BEML wins third order in August, shares rise 5%

Shares of state-owned BEML Limited rose 5% on Monday after the firm said it has secured an order valued at nearly Rs 1,888 crore from Integral Coach Factory to manufacture, supply, test, and commission 600 fully functional Linke Hofmann Busch (LHB) coaches. BEML shares rose 4.88% to Rs 4045.60 against the previous close of Rs 3857. 10 on BSE. Market cap of the firm rose to Rs 4045.60. The stock rise reflects market optimism regarding the company's new orders and its strategic initiatives in different sectors.

This order is a notable achievement for BEML, reinforcing its position in the railway manufacturing sector. The railway segment remains a critical focus for the company as it continues to expand its operations and strengthen its market presence. The deal is expected to enhance BEML's reputation as a reliable partner in the railway industry, potentially leading to more such contracts in the future.

In its financial results for the first quarter, BEML reported a net loss of Rs 64 crore. The reported loss is marginally lower than last year's Rs 70.5 crore for the same period. The company's revenue remained flat at Rs 634 crore, falling short of the expected 9% increase to Rs 689 crore. The EBITDA loss for the quarter stood at Rs 49 crore, slightly higher than the anticipated Rs 45 crore, but better than the previous year's loss of Rs 50.1 crore. Despite these challenges, BEML is focusing on improving operational efficiency and cost management strategies to mitigate financial pressures.

On August 9, BEML received its maiden overseas contract in the Rail and Metro segment from Malaysia for the Retrofit and Reconditioning of the Mass Rapid Transport System, valued at $1 million.

On August 4, BEML secured a Rs 282-crore defence order for high mobility vehicles and export orders worth $6.23 million from the CIS region and Uzbekistan. These developments indicate BEML's strategic diversification and commitment to enhancing its market presence both domestically and internationally.

Analysts believe that the company's recent contract wins and ongoing projects may lead to improved financial performance in the upcoming quarters. The company's proactive approach in exploring new markets and sectors is seen as a positive step towards long-term growth.