BEML Stock Price Target Raised to Rs 1940 by Prabhudas Lilladher

BEML Faces Slower Execution, Revises Earnings Estimates

Prabhudas Lilladher has revised its earnings per share (EPS) estimates for BEML, factoring in slower-than-expected execution across key segments. The company reported revenue growth of 8.6% year-over-year, while its EBITDA margin contracted by 88 basis points to 24.7% (adjusted for a one-time expense of Rs1.7 billion related to the closure of a legacy matter). Despite this, management highlighted that export deliveries in FY27 are expected to partly offset the exceptional charge through favorable foreign exchange realizations.

BEML's Order Book Remains Healthy

The company's order book remains healthy at approximately Rs159 billion, albeit below the earlier guidance of approximately Rs200 billion. The order book is divided among various segments, with railways contributing approximately 65%, defense approximately 25%, exports approximately 6%, and mining approximately 4%. Management highlighted an order pipeline of approximately Rs100 billion and expects a success rate of approximately 50%, supporting healthy order inflows during FY27. Order inflows are expected to be led by railways, driven by upcoming metro rolling stock awards, followed by defense, mining, and exports.

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Outlook and Recommendations

The stock is currently trading at 31.6x/23.9x FY27E/FY28E earnings. Prabhudas Lilladher has rolled forward to Mar'28E and maintained its 'Accumulate' rating with a revised target price of Rs1,940 (Rs1,922 earlier), at a price-to-earnings multiple of 27x Mar'28E (27x Sep'27E earlier).