BHEL shares' 85% returns, strong earnings fuel ownership churn as retail trims while FIIs, MFs raise exposure

State-run Bharat Heavy Electricals Limited (BHEL) has witnessed an ownership churn, with retail holding declining by 141 basis points over the last two quarters, while institutional ownership has risen during the same period. Foreign Institutional Investors (FIIs) increased their stake by 100 basis points, while mutual funds aggressively bought the stock, raising their holding by 530 basis points in the same period.

Retail investors together held 8.93% or over 31 crore shares in the PSU company as of March 31, 2026 compared to 10.34% (35.99 crore) at the end of the September quarter. At the same time, FII holding has gone up to 7.2% in March quarter versus 6.2% in the September quarter. As for MFs, ownership jumped from 7.6% in Q2FY26 to 12.9% in Q4FY26. In the March quarter, they added stake by 410 bps.

While BHEL's run on the D-Street has remained stellar, delivering 85% in the past one year backed by strong earnings. It is also the top PSU stock in terms of last one month's gains (60%), eclipsing Hindustan Copper and National Aluminium Company (NALCO), whose returns stand at 13% and negative 2%, respectively, in the same period.


Both Hindustan Copper and NALCO are multibaggers, returning 168% and 155% over a one year period.

BHEL is exhibiting massive bullish momentum and picked up further momentum post its Q4FY26 earnings, said Dr. Ravi Singh, Chief Research Officer from Master Capital Services. "Technically, this fundamental catalyst has triggered a violent parabolic breakout above the critical 322.80 resistance level, backed by heavy institutional volume," he reasoned.

BHEL shares hit a fresh 52-week high of Rs 408.35 on the NSE, surging 8% in the last couple of sessions.

The PSU company which manufactures power equipment and also has business interests in the aerospace sector, reported a whopping 156% YoY surge in its consolidated net profit to Rs 1,290.50 crore for the January-March quarter of the financial year 2026. Sequentially, net profit zoomed nearly 231% from the Rs 390.40 crore reported in the third quarter of the financial year 2025-26.

BHEL’s revenue from operations grew 37% YoY to Rs 12,310 crore in Q4 FY26, from Rs 8,993 crore in Q4 FY25. The company’s EBITDA more than doubled to Rs 2,005 crore during the quarter under review, from Rs 990 crore in the year-ago period.

After reporting a net loss of Rs 456 crore in Q1FY26, the company has delivered a strong sequential recovery in earnings, while revenue has continued to grow for the past seven consecutive quarters.

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What should investors do?

Dr. Singh said BHEL's stellar earnings were driven by robust execution in the power segment and sharp EBITDA margin expansion. While the rally is backed by heavy institutional volume, the stock is running "incredibly hot and entering pure price-discovery mode," he warned.

"The broader structural uptrend—supported by the rising trendline from late 2025—remains firmly intact, but traders should be cautious of chasing this vertical rally. The previous resistance at 322.80 now acts as a formidable foundational support. For fresh entries, waiting for a minor consolidation or a healthy pullback offers a much safer risk-reward setup," he added.

Nuvama Institutional Equities retained its ‘Buy’ rating on BHEL calling its Q4FY26 performance strong, driven by robust execution growth of nearly 37% and a sharp 500 basis point expansion in EBITDA margins to 14.2%.

Although fresh order inflows declined 18.8% in FY26 due to a high base, BHEL’s order backlog remained healthy at Rs 2.4 lakh crore, equivalent to 7.1 times FY26 sales, the brokerage noted. It has also highlighted a 56% YoY jump in cash reserves to Rs 11,870 crore, supported by improved profitability and working capital trends.

Nuvama expects execution-led margin expansion to drive a 76% EPS CAGR over FY26–28E and raised its target price on the stock to Rs 450 from Rs 353.

(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)