BEML Ltd
BEML Ltd
IndustrialsBEML Ltd manufactures a wide range of heavy earthmoving equipment catering to the mining and construction industry, vehicles for defense forces and coaches for the metro and Indian Railways.[1]
BEML trades at a steep PE of 103.9x with deteriorating profitability (TTM profit growth of -51%) despite being a defence and infrastructure PSU beneficiary. While all 4 analysts rate it a Buy on long-term order book potential, the valuation leaves no margin of safety at current levels given weak 5-year sales CAGR of just 4%.
Key Fundamentals
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Key Insights
Strengths
1- Company has been maintaining a healthy dividend payout of 30.2%
Weaknesses
4- Stock is trading at 4.98 times its book value
- The company has delivered a poor sales growth of 4.11% over past five years.
- Company has a low return on equity of 8.66% over last 3 years.
- Company has high debtors of 191 days.
Growth Rate
AI Analysis — Bull vs Bear
anthropic claude-opus-4.6 1d agoBEML trades at a steep PE of 103.9x with deteriorating profitability (TTM profit growth of -51%) despite being a defence and infrastructure PSU beneficiary. While all 4 analysts rate it a Buy on long-term order book potential, the valuation leaves no margin of safety at current levels given weak 5-year sales CAGR of just 4%.
- 100% analyst consensus Buy rating with all 4 covering analysts recommending the stock, reflecting strong institutional conviction in long-term order pipeline
- Strong long-term stock CAGR of 29% over 3 years and 27% over 5 years, demonstrating sustained wealth creation for investors
- Healthy dividend payout ratio of 30.2% ensures consistent shareholder returns despite cyclical business
- 5-year compounded profit growth of 16% shows underlying earnings power when execution cycles align
- Market cap of Rs 14,772 Cr positions BEML as a mid-cap defence/infrastructure PSU with significant re-rating potential on order inflows
- 10-year stock CAGR of 18% demonstrates the company's ability to deliver above-market returns over extended periods
- Government ownership provides implicit sovereign backing and preferential access to large defence and metro rail contracts
- TTM compounded profit growth of -51% signals severe near-term earnings deterioration, raising execution concerns
- PE ratio of 103.9x is extremely elevated for a company delivering only 4% sales CAGR over 5 years, implying unsustainable premium pricing
- Price-to-book of 5.01x is expensive for a PSU with ROE of just 8.66% over 3 years, destroying value relative to cost of equity
- 5-year compounded sales growth of only 4.11% indicates structural top-line stagnation despite India's infrastructure boom
- High debtor days of 191 indicate poor working capital management and potential collection risks from government clients
- Last year ROE of just 5% is well below cost of equity, meaning shareholders are experiencing value erosion at current capital deployment
- Stock has declined 26% over 1 year, indicating significant momentum deterioration and potential de-rating cycle
- Dividend yield of only 0.27% provides negligible income cushion against further capital depreciation
This is AI-generated analysis, not financial advice. Do your own due diligence.
AI News Digest
anthropic claude-opus-4.6 1d ago- FY26 net profit plunges 52% May 29
Full-year net profit fell 51.68% to ₹141.36 crore vs ₹292.52 crore in FY25, with EBITDA margin compressing to 7.5% from 13.1% due to higher steel prices and a ₹1.5 billion one-off Mumbai metro provision.
- Stock drops on weak Q4 margins May 29
Shares tumbled 5.56% to ₹1,730 after Q4 net profit declined 37.46% YoY to ₹179.82 crore; EBITDA margin contracted to 15.1% from 25.6% in Q4 FY25.
- Supply chain and execution risks Jun 15
Elara Securities flagged supply chain constraints on castings and components as a key risk; long testing cycles, penalty clauses, and dependence on civil works progress by metro operators add execution uncertainty.
- Analyst EPS estimates cut May 29
Elara Capital cut FY27/FY28 earnings estimates by 8%/6% and Prabhudas Lilladher revised FY27E/FY28E EPS by -13%/-7% on slower execution and mining segment slowdown.
- Competitive pressure intensifies Jun 8
BEML faces competition from domestic and global rivals including Alstom, Bombardier, and CRRC, with private-sector players having deeper execution flexibility and established international tech partners.
- ₹31,000 cr order book targeted Jun 8
BEML targets ₹31,000 crore order book this fiscal from ₹16,600 crore currently, with ₹40,000 crore in potential new project approvals expected and a ~50% success rate on ₹100 billion pipeline.
- Buy rating with ₹2,620 target Jun 15
Elara Securities issued a buy with ₹2,620 target (47% upside from ₹1,783), citing 15-25% sales growth over three years, ₹55 billion executable orderbook, and expected 83% earnings growth over FY26-29.
- Record FY26 revenue of ₹4,351 cr May 29
Annual revenue hit an all-time high of ₹4,351 crore (up 8.16% YoY), with Q4 revenue at a record ₹1,794 crore and highest-ever value of production at ₹4,239 crore.
- Driverless metro tech leadership Jun 4
BEML is the only Indian manufacturer with indigenous GoA4 driverless train technology, winning the ₹3,996 crore Bengaluru Metro contract against seven international bidders at a record-low ₹7.74 crore per coach.
- First metro export order secured Jun 15
BEML received its first-ever order for metro rolling stocks exports in Q4 FY26, with exports expected to reach ~10% of order book by FY27-end.
- Defence order pipeline building Jun 8
Large defence orders expected for QRSAM/LRSAM high mobility vehicles, armoured recovery vehicle overhaul, and self-propelled mine barriers; defence secured ₹590 crore trawl assembly contract in April.
- Record capex and R&D investment May 29
Capex reached all-time high of ₹379 crore including ₹191 crore CWIP, while R&D investment surged 150% to ₹251 crore, signaling active capacity build-out.
- Cost auditor appointed for FY27-29 Jun 5
BEML appointed M/s. Chandra Wadhwa and Co. as cost auditor for 2026-27 to 2028-29.
- New Govt Nominee Director named Jun 5
Dinesh Mahur appointed as Government Nominee Director effective June 5, 2026, replacing Smt. Meera Mohanty.
- Elara Capital investor meet attendance Jun 4
BEML participated in an investor meet hosted by Elara Capital in Mumbai on June 10, 2026.
- Executive Director retires Jun 2
Sasi Kumar K, Executive Director (Accounts), retired due to superannuation effective May 31, 2026.
- Dividend of ₹2.85 per share May 29
Board approved total dividend of ₹2.85 per share for FY26 (₹2.30 second interim + ₹0.55 final), with record date fixed at June 5, 2026.
TL;DR: BEML is navigating a classic growth-vs-margin tension: record revenue and an ambitious ₹31,000 crore order book target are backed by strong positioning in driverless metro, defence, and first-time exports, but FY26 profitability collapsed with net profit halving due to one-off provisions and steel cost pressures. Multiple brokerages remain bullish on FY27-29 earnings recovery (83% growth expected) driven by operating leverage on a doubling order book. The key swing factor is whether execution catches up to order momentum — margin normalization to 15-16% EBITDA and timely rail/defence deliveries in H2 FY27 will determine if the stock re-rates toward analyst targets of ₹1,940-₹2,620.
Quarterly Results
| Mar 2023 | Jun 2023 | Sep 2023 | Dec 2023 | Mar 2024 | Jun 2024 | Sep 2024 | Dec 2024 | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 1,388 | 577 | 917 | 1,047 | 1,514 | 634 | 860 | 876 | 1,653 | 634 | 839 | 1,083 | 1,794 |
| Expenses | 1,101 | 627 | 858 | 991 | 1,143 | 684 | 787 | 815 | 1,230 | 683 | 766 | 1,080 | 1,523 |
| Operating Profit | 287 | -51 | 59 | 56 | 370 | -50 | 73 | 60 | 422 | -49 | 73 | 4 | 272 |
| OPM % | 21% | -9% | 6% | 5% | 24% | -8% | 8% | 7% | 26% | -8% | 9% | 0% | 15% |
| Other Income | 19 | 1 | 10 | 34 | 5 | 1 | 15 | 5 | 4 | 9 | 7 | 4 | 10 |
| Interest | 12 | 10 | 11 | 8 | 11 | 9 | 16 | 17 | 13 | 10 | 10 | 12 | 14 |
| Depreciation | 16 | 16 | 16 | 16 | 17 | 17 | 17 | 19 | 19 | 20 | 20 | 21 | 22 |
| PBT | 278 | -75 | 42 | 67 | 348 | -75 | 55 | 30 | 395 | -70 | 50 | -25 | 245 |
| Tax % | 43% | 0% | -23% | 28% | 26% | -7% | 7% | 17% | 27% | -9% | 5% | -12% | 27% |
| Net Profit | 158 | -75 | 52 | 48 | 257 | -70 | 51 | 24 | 288 | -64 | 48 | -22 | 180 |
| EPS in Rs | 18.93 | -9 | 6.22 | 5.79 | 30.83 | -8.46 | 6.13 | 2.93 | 34.52 | -7.7 | 5.77 | -2.69 | 21.59 |
Profit & Loss
| Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 2,802 | 2,975 | 2,494 | 3,239 | 3,474 | 3,025 | 3,557 | 4,337 | 3,899 | 4,054 | 4,022 | 4,351 |
| Expenses | 2,728 | 2,825 | 2,341 | 2,986 | 3,237 | 2,942 | 3,419 | 4,012 | 3,530 | 3,609 | 3,516 | 4,052 |
| Operating Profit | 74 | 149 | 153 | 253 | 238 | 84 | 138 | 325 | 369 | 445 | 506 | 299 |
| OPM % | 3% | 5% | 6% | 8% | 7% | 3% | 4% | 8% | 9% | 11% | 13% | 7% |
| Other Income | 60 | 42 | 63 | 25 | 23 | 49 | 60 | 6 | 22 | 42 | 24 | 29 |
| Interest | 76 | 56 | 55 | 48 | 60 | 41 | 39 | 65 | 49 | 42 | 54 | 45 |
| Depreciation | 53 | 57 | 63 | 65 | 71 | 72 | 71 | 66 | 64 | 64 | 71 | 83 |
| PBT | 5 | 79 | 98 | 164 | 130 | 19 | 87 | 200 | 278 | 382 | 404 | 200 |
| Tax % | -9% | 18% | 14% | 21% | 52% | -229% | 21% | 36% | 43% | 26% | 28% | 29% |
| Net Profit | 6 | 64 | 85 | 130 | 63 | 64 | 69 | 129 | 158 | 282 | 293 | 141 |
| EPS in Rs | 0.71 | 7.73 | 10.18 | 15.57 | 7.58 | 7.67 | 8.27 | 15.46 | 18.96 | 33.83 | 35.12 | 16.97 |
| Div. Payout % | 70% | 26% | 39% | 26% | 46% | 39% | 36% | 32% | 26% | 30% | 29% | 32% |
Balance Sheet
| Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity Capital | 42 | 42 | 42 | 42 | 42 | 42 | 42 | 42 | 42 | 42 | 42 | 42 |
| Reserves | 2,035 | 2,088 | 2,141 | 2,159 | 2,146 | 2,211 | 2,173 | 2,315 | 2,380 | 2,626 | 2,846 | 2,892 |
| Borrowings | 645 | 569 | 438 | 446 | 404 | 341 | 743 | 832 | 381 | 71 | 229 | 309 |
| Other Liabilities | 1,921 | 1,722 | 2,137 | 2,097 | 2,495 | 2,570 | 2,885 | 2,624 | 2,304 | 2,852 | 2,928 | 3,768 |
| Total Liabilities | 4,643 | 4,420 | 4,757 | 4,744 | 5,086 | 5,163 | 5,843 | 5,813 | 5,107 | 5,591 | 6,044 | 7,011 |
| Fixed Assets | 482 | 557 | 583 | 595 | 631 | 621 | 601 | 621 | 505 | 528 | 580 | 705 |
| CWIP | 192 | 104 | 79 | 68 | 25 | 15 | 14 | 14 | 23 | 37 | 107 | 276 |
| Investments | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 6 | 8 |
| Other Assets | 3,969 | 3,759 | 4,094 | 4,081 | 4,430 | 4,527 | 5,228 | 5,178 | 4,579 | 5,026 | 5,351 | 6,022 |
| Total Assets | 4,643 | 4,420 | 4,757 | 4,744 | 5,086 | 5,163 | 5,843 | 5,813 | 5,107 | 5,591 | 6,044 | 7,011 |
Cash Flow
| Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating | 548 | 80 | 209 | 130 | 257 | 106 | -301 | 51 | 560 | 458 | 183 | 118 |
| Investing | -36 | -33 | -59 | -62 | -62 | -51 | -49 | -25 | -20 | -68 | -205 | -354 |
| Financing | -384 | -105 | -160 | -101 | -129 | 3 | -176 | -10 | -331 | -130 | -139 | 238 |
| Net Cash Flow | 128 | -57 | -11 | -33 | 65 | 57 | -526 | 16 | 208 | 260 | -162 | 2 |
| Free Cash Flow | 502 | 53 | 144 | 64 | 192 | 54 | -350 | 30 | 551 | 358 | -8 | -208 |
| CFO/OP | 722 | 64 | 83 | 58 | 119 | 39 | -229 | 26 | 176 | 116 | 60 | 68 |
Ratios
| Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debtor Days | 129 | 148 | 209 | 186 | 170 | 182 | 193 | 157 | 116 | 130 | 154 | 191 |
| Inventory Days | 460 | 375 | 615 | 395 | 331 | 482 | 373 | 328 | 369 | 418 | 462 | 375 |
| Days Payable | 127 | 89 | 152 | 114 | 142 | 152 | 133 | 85 | 116 | 132 | 129 | 164 |
| Cash Conversion Cycle | 462 | 434 | 673 | 467 | 358 | 512 | 434 | 400 | 369 | 416 | 487 | 401 |
| Working Capital Days | 243 | 246 | 316 | 245 | 232 | 337 | 294 | 242 | 236 | 261 | 295 | 241 |
| ROCE % | 3% | 5% | 6% | 8% | 7% | 2% | 5% | 9% | 10% | 15% | 16% | 8% |
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Company Information
BEML Ltd manufactures a wide range of heavy earthmoving equipment catering to the mining and construction industry, vehicles for defense forces and coaches for the metro and Indian Railways.[1]