BHEL’s Q1 Loss Deepens to Rs 455 Crore Despite Stable Revenue: Power Segment Under Pressure

Bharat Heavy Electricals Ltd (BHEL), India’s leading public sector engineering and manufacturing enterprise, reported its financial results for the first quarter of FY26, revealing a widening net loss despite flat revenue from operations. The company’s performance was notably impacted by weak demand in its core power segment, exacerbated by seasonal and macroeconomic factors.

 

Key financial highlights for Q1 FY26:  

- Net loss widened to Rs 455.5 crore from Rs 211.4 crore in Q1 FY25  

- Revenue from operations remained nearly flat at Rs 5,486.91 crore  

- EBITDA loss surged to Rs 537.14 crore from Rs 169.35 crore year-on-year  

- Power segment revenue declined 5.6 percent to Rs 3,898.86 crore

 

Revenue holds steady, but profitability erodes  

BHEL’s total revenue from operations for the quarter ended June 30, 2025, stood at Rs 5,486.91 crore, marginally higher than Rs 5,484.92 crore recorded in the same period last year. However, the company’s bottom line took a hit, with net losses more than doubling year-on-year.  

- The flat revenue indicates stagnation in order execution and limited growth in new contracts  

- Rising input costs and subdued demand in key sectors contributed to the erosion in profitability

 

Power segment drags overall performance  

The power segment, which forms the backbone of BHEL’s business, was the primary contributor to the company’s weak results.  

- Revenue from the power division fell to Rs 3,898.86 crore from Rs 4,128.10 crore in Q1 FY25  

- Net loss from the segment widened sharply to Rs 510 crore, compared to Rs 53.97 crore last year  

- The decline was attributed to lower electricity demand and delayed project execution due to early monsoon conditions

 

Cost pressures and operational challenges  

BHEL’s total expenses rose nearly 7 percent to Rs 6,280 crore, driven by a 10.8 percent increase in raw material and service costs.  

- The mismatch between rising costs and stagnant revenue intensified the company’s operating losses  

- EBITDA loss ballooned to Rs 537.14 crore, reflecting deteriorating margins and inefficiencies in cost control

 

Stock market reaction and investor sentiment  

Following the announcement, BHEL’s stock closed 3.39 percent lower at Rs 239.65 on the BSE, signaling investor disappointment.  

- The stock touched an intraday low of Rs 238.55 and a high of Rs 249.75 during the trading session  

- Market capitalization stood at Rs 83,447.65 crore, with analysts expressing concern over the company’s near-term outlook

 

Comparative performance and historical context  

- In the previous quarter (Q4 FY25), BHEL had posted a net profit of Rs 504.05 crore, highlighting the volatility in its earnings  

- The company’s earnings per share had improved to Rs 1.45 in Q4, but the current quarter’s loss reversed that trend  

- The stock had reached a 52-week high of Rs 305.80 in August 2024 and a low of Rs 176.00 in March 2025

 

Strategic outlook and future prospects  

Despite the current setback, BHEL remains a critical player in India’s infrastructure and energy sectors.  

- The company’s order book is expected to cross Rs 2 lakh crore, offering long-term visibility  

- Analysts suggest that a revival in power demand and improved execution could restore profitability in subsequent quarters  

- Focus on diversification, digital transformation, and international projects may help mitigate domestic headwinds

 

Sources:  

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