Bharat Heavy Electricals Ltd (BHEL) on Wednesday, October 29, reported a sharp turnaround in its July-September quarter results, with consolidated net profit rising nearly threefold to Rs 374.9 crore from Rs 106.2 crore a year earlier. The improvement reflects stronger project execution and better operational efficiency across its key business segments.

Revenue from operations rose 14.1 per cent year-on-year to Rs 7,511.8 crore, up from Rs 6,584 crore a year earlier. Total income for the quarter stood at Rs 7,686 crore, a 15 per cent increase from Rs 6,695 crore in the previous year.

Total expenses rose to Rs 7,202 crore from Rs 6,571 crore in the corresponding quarter, but improved margins and higher volumes helped lift profitability.

Operating margin more than doubles

The company’s earnings before interest, taxes, depreciation and amortisation (EBITDA) more than doubled year-on-year to Rs 580.9 crore from Rs 275 crore. The EBITDA margin expanded to 7.7 per cent in the reporting quarter, compared to 4.2 per cent in the same period last year.

BHEL attributed the improved margin to better project execution, disciplined cost management, and a favourable business mix across its power and industrial segments.

In September, BHEL announced a major order win from M.P. Power Generating Company Ltd (MPPGCL) for the development of two large-scale supercritical thermal power projects in Madhya Pradesh. The order covers Engineering, Procurement and Construction (EPC) works for the 1×660 MW Amarkantak Unit 6 and 1×660 MW Satpura Unit 12 power plants.

The projects, to be executed over 57 months, include equipment supply, civil works, erection and commissioning. The combined contract value is estimated between Rs 13,000 crore and Rs 15,000 crore, excluding taxes and duties. The company clarified that the transactions are domestic and do not fall under related-party agreements.

The quarterly results were announced after market hours on Wednesday, October 29. BHEL’s shares closed 3.39 per cent higher at Rs 245.39 apiece on the National Stock Exchange, outperforming the benchmark Nifty 50 index, which gained 0.45 per cent.

Over the past 12 months, BHEL’s stock has gained 4.4 per cent, and is up 6.9 per cent so far this calendar year. According to Bloomberg data, of the 20 analysts tracking the company, eight recommend a ‘buy’, three suggest a ‘hold’, and nine maintain a ‘sell’ rating. The average 12-month consensus price target is Rs 225.42, implying a potential downside of about 8 per cent.