Prabhudas Lilladher Suggests Buy On Top Dividend Paying Multibagger Railway Stock, TP At Rs 3,550

BEML Ltd, engaged in the business of railways and defence, is recommended to buy for a target price of Rs 3,550 apiece ahead by brokerage Prabhudas Lilladher. On Monday, BEML shares ended at Rs 3,209.65 apiece, marginally up on BSE. Its market cap is around Rs 13,366.43 crore.

The dividend-paying smallcap stock rallied by 13% year-to-date. While in a year, BEML is a multi-bagger with gains of nearly 164%. 5-year gains by BEML are to the tune of 323%.

Vaishali Parekh, Vice President - Technical Research at Prabhudas Lilladher said, "The stock after the steep correction has bottomed out near the 2680 zone and with a short period of consolidation has witnessed improvement in the bias with a positive candle formation maintaining above the 50EMA level of 3070 zone to improve the bias."

Currently with the RSI also gradually regaining strength has much upside potential to carry on the positive move for targets of 3550 and 3770 levels, respectively with support maintained near the 2900 zone, the analyst added.

This Miniratna railway stock has declared an interim dividend of Rs 5 per share having a face value of Rs 10 each for the financial year 2023-24. In percentage terms, the dividend payout is 50% of paid-up share capital. The company turned ex-dividend on February 16 which was also its record date for payment of said interim dividend to the eligible equity shareholders.

In Q3FY24, BEML reported a jump of 1% in its revenue for the third quarter of 2024 from Rs 1036 crore to Rs 1047 crore, whereas its year-on-year (YoY) revenue reported a rise from Rs 2510 cr to Rs 2541 cr, registering a growth of 1%.

Also, in the quarter, the employee cost for the company has dropped by 2% YoY basis, on consistent efforts towards reducing manpower costs. The EBITDA margins for a nine-month period have improved by 34% from Rs 83 crore to Rs 110 crore in the current year over the previous year nine monthly period. The revenue from operations has improved due to Rail & Metro business vertical execution of MEMU orders to Indian Railways RGM to LORAM and Mumbai Metro contracts.

Event the PAT for nine months up to December 2023 has improved from 0.56 crore to Rs 26 crore, whereas the PAT margin has improved from 0.02% to 1.02%. The reducing manpower strength from 5248 in December 2022 to 4948 after a year same period resulted in lessening manpower cost.

BEML operates in three verticals viz. Defence & Aerospace, Mining & Construction and Rail & Metro and has state-of-the-art manufacturing facilities located at Bangalore, Kolar Gold Fields (KGF), Mysore, Palakkad. BEML has a very strong R&D infrastructure. BEML also has a nationwide network of sales and services.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.