Bharat Heavy Electricals Limited (BHEL) is approaching a critical operational transition, according to a recent report from brokerage firm Nuvama. The analysis highlights significant developments in the company's project portfolio that could reshape its financial trajectory over the next two years.

Legacy Projects Nearing Completion

Nuvama's report indicates that BHEL's older projects, which have been contributing to losses, are expected to reach completion by the second half of FY26. These legacy projects have been a drag on the company's financial performance, particularly affecting gross margins in recent periods.

New Project Operations Timeline

The brokerage firm projects that most of BHEL's new projects will become operational by March 2026. This timeline suggests a potential overlap period where the company will be concluding loss-making ventures while simultaneously ramping up new operational capabilities.

Margin Pressure Continues

The report emphasizes that gross margins are currently under pressure due to these older projects. The completion of these loss-making initiatives by H2 FY26 could potentially alleviate some of the margin compression that BHEL has been experiencing.

Operational Transition Period

BHEL appears to be navigating a significant operational transition, with the company working to complete legacy commitments while preparing new projects for commercial operations. The convergence of these timelines around FY26 represents a crucial period for the heavy electrical equipment manufacturer.

The Nuvama analysis provides insight into BHEL's project execution timeline and the expected resolution of current operational challenges. The completion of loss-making projects and the commencement of new operations by March 2026 mark important milestones in the company's operational roadmap.

Bharat Heavy Electricals Limited has announced the closure of its capital investment scheme for establishing a new manufacturing plant at Karkhiyaon, Varanasi. The decision was approved by the company's Board of Directors during a meeting held on January 19, 2026.

Board Meeting Details

The Board of Directors convened to discuss and approve the closure of the previously announced capital investment scheme. The meeting commenced at 10:50 AM and concluded at 11:28 AM on January 19, 2026.

Investment Scheme Background

The original capital investment scheme for the Varanasi plant was initially approved by the Board of Directors and communicated to stock exchanges on January 23, 2024, under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The scheme was designed to establish a new BHEL manufacturing facility at Karkhiyaon, Varanasi.

Reasons for Closure

The Board's decision to close the investment scheme was made considering the current business landscape. The company has determined that the products originally planned for manufacturing at the new Varanasi plant will now be produced at other existing BHEL locations.

Regulatory Compliance

The announcement was made in compliance with Regulation 30 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The communication was signed by Dr. Yogesh R Chhabra, Company Secretary, and submitted to both BSE Limited, Mumbai and National Stock Exchange of India Ltd., Mumbai.

Strategic Reallocation

Instead of establishing the new facility in Varanasi, Bharat Heavy Electricals Limited will utilize its existing manufacturing infrastructure at other locations to produce the products originally designated for the Varanasi plant. This strategic reallocation allows the company to optimize its manufacturing operations while adapting to current market conditions.