⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
BHEL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.4
| Stock Code | BHEL | Market Cap | 90,569 Cr. | Current Price | 260 ₹ | High / Low | 306 ₹ |
| Stock P/E | 113 | Book Value | 71.2 ₹ | Dividend Yield | 0.19 % | ROCE | 4.75 % |
| ROE | 2.00 % | Face Value | 2.00 ₹ | DMA 50 | 262 ₹ | DMA 200 | 256 ₹ |
| Chg in FII Hold | 0.05 % | Chg in DII Hold | 1.08 % | PAT Qtr | 382 Cr. | PAT Prev Qtr | 368 Cr. |
| RSI | 50.0 | MACD | -1.47 | Volume | 43,30,361 | Avg Vol 1Wk | 99,84,729 |
| Low price | 193 ₹ | High price | 306 ₹ | PEG Ratio | 15.7 | Debt to equity | 0.44 |
| 52w Index | 59.3 % | Qtr Profit Var | 207 % | EPS | 2.30 ₹ | Industry PE | 33.0 |
📊 Financials
- Revenue Growth: Improving, PAT rose from 368 Cr. to 382 Cr. (+207% YoY growth)
- Profit Margins: Weak, EPS only 2.30 ₹ despite large market cap
- Debt Ratios: Debt-to-Equity 0.44, moderate leverage
- Cash Flows: Supported by government contracts, but efficiency is low
- Return Metrics: ROE 2.0%, ROCE 4.75% — very poor compared to peers
💹 Valuation
- P/E Ratio: 113 (extremely high vs Industry PE 33.0)
- P/B Ratio: ~3.65 (reasonable, but valuation stretched due to earnings weakness)
- PEG Ratio: 15.7 (indicates overvaluation relative to growth)
- Intrinsic Value: Current price (260 ₹) near DMA 50 (262 ₹) & DMA 200 (256 ₹), showing consolidation
🏢 Business Model & Competitive Advantage
- Government-backed engineering & heavy electricals company
- Strong presence in power, defense, and infrastructure projects
- Competitive advantage lies in scale and government support
- Weak profitability metrics limit overall efficiency
📈 Entry Zone Recommendation
- Entry Zone: 240–260 ₹ (near DMA support levels)
- Long-Term Holding: Suitable only for investors betting on government infrastructure push; valuations are risky given weak returns
✅ Positive
- Strong government backing
- Quarterly profit growth (+207% YoY)
- DII holding increased (+1.08%)
- Stock trading near support levels
⚠️ Limitation
- Extremely high P/E ratio (113)
- Weak ROE (2.0%) and ROCE (4.75%)
- Debt-to-Equity at 0.44, higher than debt-free peers
📉 Company Negative News
- Profitability remains weak despite revenue growth
- Valuation stretched far above industry average
📈 Company Positive News
- DII holding increased (+1.08%)
- FII holding slightly increased (+0.05%)
- Quarterly PAT improved marginally
🏭 Industry
- Heavy engineering sector supported by government infrastructure spending
- Industry PE at 33.0, BHEL trades at a steep premium
🔎 Conclusion
BHEL is a government-backed engineering giant with strong industry presence but weak profitability metrics. Despite revenue growth, ROE and ROCE remain poor, and valuations are extremely stretched with a P/E of 113. Entry around 240–260 ₹ may be considered for long-term investors banking on infrastructure growth, but caution is advised due to low efficiency and high valuation risk.