BHEL Share Price Decline: Investors Concerned Over Double Net Loss in Latest Financial Results
The stock of the renowned government electricity sector company Bharat Heavy Electricals Ltd (BHEL) witnessed a significant drop on Thursday, falling by over 6% right from the start of the day. This decline has left investors uneasy as the company reported a double net loss in its recent financial results. Amidst this downturn, the biggest question arises as to why brokerage firms are still advising to hold or buy this stock.
Quarterly Results Show Loss, Slight Increase in Revenue
BHEL announced its financial results for the first quarter ending June 2025 on Wednesday, revealing a net loss of ₹455.4 crores, compared to ₹211 crores in the same period last year, indicating almost a doubling of losses.
However, there is a slight silver lining as the company’s operational revenue has shown a marginal increase. In this quarter, the company recorded revenue of ₹5,486.9 crores, slightly up from ₹5,484.9 crores in the previous year. The total income has also risen from ₹5,581.78 crores to ₹5,658.07 crores. Yet, expenses have also surged, increasing from ₹5,874.98 crores last year to ₹6,279.78 crores this time.
Analysts Optimistic Despite Stock Decline
Despite the stock plummeting by nearly 25% from its 52-week high, several reputable brokerage houses remain bullish on this stock. According to them, BHEL’s order book is robust, and the company stands to benefit significantly from upcoming infrastructure and energy projects.
Analysts suggest that the current loss is due to temporary operational expenses and transitional challenges. However, as the company’s new projects gain momentum, profits are expected to return.
Potential for Heavy Losses in Selling Pressure
While the company’s losses may be alarming, for long-term investors, this decline could present an opportunity. Brokerage firms believe that in the coming two to three quarters, the company will accelerate its order execution, potentially leading to improvements in revenue and margins.
Therefore, if you are seeking long-term growth rather than short-term returns, keeping an eye on BHEL could be a prudent step.
