BEML may test Rs 1,230-1,250 in 6-9 months: Prakash Diwan

Prakash Diwan of Altamount Capital Management told CNBC-TV18, "I did get to have a look and very clearly we have been talking about BEML as a positive space that it is in for some time. Last couple of years have been very weak for the rail freight business that BEML has always been correlated with directly thanks to the fact that crude was soft enough, road transport was taking away most of the share. Now, if crude is on a boil and it continues to be at elevated levels, there is going to be huge shift back to the rail freight business and that means you will need more rolling stock, you will need much more carrying capacity and BEML does benefit out of that." "The second is the metro rapid transport solutions that we are seeing happen in most of the larger places also which end up giving a lot of new business to BEML which is very high margin as well. So, given the low base, I think the management is very clearly looking at this to be the growth engine figuratively, literally, whatever you want to look at it. However, electrification of diesel tracks for locomotives that were hitherto run on diesel fuel, are also going to be an added impetus to this," he said."So, all put together, BEML is in the right spot and I think the fact that they are reducing head count means that the burden on salaries after the seventh pay commission was significant and that is the reason the stock has come down, is also kind of being going out of the way. So, very clearly this is one bright spot of sorts in a dull day. I would definitely be very positive on this. Probably look at it with an Rs 1,230-1,250 kind of target in the next 6-9 months."