Shares of state-owned Bharat Heavy Electricals (BHEL) fell over 4% on Thursday despite the company reporting a more than two-fold jump in consolidated net profit for the September quarter, as brokerages flagged expensive valuations and rising competition in thermal equipment.
The stock was trading at Rs 444.30, down 4.25%, at 9:59 am on Wednesday.
BHEL on Wednesday reported consolidated net profit of Rs 820.94 crore for Q2FY27, compared with Rs 374.89 crore in the year-ago quarter. Total income rose 24% to Rs 9,553.01 crore from Rs 7,686.11 crore.
Revenue from the power business increased to Rs 6,637.90 crore from Rs 5,675.64 crore, while industry revenue rose to Rs 2,662.45 crore from Rs 1,836.16 crore. Expenses stood at Rs 8,482.40 crore, compared with Rs 7,201.54 crore a year earlier.
CLSA maintained its 'Underperform' rating on BHEL and raised its target price to Rs 351 per share. The brokerage noted that Q2FY27 revenue grew 24% year-on-year and EBITDA margin expanded 330 basis points to 11%, beating expectations. However, it said the "strong Q2 performance is largely priced in", noting that the stock had risen 8% over the past month.