Prabhudas Lilladher's research report on BEML
We revised our FY26/27E EPS by -3.4%/-3.6%, factoring in deferred orders and execution delays. BEML reported a strong quarter, with revenue growing 9.2% YoY and EBITDA margin improving by 110 basis points, supported by better material cost management and increased defence contributions. The FY25 order book stood at Rs140bn, below the guided ~Rs180bn due to delays in railway and metro projects; however, management expects these deferred orders to boost the FY26 closing order book to ~Rs220bn. Growth in the railway and metro segment will be driven by the execution of large-scale projects such as Bangalore Metro and Vande Bharat. Additionally, the defence segment’s share in revenue and orders is projected to rise, supported by government initiatives in emergency procurement and combat engineering.
Outlook
Furthermore, BEML’s recent land acquisition in Chhattisgarh for a mining equipment manufacturing facility is poised to fuel the next phase of growth in its mining business. We roll forward to Mar’27E and downgrade the stock from ‘Accumulate’ to ‘Hold’ rating given the recent rally in the stock with a revised TP of Rs4,142 (Rs3,561 earlier), valuing the stock at a P/E of 29x Mar’27E (28x Sep’26E earlier).
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