Hold BEML; target of Rs 4142: Prabhudas Lilladher

Prabhudas Lilladher recommended hold rating on BEML with a target price of Rs 4142 in its research report dated August 13, 2025.

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August 14, 2025 / 14:33 IST

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26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on BEML

BEML reported a muted Q1FY26 with revenue flat YoY to Rs6.3bn with an EBITDA level loss of Rs493mn impacted by lower execution and supply chain constraints. Despite these challenges management reaffirmed FY26 guidance of 20% YoY revenue growth with ~150bps improvement in EBITDA margin supported by improved export order execution and easing supply chain issues. YTD order intake was ~Rs29bn with Q1FY26 order book of Rs144.3bn driven strong railways and defense orders inflow. Management cited that export contribution is expected to reach ~4% in FY26 driven by better execution and order intake in mining & construction and railways rolling stock. Execution of Vanda Bharat project is on track with expected contribution of ~10% FY26 revenue and defence segment’s share in revenue is expected to reach 30% of revenue mix (~27% in FY25). Management remains focused on working capital optimisation through lower inventory and receivables, alongside strengthening the cash position.

Outlook

The stock is currently trading at a PE of 39.8x/28.6x on FY26/27E. We maintain our ‘Hold’ rating on stock with a TP of Rs4,142 (same as earlier) valuing the stock at a PE of 29x Mar’27E (same as earlier).

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