See Bull Run's current pages for Thermax and Bharat Heavy Electricals. Related comparisons include Thermax vs Cummins India and CG Power vs BHEL.

Q1 FY27 scorecard: BHEL's quarter was the opposite of Thermax's

Thermax's headline problem was not demand

Revenue increased 7%.

Order booking increased 2%.

Order balance increased to ₹14,045 crore.

Yet PAT fell approximately 85%.

The reason was project economics.

One project changed the entire quarter

Reported PBT fell to ₹42 crore.

Company-reported PAT fell to ₹22 crore.

Standalone Thermax actually reported an ₹18 crore loss.

The cost overrun therefore overwhelmed otherwise positive topline growth.

This is the central risk in project businesses

Revenue recognition often occurs over several quarters or years.

Project profitability depends on assumptions involving:

• steel;
• tubes and pipes;
• labour;
• freight;
• engineering changes;
• customer scope;
• site conditions;
• subcontractor cost;
• completion schedule.

If the expected cost to complete changes, previously expected profit can disappear quickly.

BHEL has historically faced the same economic problem at much larger scale

BHEL executes giant:

• thermal EPC projects;
• power-island packages;
• turbine-generator systems;
• industrial projects;
• transport equipment;
• transmission systems.

Cost and schedule discipline therefore matter just as much.

The difference is that BHEL's Q1 showed improving execution

PBT moved from:

-₹607 crore to +₹513 crore.

PAT moved from:

-₹455 crore to +₹382 crore.

BHEL's current EBITDA margin is roughly 9.5%

That is calculated from ₹735 crore EBITDA and ₹7,698 crore revenue.

Thermax's official press release does not present the same EBITDA metric, so Bull Run does not force a false apples-to-apples EBITDA comparison.

PBT margin provides a cleaner official comparison

Thermax:

₹42 crore / ₹2,303 crore = approximately 1.8%.

BHEL:

₹513 crore / ₹7,698 crore = approximately 6.7%.

Both are Bull Run calculations using official disclosed figures.

Thermax's ₹91 crore overrun explains most of the margin collapse

If the ₹91 crore project revision is simply added back to reported PBT for analytical context:

₹42 crore + ₹91 crore = approximately ₹133 crore.

That would correspond to roughly 5.8% of revenue.

Even on that simple adjustment, BHEL's current PBT margin is slightly higher

BHEL's approximately 6.7% versus the simple Thermax sensitivity of around 5.8%.

That shows how strongly BHEL's Q1 execution improved.

The year-on-year Thermax comparison is also unusually difficult

Q1 FY26 included approximately ₹56 crore of income under a Package Scheme of Incentives for a subsidiary.

So Thermax had:

• a negative one-off in Q1 FY27;
• and a positive one-off in Q1 FY26.

That exaggerates the reported year-on-year PAT decline.

Industrial Products faced another pressure: exports

Thermax said lower export sales reduced Industrial Products profitability.

This matters because exports had become a meaningful growth engine during FY26.

FY26 international revenue reached approximately ₹3,084 crore, up 33.4%.

Thermax's long-term story is therefore stronger than Q1 PAT suggests

FY26 delivered approximately:

• ₹10,694 crore consolidated revenue;
• ₹720 crore consolidated PAT;
• ₹13,871 crore order booking;
• ₹13,604 crore year-end backlog.

Q1 FY27 should be judged against that broader earnings base.

The order book continued growing after FY26

June 2026 consolidated order balance increased to ₹14,045 crore.

Order booking during Q1 was ₹2,809 crore.

That represents an approximate book-to-bill ratio of:

1.22x.

Orders are therefore still replenishing revenue.

But Thermax changed one order-book reporting methodology

This is not a problem.

It simply means investors should not treat every rupee of reported backlog growth as newly signed business.

BHEL's book-to-bill was dramatically higher

Q1 order inflow:

₹26,745 crore.

Q1 revenue:

₹7,698 crore.

That is an approximate book-to-bill ratio of:

3.47x.

BHEL's order intake was boosted by very large projects

Important wins included:

• 3 × 800 MW Meja thermal EPC;
• 1 × 800 MW Durgapur main-plant package;
• large gas-turbine-generator export package;
• transformers;
• nuclear work;
• rail equipment;
• defence orders.

Quarterly order inflow will therefore be lumpy.

BHEL's backlog is almost nineteen times Thermax's

Why is BHEL's backlog so much larger than its revenue advantage?

BHEL participates in giant multi-year utility projects.

A single thermal order can be worth thousands or tens of thousands of crores.

Thermax deliberately has a different risk appetite.

Thermax has been selective about long-gestation civil-heavy EPC

Management said FY26 order quality improved partly because the company avoided large projects carrying significant civil and construction scope.

This is a deliberate attempt to reduce:

• working-capital risk;
• civil-execution risk;
• site delays;
• low-margin long-duration exposure.

That makes the Q1 ₹91 crore overrun especially important

It shows that project risk cannot be eliminated completely even with a more selective strategy.

One complex project can still materially affect a quarter.

Thermax's strongest differentiation is industrial energy

The company operates across four broad segments:

• Industrial Products;
• Industrial Infra;
• Green Solutions;
• Chemicals.

This creates exposure to industrial customers rather than mainly power utilities.

Industrial Products includes recurring energy-efficiency equipment

Thermax sells:

• process heating systems;
• industrial boilers;
• steam engineering;
• cooling systems;
• air-pollution-control equipment;
• water and waste solutions.

These products serve a much broader customer universe

Customers include:

• chemicals;
• refineries;
• food processing;
• pharmaceuticals;
• paper;
• cement;
• metals;
• data centres;
• manufacturing plants.

This reduces dependence on government utility ordering.

BHEL's revenue opportunity is more utility-scale

BHEL is strongest where equipment is enormous:

• 800 MW thermal units;
• large turbines;
• generators;
• nuclear turbine-generators;
• high-voltage transformers;
• rail traction systems;
• defence equipment.

The addressable contract size is much larger.

Thermax has started competing in utility-scale thermal too

This is one of the clearest direct areas of overlap with BHEL.

But Thermax's scope is narrower than a BHEL full EPC package

The Thermax order includes:

• design;
• engineering;
• manufacturing;
• boiler-package supply;
• installation supervision;
• commissioning supervision;
• performance testing.

BHEL can bid for the broader main-plant or entire EPC scope.

Narrower scope can reduce execution risk

Thermax does not necessarily need to take responsibility for every:

• civil structure;
• balance-of-plant component;
• site package;
• construction interface.

This can protect return on capital when contracts are disciplined.

Thermax is also benefiting from data-centre infrastructure

During Q1 it secured an order worth more than ₹400 crore for boiler pressure parts for a US data-centre project.

This sounds counterintuitive.

Data centres still require thermal-management and energy infrastructure around power-generation systems.

BHEL also has data-centre-adjacent exposure through power infrastructure

It can benefit indirectly through:

• generation equipment;
• transformers;
• grid transmission;
• backup and industrial electrical systems.

But Thermax's disclosed Q1 US order provides a more direct current project example.

Both companies are positioning for green hydrogen

Thermax has partnered with HydrogenPro for alkaline-water-electrolysis technology.

BHEL has tie-ups for:

• alkaline electrolysers with thyssenkrupp nucera India;
• PEM electrolysers with Hystar AS.

The strategic approaches are different

BHEL is using its heavy manufacturing base to localize multiple electrolyser technologies.

Thermax is integrating green hydrogen into a broader industrial-energy-transition portfolio.

Neither should yet be valued primarily as a hydrogen company

Commercial economics remain early.

Investors need:

• firm orders;
• localization economics;
• capacity utilization;
• customer financing;
• green-hydrogen offtake.

before assigning mature earnings.

Thermax has much higher current standardized ROCE

ROCE is the strongest current argument for Thermax

Approximately 16.5% versus BHEL at 6.8%.

This reflects a historically more capital-efficient business structure.

Thermax does not need giant factories for every project category

A meaningful portion of its value comes from:

• engineering;
• technology;
• product manufacturing;
• services;
• process expertise;
• customer relationships.

This can generate better returns on a smaller capital base.

But Thermax's five-year free cash flow is currently negative

Bull Run records approximately -₹831 crore of cumulative five-year free cash flow.

This reflects expansion, investments and working-capital intensity across the group.

High ROCE therefore should not be interpreted as automatically strong current free cash flow.

BHEL's recent cash metrics are improving

Bull Run records roughly ₹2,775 crore cumulative five-year free cash flow.

The standardized operating-cash-flow-to-net-profit ratio is approximately 3.65x.

Q1 customer collections also reached ₹11,004 crore.

For BHEL, collections are almost as important as EBITDA

Large utility projects can build enormous receivables and contract assets.

Execution without cash collection can still create balance-sheet stress.

The valuation currently favours BHEL

BHEL is worth about 2.7 times Thermax

Yet quarterly revenue is around 3.3 times higher.

Q1 company-reported PAT is more than seventeen times Thermax's.

The profit comparison is exaggerated by Thermax's cost overrun, but the direction remains clear.

BHEL is cheaper on both earnings and book value

BHEL:

• 59.8x P/E;
• 5.57x P/B.

Thermax:

• 91.2x P/E;
• 9.75x P/B.

Why does Thermax still trade at a premium?

Investors historically pay for:

• higher ROCE;
• private-sector execution;
• industrial diversification;
• environmental solutions;
• international growth;
• energy-transition exposure.

Q1 tests that premium

A high-quality project company should ideally avoid major cost-to-complete shocks.

The ₹91 crore revision therefore matters beyond one quarter's EPS.

Investors need to know whether it is:

• truly isolated;
• or evidence of broader project-risk assumptions.

BHEL has the opposite valuation challenge

The market knows BHEL has historically had execution and margin problems.

The stock now needs to prove that Q1's turnaround is durable.

A single strong quarter does not establish a new margin regime.

What must Thermax prove?

• The ₹91 crore project overrun should remain isolated.
• Industrial Infra execution discipline must improve.
• Industrial Products exports should recover.
• Order-book growth should translate into earnings.
• Green Solutions reporting changes need transparent interpretation.
• ROCE should remain in the mid-teens or better.
• Free cash flow should improve.
• The 800 MW boiler project needs disciplined execution.

What must BHEL prove?

• Positive Q1 EBITDA must remain sustainable.
• Thermal project execution must avoid historic cost overruns.
• Customer collections should remain strong.
• ₹2.60 lakh crore backlog must convert into double-digit-margin potential over time.
• Non-thermal segments should reduce thermal concentration.
• ROCE needs to improve materially.
• Green-hydrogen technology partnerships need commercial orders.

What could make Thermax outperform?

Q1 profitability may prove unusually depressed.

If the ₹91 crore overrun is genuinely isolated and margins normalize while the ₹14,045 crore backlog converts, earnings can rebound sharply from a weak base.

Industrial energy efficiency, exports and green solutions provide multiple growth avenues.

What could make BHEL outperform?

BHEL has far greater operating leverage.

At almost ₹7,700 crore quarterly revenue, every incremental margin point matters enormously.

If the company sustains 40%-type execution growth while moving EBITDA margin into durable double digits, earnings can rise far faster than revenue.

Which company is larger?

BHEL by a wide margin.

Quarterly revenue is around 3.3 times Thermax's and backlog roughly 18.5 times larger.

Which is growing faster?

BHEL currently.

Q1 revenue increased approximately 40% versus Thermax at 7%.

Which has the larger order book?

BHEL.

Approximately ₹2,60,255 crore versus Thermax at ₹14,045 crore.

Which has higher current ROCE?

Thermax.

Approximately 16.5% versus BHEL at 6.8%.

Which has stronger current profit momentum?

BHEL.

It moved from losses to ₹382 crore PAT, while Thermax's company-reported PAT fell to ₹22 crore after the project cost revision.

Which is more exposed to industrial energy efficiency?

Thermax.

Its portfolio is built around process heat, industrial boilers, clean air, clean water, chemicals and energy-transition solutions.

Which is more exposed to utility-scale power generation?

BHEL.

Large thermal, nuclear and utility power projects remain central to its order book.

Which stock is cheaper?

BHEL on current P/E and price-to-book.

Approximately 59.8x trailing earnings versus Thermax at 91.2x.

Which is better: Thermax or BHEL?

BHEL currently has the stronger operating-momentum and valuation profile. Revenue growth is much faster, the company has returned to EBITDA and PAT profitability, customer collections are improving, the order book is enormous and the stock trades at a materially lower P/E.

Thermax remains the stronger historical capital-efficiency and industrial-diversification franchise. Its ROCE is more than twice BHEL's, it is less dependent on utility thermal capex and its business mix includes environmental technologies and industrial energy solutions that BHEL does not replicate in the same way.

But Q1 FY27 shifts the burden of proof.

Thermax must demonstrate that one large cost overrun does not signal broader project-quality issues.

BHEL must demonstrate that one strong turnaround quarter becomes a multi-year margin-recovery cycle.

At September 2026 valuations, BHEL offers the stronger current earnings-to-price setup, while Thermax offers the higher-quality return-on-capital model if execution normalizes. The deciding metric over the next several quarters is not revenue growth alone—it is how much cash and profit each company extracts from its backlog without giving it back through project overruns.

Frequently asked questions