Shares of Bharat Heavy Electricals Ltd (BHEL) staged a partial recovery on Friday after a sharp sell-off in the previous session, as the market reassessed concerns around potential policy changes and refocused on the company’s execution outlook and order momentum. After plunging 10% on Thursday, the stock rebounded close to 5% intraday before paring gains, and was trading around Rs 275–280 levels at about 1:11 PM on Friday. Despite the rebound, BHEL remains about 11% below its recent 52-week high of Rs 305.85 touched earlier this week, reflecting lingering near-term caution.

The sharp correction was triggered by reports suggesting a possible review of restrictions imposed on Chinese power equipment manufacturers, which had raised fears of intensified competition for domestic players. However, the market view has since stabilised, with the assessment that any relaxation—particularly at the component level, is unlikely to materially disrupt BHEL’s competitive position. India’s strong pipeline of thermal and infrastructure projects, coupled with execution preferences and past experience of developers, continues to favour domestic suppliers. As legacy low-margin projects near completion, the earnings drag is expected to gradually ease, with margin recovery likely as newer, better-priced orders move into the revenue recognition phase from FY27 onwards.

Adding to the positive undertone, BHEL has secured a Rs 5,400 crore order from Bharat Coal Gasification and Chemicals Ltd for a coal gasification and raw syngas cleaning plant in Odisha, marking a key milestone in the commercial deployment of its proprietary technology. The order accounts for a substantial portion of the company’s FY26 order inflows and strengthens visibility for medium-term execution.

With a large order book, improving execution profile and expectations of a gradual margin turnaround post recent volatility, investor focus is shifting back to fundamentals, even as near-term stock movements remain sensitive to policy signals and sector-wide sentiment.