In the Eastern Vidarbha region of Maharashtra, Indian mustard is often sown late, resulting in yield reduction due to heat stress during flowering and seed development. The study evaluated 164 mustard germplasm lines to identify heat-stress tolerant genotypes suitable for crop improvement. All genotypes, along with checks, were grown during rabi 2019–20 in a randomized block design (RBD) under normal (30th October 2019) and late sowing (30th November 2019) conditions. The analysis revealed a significant variability among germplasm lines for all evaluated stress indices. Correlation analysis identified stress tolerance index (STI), yield index (YI), mean productivity (MP), geometric mean productivity (GMP), harmonic mean (HM) and mean relative performance (MRP) as effective indices for selecting genotypes under stress conditions. Principal component and biplot analysis identified ACN-240, SKM-1626, ACN-226, ACN-244, ACN-250, ACN-255, T-9 and ACN-237 as high yielding genotypes with moderate to high heat tolerance. These genotypes were further evaluated for yield stability using additive main effects and multiplicative interaction (AMMI) and genotype and genotype-by-environment (GGE) biplot analysis over four consecutive rabi seasons (2020–21 to 2023–24). These analyses identified ACN-226 and ACN-237 as high yielding genotypes with stable performance across environments. These genotypes also showed lower mean seed yield reduction under stress conditions compared with the checks over 4 years. Based on mean heat susceptibility index and yield stability ratio (2020–21 to 2023–24), ACN 226 and ACN 237 were classified as moderately heat tolerant with higher yield stability than checks. The selected 8 genotypes, along with checks TAM 108-1 and PM- 26, were evaluated during 2023–24 for seed yield and morpho-physiological traits. From the data, it is observed that mustard genotypes ACN 226 and ACN 237 showed increased seed yield and morpho-physiological parameters viz. root-to-shoot ratio, proline content, chlorophyll content and low canopy temperature over checks under terminal heat stress. These genotypes can be used as donor parents for developing heat-stress tolerant mustard cultivars.