Jefferies on BHEL ; Underperform, TP Rs 335

• BHEL reported a 12% beat on EBITDA as margins improved 330 bps YoY to 11.0% vs expectations of 140 bps rise • Industry segment margins have surprised at 420 bps YoY rise to 19.5%, while Power segment (71% of revenues) has seen only 250 bps uptick to 12.9% • Raise our FY27E-30E EBITDA by 17%+ to factor the 595 bps gross margin improvement in 2QFY27. • However, prefer T&D equipment names like Hitachi Energy and Siemens Energy to play power upcycle.

BHEL

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