Why BEML Share Price is Rising

Heavy equipment is an indispensable asset for infrastructure development and economic growth. From construction sites to mining operations, heavy machinery plays a vital role in driving progress.

India's heavy equipment industry has witnessed a surge in recent years, fueled by government initiatives and increasing infrastructure spending. This growth has created opportunities for companies operating in this sector.

BEML, a leading player in the Indian heavy equipment industry, has been at the forefront of this growth. The company specialises in the manufacturing of a wide range of heavy engineering products, including earthmoving equipment, mining machinery, and defense vehicles.

BEML has recently captured investor attention with its impressive stock performance. The company's share price surged by 9% following a recent announcement, indicating positive sentiment and growth prospects.

Let's delve into the details of this announcement to understand the factors driving this rally.

Big Order Win

BEML has secured a significant contract from the Integral Coach Factory (ICF) in Chennai. The deal involves designing, manufacturing, and commissioning two high-speed trainsets, each consisting of 8 cars. The cost of each car is Rs 278.6 million (m). The total value of the contract is Rs 8.7 billion (bn).

This amount includes various costs such as design, one-time development, non-recurring expenses, and costs for jigs, fixtures, tooling, and testing facilities. These resources will be utilised for future high-speed projects across India.

This initiative represents a key advancement in India's high-speed rail development. It will introduce the first indigenously designed and manufactured trainsets, which are expected to achieve a test speed of 280 km/h.

The trainsets will be produced at BEML's rail coach complex in Bengaluru, with delivery planned for the end of 2026. The fully air-conditioned trains will feature a Chair Car configuration. They will include modern passenger facilities such as reclining and rotatable seats, special accommodations for passengers with restricted mobility, and onboard infotainment systems.

This new contract enhances BEML's status as a leader in rolling stock manufacturing. The contract and the associated projects are driving BEML share price upward as they reflect the company's growth potential and commitment to innovation in the rail industry.

BEML was also in focus a few days ago after a new board of director was appointed.

Appointment of New Director

The President of India has appointed Rajeev Kumar Gupta as a Director on the board of BEML, effective from 11 October 2024. Mr. Gupta, who graduated in Electronics Engineering from BIT Sindri, brings over 35 years of public sector experience.

His career includes roles at SAIL and BHEL, where he contributed to various functions such as manufacturing, marketing, project execution, and international business.

Before joining BEML, he was executive director at BHEL, focusing on corporate strategy and communication. During his tenure, he improved media presence, advanced technology in storytelling, and managed investor relations effectively.

His leadership in BHEL's transportation business led to significant achievements, including a key order for semi-high-speed trains. Gupta has also played a crucial role in expanding BHEL's international business and participated in various industry forums.

What Next?

BEML is poised for growth with its recent re-organisation into eleven strategic business units (SBUs) and two micro-SBUs. This structure aims to streamline operations and increase efficiency.

The focus will be on expanding the order book, targeting between Rs 20-30 bn, primarily in defense, rail, and metro sectors.

The company plans to enhance execution strategies to stabilise its SBUs. Future product developments, like the 1500 HP engine for battle tanks, will further diversify offerings.

BEML also aims to tap into the mining and construction export markets, anticipating significant contributions to revenue.

The company is also focusing on enhancing its manufacturing capabilities.

With all these strategies, BEML aims to solidify its market position and meet the growing demands of its sectors.

How BEML Share Price has Performed Recently

In the past five days, BEML share price has rallied 6%. In the last month, it is down 1.4%.

In 2024 so far, its share price has surged 36.1% and it has rallied 60.3% in the last one year.

The stock touched its 52-week high of Rs 5,489.2 on 5 July 2024 and a 52-week low of Rs 1,904.5 on 26 October 2023.

About BEML

BEML is a Public Sector Undertaking for manufacture of rail coaches and spare parts and mining equipment at its Bangalore Complex.

The company has emerged in the forefront of heavy engineering industry with a track record of growth and revenues for over four decades.

The company is a multi-technology company offering high-quality products for diverse sectors of economy such as coal, mining, steel, aviation, defence, metro, and much more.

BEML operates on three major business verticals for associated equipment manufacturing namely mining & construction, defence and rail & metro.

In addition to the above, the company also operates three strategic business units (SBUs) namely technology division for providing end-to-end engineering solutions, trading division for dealing in non-company products and international business division for export activities.

For more details, see the BEML company fact sheet and quarterly results.

And for a sector overview, read our engineering sector report.

You can also compare BEML with its peers.

BEML vs BHEL

BEML vs Bharat Electronics

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