Anand Rathi Securities is bearish on BEML and recommended sell rating on the stock with a target of Rs 882, in its November 17, 2009 research report.
"BEML's healthy Rs 60 billion order backlog largely comprises low-margin Railway orders. We expect modest earnings growth given rising competition and greater share of railways in overall revenues. We thus maintain our Sell rating on the stock. We expect EBITDA margin to contract owing to higher contribution from the Railways (the low-margin business) along with more competition in the mining and construction equipment segment. Our new target price now stands at Rs 882 (12x FY11e EPS)," says Anand Rathi Securities research report.
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