Up 50% in 3 weeks; why brokerages have upped their targets this PSU despite downgrade
BEML shares: The state-owned commercial vehicle player's stock has surged nearly 50 per cent in less than three weeks, delivering healthy returns to the investors.
- May 27, 2025,
- Updated May 27, 2025 2:52 PM IST
Shares of BEML Ltd have surged nearly 50 per cent in less than three weeks, delivering healthy returns to the investors. Even after deferring the dividend announcement, the state-run manufacturer of heavy vehicles has delivered a strong set of performance in the March 2024 quarter. Brokerage firms, tracking the stock have upped their target prices, but with some downgrades.
Shares of BEML rose nearly 4 per cent to Rs 4437.95 on Thursday, with its total market capitalization nearing Rs 18,500 crore mark. The stock has soared nearly 50 per cent in less than three weeks from Rs 3,000 mark, hit on May 8 2025. The stock has soared nearly 90 per cent from its 52-week low at Rs 2,346.35
BEML reported a net profit of Rs 288 crore for the fourth quarter of the financial year 2025, marking a rise of 12 per cent on a year-on-year (YoY) basis. The company's revenue from operations rose over 9 per cent YoY to Rs 1,652.53 crore for the quarter under review. However, BEML deferred the declaration of its final dividend for its shareholders.
BEML's order book stood at Rs 1,035 crore and Rs 1,564 crore worth of orders were executed during Q4 as of March 31, 2025. However, the company had declared the second interim dividend of Rs 15 per equity share on May 9, for which The PSU company had set May 15 as the record date to determine the eligibility of the shareholders set to receive the payment.
BEML reported robust 4QFY25 operational performance led by decent execution during the quarter. However, the surprise came in the form of better than estimated margin performance which led to a robust operational performance leading to an Ebitda of Rs 420 crore with the margin spiking 110 bps YoY to 25.6 per cent, said Antique Stock Broking.
"We have baked in 20 per cent revenue CAGR over FY25- 27E while earnings are expected to report 44 per cent CAGR over FY25-27E. We continue to retain 'buy' with an unchanged target price of Rs 4,115, valuing the company at 28 times its FY27E EPS," it added.
BEML’s FY25 revenue was flat due to delayed execution of rail & metro orders. However, margin improved 170 bps YoY in FY25. The management has guided for revenue to grow 20 per cent in FY26, with margin improvement at 150 bps YoY and the order book doubling in FY26, led by receipt of large tenders, said Elara Capital.
"We raise our target price to Rs 4,860, on 37 times March FY27E P/E due to prospects of margin improvement and huge orderbook visibility. But we reiterate an 'accumulate' rating on the stock. We expect an earnings CAGR of 34 per cent in FY25-28E with an average ROE and ROCE of 16 per cent each in FY26E-28E." it added.
PL Capital revised our FY26/27E EPS factoring in deferred orders and execution delays. BEML reported a strong quarter, with revenue growing 9.2 per cent YoY and EBITDA margin improving by 110 basis points, supported by better material cost management and increased defence contributions, it said.
"Growth in the railway and metro segment will be driven by the execution of large-scale projects such as Bangalore Metro and Vande Bharat. The defence segment’s share in revenue and orders is projected to rise, supported by government initiatives in emergency procurement and combat engineering," PL added but downgraded the stock to 'hold' with a target price of Rs 4,142.
Shares of BEML Ltd have surged nearly 50 per cent in less than three weeks, delivering healthy returns to the investors. Even after deferring the dividend announcement, the state-run manufacturer of heavy vehicles has delivered a strong set of performance in the March 2024 quarter. Brokerage firms, tracking the stock have upped their target prices, but with some downgrades.
Shares of BEML rose nearly 4 per cent to Rs 4437.95 on Thursday, with its total market capitalization nearing Rs 18,500 crore mark. The stock has soared nearly 50 per cent in less than three weeks from Rs 3,000 mark, hit on May 8 2025. The stock has soared nearly 90 per cent from its 52-week low at Rs 2,346.35
BEML reported a net profit of Rs 288 crore for the fourth quarter of the financial year 2025, marking a rise of 12 per cent on a year-on-year (YoY) basis. The company's revenue from operations rose over 9 per cent YoY to Rs 1,652.53 crore for the quarter under review. However, BEML deferred the declaration of its final dividend for its shareholders.
BEML's order book stood at Rs 1,035 crore and Rs 1,564 crore worth of orders were executed during Q4 as of March 31, 2025. However, the company had declared the second interim dividend of Rs 15 per equity share on May 9, for which The PSU company had set May 15 as the record date to determine the eligibility of the shareholders set to receive the payment.
BEML reported robust 4QFY25 operational performance led by decent execution during the quarter. However, the surprise came in the form of better than estimated margin performance which led to a robust operational performance leading to an Ebitda of Rs 420 crore with the margin spiking 110 bps YoY to 25.6 per cent, said Antique Stock Broking.
"We have baked in 20 per cent revenue CAGR over FY25- 27E while earnings are expected to report 44 per cent CAGR over FY25-27E. We continue to retain 'buy' with an unchanged target price of Rs 4,115, valuing the company at 28 times its FY27E EPS," it added.
BEML’s FY25 revenue was flat due to delayed execution of rail & metro orders. However, margin improved 170 bps YoY in FY25. The management has guided for revenue to grow 20 per cent in FY26, with margin improvement at 150 bps YoY and the order book doubling in FY26, led by receipt of large tenders, said Elara Capital.
"We raise our target price to Rs 4,860, on 37 times March FY27E P/E due to prospects of margin improvement and huge orderbook visibility. But we reiterate an 'accumulate' rating on the stock. We expect an earnings CAGR of 34 per cent in FY25-28E with an average ROE and ROCE of 16 per cent each in FY26E-28E." it added.
PL Capital revised our FY26/27E EPS factoring in deferred orders and execution delays. BEML reported a strong quarter, with revenue growing 9.2 per cent YoY and EBITDA margin improving by 110 basis points, supported by better material cost management and increased defence contributions, it said.
"Growth in the railway and metro segment will be driven by the execution of large-scale projects such as Bangalore Metro and Vande Bharat. The defence segment’s share in revenue and orders is projected to rise, supported by government initiatives in emergency procurement and combat engineering," PL added but downgraded the stock to 'hold' with a target price of Rs 4,142.