Why BHEL's Share Price is Falling

India's power sector is growing rapidly, driven by government plans to upgrade infrastructure and boost clean energy.

But the sector has been experiencing downward pressure in recent times. One such company that is currently facing this situation is BHEL.

Bharat Heavy Electricals (BHEL) is one of India's largest public sector engineering and manufacturing companies, playing a crucial role in the power industry.

The share price of the company is currently under pressure on the market.

It drew attention among investors today as it fell 6%.

What's dragging it down?

Let's dig deeper...

2 Reasons Why BHEL Share Price is Falling?

#1 Q1 FY26 Results

Shares of Bharat Heavy Electricals (BHEL) dropped 6% after the company posted its Q1 FY26 results.

Revenue from operations rose 0.4% to Rs 54.9 billion (bn) compared to Rs 54.8 bn in the same period last year. The revenue from the power business fell 5.5% to Rs 38.9 bn. While revenue from industry rose 17.4% to Rs 15.8 bn.

The company reported a pre-tax loss of Rs 6.1 bn in Q1 FY26, more than doubling from Rs 2.7 bn in the same period last year.

BHEL's total expenses rose 6.8% to Rs 62.8 bn in Q1 FY26. Material costs rose 10.8% to Rs 41.3 bn, and employee benefits expenses increased 1.9% to Rs 0.01 bn.

The company reported a net loss of Rs 4.5 bn in Q1 FY26, compared to Rs 2.1 bn loss in the same period last year.

This was the primary cause of the share price drop.

#2 FII Selling

FIIs have been selling the stock over the last few months.

The FII holdings declined from 7.2% in March 2025 to 6.3% in June 2025.

This could be a contributing factor to the decline in the share price.

What Next?

BHEL aims to commission a record 9 GW of thermal power capacity this financial year.

The company is diversifying into the non-coal sector, aiming for 50% of its business from these areas. It made progress last year, with industry segment orders reaching 40% of total bookings, including a record defense order.

The Ministry of Power has identified 81 thermal power units to switch from coal to renewable energy by 2026, supporting India's target of 500 GW of renewable energy and addressing coal supply issues.

Also, BHEL has moved into defence and railways which will reduce its reliance on the power sector and open new growth opportunities.

BHEL is also exploring carbon capture, coal gasification, and green hydrogen.

How BHEL's Share Price Has Performed Recently

BHEL'S share price has slipped 4% over the past five trading sessions, extending the monthly decline to 11%.

Over the past one year, the shares have declined 25%.

The stock touched its 52-week high of Rs 305.8 on 7 August 2024 and a 52-week low of Rs 176 on 3 March 2025.

About BHEL

BHEL is a leading builder of power plants in India. The company's clients are in sectors like power generation, transmission, transportation, renewable energy, oil and gas, and defence.

Around 76% of its revenue comes from the thermal power sector and the remaining 24% comes from other areas like renewables, defence, and aerospace.

To know more about the company, check out BHEL company fact sheet and its quarterly results..

Here are some peer group comparisons of BHEL:

BHEL vs Triveni Turbine

BHEL vs Thermax

BHEL vs Inox India Ltd

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

Investors should evaluate the company's fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...