Improving working capital, project execution key to rally in BHEL's stock

A rise in debtor days to 581 in Q2FY24, from an already high 567 days Y-o-Y has led to stresses on the working capital cycle

Bharat Heavy Electricals Ltd (BHEL) is India’s largest engineering and manufacturing enterprise, operating across energy, industry, and infrastructure sectors. The investment path for the stock is based on a large order backlog, continued strong order inflows, and rising power demand, which should push demand for BHEL’s equipment and services.

BHEL has historically held over 70 per cent market share in power projects. In addition, it has new revenue streams from railways (Vande Bharat train sets), pumped-hydro storage plants, domestic defence production, nuclear steam turbines, and potentially in areas like coal gasification. However, it has issues with very high receivables and