State-owned engineering major Bharat Heavy Electricals Ltd (BHEL) has reported a spectacular turnaround in the second quarter of fiscal year 2026, with its consolidated net profit skyrocketing by an impressive 254% year-on-year (YoY). For investors tracking the capital goods sector, this signals a significant operational recovery for the PSU behemoth. The company posted a profit of Rs. 375 crore, a massive jump from Rs. 106 crore last year and a significant recovery from the Rs. 456 crore loss it incurred in the previous quarter.
The stellar bottom-line performance was driven by a healthy 14% YoY increase in revenue to Rs. 7,512 crore and a significant improvement in operating margins. The strong results, which beat market expectations, were cheered by investors, with BHEL's shares rallying over 4% to hit a fresh 52-week high of Rs. 259.40.
Table of Contents
- BHEL's Q2 Financials: A Deep Dive into the Turnaround
- What's Driving BHEL's Growth? A Segment-wise Look
- The Investor's Bottom Line: Is BHEL Back on Track?
- Frequently Asked Questions (FAQs)
BHEL's Q2 results indicate a company that is not only growing its top line but is also executing projects more efficiently, leading to a dramatic improvement in profitability.
Key Financial Highlights for Q2 FY26
/content-assets/7295514fc2e042a5b0768033f67a79b5.png)
The most striking aspect of the results was the sharp expansion in the company's EBITDA margin, which nearly doubled to 7.7%. This indicates improved cost absorption and a better mix of projects being executed, translating directly into higher profitability.
To understand how the market has priced in this turnaround, check the latest BHEL share price, updated performance charts, and valuation metrics.
BHEL operates primarily through two main business segments: Power and Industry, both of which showed strong growth.
-
Power Segment (75% of Revenue): This is the company's core business, involving the manufacturing and installation of power generation equipment. The segment's revenue grew by a strong 12.9% YoY to Rs. 5,676 crore. The profit from this segment surged by 76% YoY, driven by healthy execution of its large order book.
-
Industry Segment (25% of Revenue): This segment caters to sectors like transportation, defence, and industrial systems. It also showed robust growth, with revenue increasing by 18% YoY to Rs. 1,836 crore.
The growth across both segments highlights a broad-based recovery and BHEL's pivotal role in India's capital goods and infrastructure landscape, supported by government initiatives like the National Infrastructure Pipeline (NIP) and the 'Make in India' program.
NDTV Profit has shared a detailed analysis of BHEL’s Q2FY26 results alongside other PSU majors — you should watch it for insights into earnings trends and investor sentiment.
For investors who have been waiting for a turnaround in BHEL's fortunes, the Q2 results offer a strong ray of hope.
-
Exceptional Profit Growth: A 254% jump in net profit is a clear sign that the company's profitability is on the mend after several challenging quarters.
-
Margin Expansion is Key: The dramatic improvement in EBITDA margins is the most significant positive. It shows that the company is not just booking orders but is also executing them profitably.
-
Strong Demand Environment: The results are a clear reflection of the strong capex cycle in the power and infrastructure sectors, both domestically and in select international markets.
While one strong quarter doesn't make a trend, the underlying drivers—a strong order book, improved execution, and a favourable demand environment—suggest that this recovery could be sustainable. For investors, BHEL is increasingly looking like a compelling turnaround story and a key beneficiary of India's infrastructure-led growth narrative.
Want to compare this Q2 FY26 recovery with the previous quarter? The BHEL Q1 FY26 results highlight how the company managed a massive order book despite short-term operational hurdles.
1. What were the key highlights of BHEL's Q2 FY26 results?
BHEL reported a 254% YoY surge in net profit to Rs. 375 crore and a 14% YoY increase in revenue. The standout feature was the significant expansion of its EBITDA margin to 7.7%.
2. Why did BHEL's profit grow so dramatically?
The profit growth was driven by a combination of higher revenue from improved project execution and a sharp increase in operating margins, which indicates better cost control and profitability on its projects.
3. How did BHEL's different business segments perform?
Both major segments performed well. The core Power segment grew its revenue by 12.9% YoY, while the Industry segment grew by an even faster 18% YoY, signalling a broad-based recovery.
4. How did the market react to BHEL's results?
The market reacted very positively. BHEL's shares rallied over 4% to hit a new 52-week high, as the results beat analyst expectations and signalled a strong operational turnaround.
5. What is the investment outlook for BHEL?
The outlook is improving. The Q2 results suggest a significant turnaround in the company's operational and financial health. It appears well-positioned to benefit from India's infrastructure and power sector capex cycle, making it a noteworthy turnaround story for investors.