Nuvama has maintained its buy rating on Bharat Heavy Electricals Limited with a target price of ₹353 per share, even as the company reported a weaker-than-expected December quarter.
The brokerage noted that Q3 PAT missed estimates, largely due to the execution of low-margin legacy projects, which continued to weigh on profitability. However, Nuvama believes these issues are transitory and do not undermine the company’s improving medium-term fundamentals.
Order inflows remained strong, rising 53% year-on-year, with the overall order backlog standing at ₹2.2 lakh crore, providing robust revenue visibility. Despite this, Nuvama has cut FY26 EPS estimates by 21%, reflecting near-term execution challenges and margin pressures.
Looking ahead, the brokerage expects FY27 to mark a turnaround year, supported by a healthier order mix, easing legacy project burden and operating leverage from higher execution volumes. Strong inflows in the power and industrial segments are expected to support margin recovery over time.
Nuvama believes the current phase represents a transition period and continues to see value in the stock based on its long-term execution potential.
Disclaimer: The views and recommendations above are those of Nuvama. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
