milestones during Q1 FY25-26, particularly in power plant commissioning. Key capacity additions included the 700 MWe Unit 7 of Rawatbhata Atomic Power Plant, 660 MW Unit 3 of North Karanpura STPP, and hydroelectric projects in India and Bhutan.

The company also successfully synchronized multiple power generation units, including the 660 MW Unit 5 of Sagardighi TPP and smaller units for industrial clients.

These operational achievements are detailed in the following slide:

Strategic Initiatives & Future Outlook

BHEL’s strategic initiatives received high-profile government support during the quarter. The Prime Minister of India laid the foundation stone for an 800 MW Ultra-Supercritical Thermal Power Plant at Yamunanagar, Haryana, where BHEL serves as the EPC contractor. Additionally, the Prime Minister inaugurated the New Pamban Bridge, India’s first vertical lift railway sea bridge, which benefited from BHEL’s welding expertise.

The company continues to forge strategic partnerships to enhance its technological capabilities and market reach. Notable agreements include a partnership with Nuovo Pignone International for compressor revamp opportunities in India’s fertilizer sector and a Technology Transfer Agreement with BARC for Mixed-Matrix Membrane Diaphragm technology for electrolyser systems.

These strategic initiatives are highlighted in the following slide:

BHEL’s commitment to excellence was recognized through multiple awards during the quarter, including the ’CFO Outstanding Performer Award’ for Director (Finance) Rajesh Kumar Dwivedi and the ’ICMAI National Award for Excellence in Cost Management – 2024’. The company also received recognition for its digital transformation initiatives and environmental sustainability efforts.

As shown in the following awards and accolades slide:

Looking ahead, BHEL faces the challenge of reversing its financial losses while leveraging its strong order book to drive future growth. The company’s strategic diversification into new sectors and technologies, coupled with government support for infrastructure development, positions it to potentially benefit from India’s push toward becoming a developed nation by 2047.

However, investors should monitor the company’s ability to improve operational efficiency and profitability in coming quarters, as the widening losses despite stable revenue raise concerns about cost management and project execution capabilities.

Full presentation:

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