Bharat Heavy Electricals Ltd. (BHEL) was listed on the BSE on November 12, 1991. In the last five years, it has given a massive return of more than 400%. Will BHEL continue to provide such impressive returns in 2025 and upcoming years as well? In this article, we will explore the BHEL share price target from 2025 to 2050.
About BHEL
Bharat Heavy Electricals Limited (BHEL) is an Indian public-sector company that manufactures electrical equipment such as turbines, generators, and transformers. The company was established in 1964 to address the country’s growing power demand. BHEL develops, manufactures, and distributes a wide range of products and services for the power, industry, transportation, and defence sectors. It is one of the leading engineering firms in India and plays a vital part in creating the country’s infrastructure by supplying equipment and services for electricity generation and distribution.
BHEL Business Model
- Power Plant Equipment Manufacturing: BHEL manufactures turbines, boilers, and generators for power plants in India and around the world.
- Turnkey Project Execution: BHEL provides entire power plant solutions, including design, engineering, construction, and commissioning.
- Maintenance, Repair, and After-Sales Services: Bhel offers maintenance, repair, and after-sales services to power plants and other industrial projects.
- Defence Equipment: BHEL manufactures and distributes radar systems, naval equipment, and other high-tech products to the Indian defence sector.
- Renewable Energy Solutions: BHEL is investing in the renewable energy sector, providing equipment and services for solar, wind, and hydropower plants.
BHEL Fundamental Analysis
| Stock Name | BHEL Ltd. |
|---|---|
| Market Cap | ₹ 67,674 Cr. |
| 52W High | ₹ 335 |
| 52W Low | ₹ 185 |
| Stock P/E | 130 |
| Book Value | ₹ 69.5 |
| Dividend Yield | 0.13% |
| ROCE | 3.37% |
| ROE | 1.13 % |
| Face Value | ₹ 2.00 |
| Shareholders | March 2023 | March 2024 | Dec 2024 |
|---|---|---|---|
| Promoters | 63.17% | 63.17% | 63.17% |
| FIIs | 8.58% | 8.76% | 7.98% |
| DIIs | 15.50% | 15.95% | 15.49% |
| Public | 12.76% | 12.14% | 13.36% |
| No. of Shareholders | 10,16,936 | 14,99,202 | 20,83,026 |
Key Factors Driving BHEL Future Growth
- Increasing Demand for Power Plants: As India expands and modernises, the demand for new power plants grows. BHEL will benefit from this growing demand by offering equipment and services for the new facilities.
- Focus on Renewable Energy: BHEL is expanding into renewable energy, such as solar and wind power. This shift toward renewable energy sources has the potential to drive future growth and create new market opportunities.
- Government Support for Infrastructure: As the Indian government focuses on infrastructure development, particularly power generation, BHEL stands to benefit from contracts and projects in this sector.
- Global Expansion: BHEL is expanding its reach in foreign markets by exporting products and providing services in Asia, Africa, and beyond. This could increase its revenue from international markets.
- Technological Advancements: BHEL is investing in research and development to improve its products and services. By implementing innovative technologies, BHEL can offer better solutions to its clients, which allows it to expand in a competitive market.
- Strategic Partnerships: By combining with other companies, particularly those in the renewable energy and defence sectors, BHEL could grow its product portfolio and improve its market share.
Pros of Investing in BHEL
- Strong Order Book: As of September 2024, BHEL’s order book has grown by 44.1% year-over-year, including significant contracts like a ₹13,300 crore order for the Koderma thermal power station and an ₹11,000 crore deal from Adani Power.
- Increased Institutional Support: In the December 2024 quarter, domestic institutional investors have raised their holdings in BHEL to 15.49% from 14.69% in September 2024, indicating growing confidence in the company’s future.
- Strategic Shift Towards Renewable Energy: BHEL is focusing on renewable energy projects to take advantage of India’s ₹40 trillion energy infrastructure investment over the next decade.
Cons of Investing in BHEL
- Declining Foreign Institutional Investment: Foreign Institutional Investors (FIIs) reduced their holdings in BHEL from 9.49% in September 2024 to 7.98% in December 2024, suggesting decreased confidence among foreign investors.
- Dependence on the Power Sector: A significant portion of BHEL’s revenue comes from the power sector. Challenges in this sector, like project delays and financial issues among state power utilities, can negatively impact the company’s performance.
- Low ROCE: BHEL has a low Return of Capital Employed (ROCE) of 3.37%.
- Low ROE: BHEL has a low return on equity of 2% over the last 3 years.
- No Sales Growth: Over the last five years, BHEL’s sales growth has been poor, at -5%.
- High Valuation: BHEL stock is trading at a PE ratio of 130, which is higher compared to its peers.
| Years | Target Price |
|---|---|
| BHEL Share Price Target 2025 | ₹250 to ₹280 |
| BHEL Share Price Target 2026 | ₹300 to ₹365 |
| BHEL Share Price Target 2027 | ₹360 to ₹475 |
| BHEL Share Price Target 2028 | ₹430 to ₹620 |
| BHEL Share Price Target 2029 | ₹520 to ₹800 |
| BHEL Share Price Target 2030 | ₹625 to ₹1050 |
| BHEL Share Price Target 2035 | ₹1250 to ₹2800 |
| BHEL Share Price Target 2040 | ₹2500 to ₹5000 |
| BHEL Share Price Target 2050 | ₹10000 to ₹18000 |
Conclusion
BHEL has experienced significant growth in recent years, thanks to a strong order book, increased government support, and an expansion into renewable energy. However, challenges like dependence on the power sector, declining foreign investments, and low return ratios remain concerns. While BHEL’s future looks promising with India’s infrastructure development plans and technological advancements, investors should carefully consider both the opportunities and risks before making investment decisions. For latest information, visit BHEL official website.
Disclaimer
This article is for educational purposes only. It is not a stock recommendation and should not be treated as such. Please ask your financial advisor before making any investment decision.
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