Newsletter
Imagine this...
You're running one of India’s oldest engineering giants. You've built power plants across the country, helped electrify trains, and supplied critical components to nuclear stations. But now, the world’s moving on. Green energy is replacing coal. Satellites are replacing smoke stacks. And suddenly, the question isn’t “Can you build?” It’s “Can you adapt?”
That’s exactly where BHEL finds itself today. And if you open up their Q1 FY26 results, you’ll see the plot thickening.
To be fair, this quarter wasn’t a blockbuster by any stretch. Revenue came in at ₹5,487 crore, more or less flat compared to the same quarter last year, but nearly 40% down from March. Profit? Well, that turned into a loss of ₹455 crore, reversing from a ₹504 crore profit in Q4. Operating losses widened too, with negative EBITDA of ₹352 crore. And it’s not like there was a one-off shock. This was mostly operational. Execution dipped. Fixed costs piled up. And the result was an all-too-familiar red bottom line.
But here’s the thing: if you stopped reading there, you’d miss the real story.
Because while the P&L looks shaky, BHEL’s order book is booming.
In the June quarter alone, the company bagged ₹13,445 crore worth of new orders, pushing its total backlog to ₹2,04,375 crore. That’s almost 2.5 times its annual revenue; a signal that clients, across sectors, still see value in what BHEL can deliver. From six 800 MW steam turbine generators to a mammoth 6,000 MW HVDC terminal project in Bhadla-Fatehpur, the scale of deals is impressive.
And then came the twist no one saw coming.
BHEL received its first commercial Li-ion battery order. Yes, you read that right. Not from an auto company, not from a battery startup, but from New Space India Ltd., the commercial arm of ISRO. It’s a 5Ah Li-ion cell order, small in size, huge in symbolism. For a company best known for building coal-fired boilers, this is a sign of something shifting. They’re not just making turbines anymore. They’re entering the race for India’s clean energy future.
And if you zoom out, the transition is visible elsewhere too.
BHEL contributed welding tech to the new Pamban vertical lift bridge, a first-of-its-kind rail sea bridge in India. It’s the EPC contractor for the upcoming 800 MW ultra-supercritical thermal plant in Yamunanagar, and it signed a technology transfer deal with BARC for advanced membranes used in electrochemical cells, the kind that go into green hydrogen electrolysers. There’s even a new MoU with Nuovo Pignone International, aimed at modernising compressors in fertiliser plants. Bit by bit, BHEL is planting flags in tomorrow’s markets.
That said, transitions are messy. And this one is no exception.
Even with this surge in orders, the power segment posted a ₹510 crore loss before tax and finance cost this quarter. The industry division, which includes exports and new-age tech, fared better, clocking a ₹307 crore pre-tax profit. But legacy costs, receivables, and low margins continue to drag.
Take the case of Sudan. BHEL has an overdue payment of ₹211 crore stuck there, due to legacy exposure that’s been frozen due to civil war. Another ₹185 crore is stuck in a long-running power project in Suratgarh, Rajasthan, which is now three years overdue. The management hasn't provided for these yet, citing progress in payments, but it remains a cloud over its receivables.
And then there’s the debt. Not heavy by PSU standards, around ₹2,100 crore in commercial paper, all paid on time but still something to watch. With losses piling up, net worth dipped from ₹25,113 crore last quarter to ₹24,624 crore. Cash flow from operations wasn’t disclosed this quarter, but it's been under pressure for several quarters now.
So what happens next?
That depends on whether BHEL can convert its order book into margins. Execution will be key. Large power and infra projects are notorious for delays, cost overruns, and late payments. With ₹2 lakh crore worth of work in the pipeline, even small slippages could sting.
It also depends on how fast the new bets scale. Li-ion orders are great, but unless they become mainstream revenue drivers, they’ll stay symbolic. The same goes for green hydrogen and HVDC tech. These are future-forward, but they’re also crowded markets, and BHEL is not the only one vying for a slice.
Still, there's reason to be cautiously optimistic. If the ISRO partnership expands, if HVDC becomes a global success story, and if the company gets a better grip on costs, the narrative could flip. After all, very few companies have BHEL’s legacy, balance sheet, or institutional backing to rewire their story.
For now, this quarter feels like a pause. Not a victory lap. Not a crisis either. Just a quiet checkpoint in a much bigger transformation.
The kind of checkpoint where you're not judged by profit, but by how convincingly you’re building for the future.
And if BHEL gets that part right, the numbers will follow.
FAQs
What was BHEL’s revenue and profit in Q1 FY26?
BHEL reported revenue of ₹5,487 crore in Q1 FY26, flat year-on-year but down nearly 40% from the previous quarter. The company posted a net loss of ₹455 crore, reversing from a ₹504 crore profit in Q4 FY25.
Why did BHEL post a loss in Q1 FY26?
The loss was driven mainly by lower execution of projects, high fixed costs, and operational inefficiencies. There were no major one-off shocks, but margins remained under pressure.
How large is BHEL’s order book as of June 2025?
BHEL’s order book stood at ₹2,04,375 crore at the end of Q1 FY26, with ₹13,445 crore worth of new orders booked during the quarter.
What are BHEL’s major recent project wins?
Key wins include six 800 MW steam turbine generators, a 6,000 MW HVDC terminal project in Bhadla-Fatehpur, and multiple EPC contracts in the power sector.
What is BHEL’s first Li-ion battery order about?
BHEL received its first commercial Li-ion battery order from New Space India Ltd., ISRO’s commercial arm, for 5Ah Li-ion cells. It marks the company’s entry into the energy storage segment.
How is BHEL diversifying beyond thermal power?
BHEL is entering sectors like green hydrogen, high-voltage direct current (HVDC) transmission, lithium-ion batteries, advanced membrane technology, and infrastructure projects like the Pamban vertical lift bridge.
What challenges is BHEL facing with receivables?
BHEL has ₹211 crore stuck in Sudan due to the civil war and ₹185 crore delayed in the Suratgarh project, which is three years overdue. These remain unresolved payment issues.
What is BHEL’s current debt position?
BHEL’s debt is modest at around ₹2,100 crore in commercial paper, all repaid on time. However, net worth declined to ₹24,624 crore in Q1 FY26 due to accumulated losses.
What are the key risks to BHEL’s future performance?
Execution delays, cost overruns, low-margin contracts, overdue receivables, and slow scaling of new businesses like green hydrogen and Li-ion batteries are key risks.
What could drive BHEL’s turnaround in the coming years?
Improved execution of the ₹2 lakh crore order book, scaling up clean energy projects, expanding partnerships with ISRO, and controlling costs could help BHEL return to sustained profitability.
