Rs 15.50/Sh Dividend Soon: Railway PSU BEML Stock Gives 25% Returns In 2 Days; Prabhudas Says BUY

Multibagger railway PSU stock, BEML has been skyrocketing for two consecutive trading sessions, giving nearly 25% returns. The upbeat momentum in BEML shares is despite the company missing estimates in Q4 top-line and recording disappointing order inflows. The upside can be attributed to its healthy margin improvement, and that is why, Prabhudas Lilladher has recommended BUY on the stock.

On May 14, BEML shares ended at Rs 3801.45 apiece, up by 3.31% on BSE with a market cap of Rs 15,830.95 crore. The stock almost touched its Rs 4,000 mark, as it witnessed an intraday high of Rs 3997.25 apiece on Tuesday.

The stock had rallied by 14.21% on May 13. Accordingly, so far this week, the stock jumped by 24.5% on BSE. Last week, the stock stood at Rs 3,209.80 apiece on May 10.

BEML has declared a final dividend of Rs 15.50 per equity share (i.e.155 % of paid-up share capital).

As per Amit Anwani, Research Analyst, Prabhudas Lilladher, BEML's Q4 earnings were a big miss on the topline & disappointing order inflows cushioned by healthy margin improvement.

Anwani added, "Consolidated revenue rose 9.1% YoY to Rs15.1bn (PLe: Rs19.0bn; consensus estimate: Rs18.8bn). Gross margin expanded by 263bps YoY to 49.5% (PLe: 46.1%)."

Further, Anwani said, "EBITDA grew 29.1% YoY to Rs3.7bn (PLe & consensus estimate: Rs4.1bn). EBITDA margin increased by 381bps YoY to 24.5% (PLe: 21.6%; consensus estimate: 21.9%), aided by gross margin expansion and lower employee costs (down 2.6% YoY to Rs2.0bn)."

In terms of the bottom line, as per Anwani, PAT jumped 62.8% YoY to Rs2.6bn (PLe: Rs2.8bn; consensus estimate: Rs3.0bn), led by healthy margin improvement and a significantly lower effective tax rate at 26.1% (vs 43.2% in Q4FY24).

Additionally, Anwani said, "Q4FY24 order inflow came in at Rs11.3bn, down 6.3% YoY. Order book stands at Rs118.7bn, up 38.5% YoY (2.9x FY24 revenue)."

Lastly, Anwani added, "The stock currently trades at 32.8x/24.9x FY25/26E earnings." The analyst has given BUY rating on BEML shares while the target price is yet to be announced.

BEML Limited (formerly Bharat Earth Movers Limited) was established in May 1964 as a Public Sector Undertaking for the manufacture of Rail Coaches & Spare Parts and Mining Equipment at its Bangalore Complex. The Company is listed on both Exchanges (BSE & NSE) with the Government of India owning 54.03% and the rest 44.97% is held by Financial Institutions, Foreign Institutional Investors, Banks, Public and Employees.

BEML Limited, a 'Schedule 'A' Company under the Ministry of Defence, Govt. India, plays a pivotal role and serves India's core sectors like Defence, Rail, Power, Mining and Infrastructure.