Most analysts who have coverage on state-run Bharat Heavy Electricals Ltd. (BHEL) continue to maintain a cautious to bearish stance on the stock, but recommendations range on the extreme.

BHEL reported a surprise net profit in the September quarter on Monday, contrary to expectations of a net loss. The result saw the stock jump as much as 10% intraday before ending with gains of just over 6%.

Brokerage firm CLSA wrote in its note that the turns in BHEL are visible, but at 40 times financial year 2026 price-to-earnings, the stock is “pricing in a lot more.”

CLSA has an “underperform” rating on BHEL with a price target of ₹189, which implies a further downside of 18% from Monday’s closing levels. Shares of BHEL have already corrected over 30% from its recent peak of ₹335.

The brokerage said that BHEL is turning around operationally with execution rising 33%, albeit on a low base, led by a backlog growth of 40%. Gross margins for the quarter also rose by nearly 350 basis points, following a seven-year decline.

Another bright spot that CLSA highlighted is the resurgence of fossil orders, given India’s focus on energy security. The future of thermal business looks bleak beyond financial year 2030, CLSA wrote in its note.

However, CLSA said that it has maintained its “underperform” recommendation on the stock has a key catalyst of its inclusion in the global passive indices has now past and the recent entry of Larsen & Toubro in the thermal power equipment market raises questions on BHEL’s market dominance.

Out of the 17 analysts that have coverage on BHEL, 10 of them have a “sell” rating on the stock with price targets ranging to as low as ₹70, to as high as ₹364.

Shares of BHEL had ended 6.5% higher on Monday at ₹231.05.