Shares of Bharat Heavy Electricals Ltd. are up another 5.5% on Thursday, May 7, and have now gained in four out of last five trading sessions enroute to a record high.
Over the last 21 trading sessions, the stock has gained in 18 of them.
The stock had ended 2020 at ₹35.9. It has risen more than 10x from those levels in just over five years. The stock has delivered positive returns in each of the last six years.
What Is Aiding The Rally?
BHEL's margins in the recently reported fourth quarter beat analyst expectations. Profitability during the quarter was aided by higher other income. Margins for the full financial year of 2026 was at the highest level since financial year 2021.
Growth during the March quarter was led by the power sector, whose revenue grew by 53% from the year-ago period. Industrial segment remained flat.
Power segment EBIT margin increased from 5% last year to 20%, while industrial segment margin narrowed to 24% from 31% earlier.
Buy Or Sell BHEL?
Brokerages such as CLSA and JPMorgan are bearish on the stock.
CLSA said that quality of BHEL's growth in the fourth quarter was not good as its gross margins fell.
It added that the stock has rallied on the energy security theme but it does not see any new orders in this regard, and also called the stock as expensive.
CLSA has an underperform rating on BHEL with a price target at ₹282.
JPMorgan has an "underperform" rating on the stock with a price target of ₹220. The brokerage said that the sharp outperformance provides a good exit opportunity in a deeply cyclical name. It went on to add that the current stock price more than adequately factors in the long-term profit potential.
On the flip side, Morgan Stanley has an outperform rating with aa price target of ₹444, stating that BHEL's turnaround could continue to surprise the markets.
BHEL has 21 analysts tracking the stock, of which nine have a "buy" rating, 10 have a "sell" rating and two others have a "hold" recommendation.
Shares of BHEL are trading 5.3% higher on Thursday at ₹406.35. The stock has now extended its gains for the year to 40%.
The Public Sector Undertaking (PSU) stock you are likely referring to is Mazagon Dock Shipbuilders Ltd, which has been a standout performer in the Indian market. As of May 2026, it has recently hit new record highs, completing a remarkable journey of nearly 10x returns (1,000%) over the last six years.
Other major PSUs in the defence and railway sectors, such as Hindustan Aeronautics (HAL) and Rail Vikas Nigam Ltd (RVNL), have also seen similar "multibagger" trajectories during this period.
The 10x Performance Leader: Mazagon Dock
Mazagon Dock has transitioned from a steady dividend payer to a high-growth "multibagger" due to India's aggressive push for naval indigenisation.
The 6-Year Surge: In early 2020, the stock was trading at adjusted levels significantly lower (around ₹170-₹200). By May 2026, it has crossed the ₹3,500–₹3,700 range, effectively delivering 17x returns for long-term holders, though the most concentrated "10x" move occurred in the last 4-5 years.
Recent Highs: The stock reached a 52-week high of ₹3,778 in early 2026, driven by a massive order book for submarines and stealth frigates.
Other High-Flying PSUs (2020–2026)
The entire PSU index has undergone a "re-rating," where investors shifted from viewing them as stagnant companies to seeing them as growth engines.
| PSU Stock | Approx. Return (6 Years) | Key Driver |
| Mazagon Dock | ~17.5x | Naval warship and submarine orders. |
| RVNL | ~20.0x | Railway infrastructure and metro projects. |
| HAL | ~5.5x | LCA Tejas production and export potential. |
| IRFC | ~9.0x | Financing the massive expansion of Indian Railways. |
| SJVN / NHPC | ~3.0x - 4x | Shift toward renewable energy (Hydro/Solar). |
Why are PSU stocks surging now?
Massive Capex: The FY26 Union Budget allocated over ₹11.1 lakh crore toward capital expenditure, directly benefiting infrastructure and defence PSUs.
Order Book Visibility: Companies like HAL and Mazagon Dock have order books worth 3x to 10x their annual revenue, providing long-term earnings certainty.
Indigenisation (Atmanirbhar Bharat): The government’s "Positive Indigenisation List" bans the import of several hundred types of defence equipment, creating a captive market for domestic PSUs.
Operational Efficiency: Many PSUs have become debt-free or significantly reduced debt while improving their Return on Equity (ROE).
Note for Investors: While these stocks have hit record highs, valuations (P/E ratios) for many defence PSUs are now at historic peaks. For instance, HAL is trading at a P/E of ~33x and BEL at ~53x, which is significantly higher than their 10-year averages.
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