August 8, 2025

Bharat Heavy Electricals Ltd (BHEL) shocked the market by posting a huge consolidated net loss of Rs 455.50 crore in the first quarter of FY26. This loss is more than double the Rs 211.40 crore loss it faced in the same quarter last year. But why the sudden deep dive? While BHEL’s total income rose slightly from Rs 5,581.78 crore in Q1FY25 to Rs 5,658.07 crore this year, its expenses jumped sharply to Rs 6,279.78 crore from Rs 5,874.98 crore. This steep rise in expenses crushed their profits and pushed the company deeper into the red. The stock didn’t enjoy the news either. BHEL shares dropped 4.7% to hit a low of Rs 228.30 on the Bombay Stock Exchange (BSE) on Thursday, rattling investors. Adding to the worries are BHEL’s unpaid dues. The company revealed that Rs 211 crore is stuck as overdue payments from STPG in Sudan, which is locked in a civil war. BHEL said this amount has been considered good debt and not provided for, after board approval. Furthermore, Rs 185 crore remains unpaid by Rajasthan Rajya Vidyut Utpadan Nigam Ltd (RVUNL) related to the Suratgarh power project. BHEL said making a provision for this isn’t wise because RVUNL has extended delivery dates and assured payment. They noted, “Customer (RVUNL) has paid an amount of Rs 90 Cr in FY 2025-26 (till 31.07.25) out of which Rs 50 crore is received on July 21, 2025.” When it comes to the stock outlook, Trendlyne shows an average target price of Rs 233 for BHEL, indicating a 3% drop from current levels. Analysts remain cautious with a ‘Hold’ rating from 18 experts. BHEL shares closed 3.4% lower at Rs 239.6 on Wednesday, underperforming the broader Sensex, which fell 0.21%. The stock has lost 17% over the last year but gained a sparkling 142% in the past two years. With a market capitalization of Rs 83,447 crore, BHEL remains a heavyweight, but the current losses and trade receivables hang heavy over its future. So, while BHEL’s revenues creep up, mounting expenses and delayed payments from customers are the dark clouds on their sunny business forecast. Investors and market watchers will have to keep a close eye on how BHEL tackles these challenges in the coming quarters.

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Tags: Bhel, Q1 fy26 results, Net loss, Trade receivables, Stock performance, Rvunl,