Divestment isn't enough to sustain uptrend in BHEL as numbers don't support

Operational performance has been on a weak footing for long, with little hope of turnaround even in the medium-term

The Bharat Heavy Electricals’ (BHEL) stock was among the top gainers on Wednesday, with returns of almost 10 per cent driven by foreign brokerage CLSA upgrading its ‘sell’ recommendation to ‘buy’, with a target price of Rs 67. 

While there is still some upside despite Wednesday’s price movement, it may be worthwhile to ask if its financials support the stock price movement.

For example, the June quarter (Q1) was another washout, with revenues falling 24 per cent net loss at Rs 216 crore. Operating margins have shown little sign of improvement and haven’t crossed the 5 per cent-mark even in the good