Urban mobility expected to propel business & margins in medium term
BEMLs mining and construction business, plays a crucial role with coal mining operations gaining thrust as India targets higher power generation by 2030. That apart BEMLs diversified business portfolio spanning Defense, Rail & Metro, and Mining & Construction, with the latter emerging as a dominant segment within the company’s operations in the next 3 years. BEMLs change in business mix in the past3 years embracing innovation; from launching India’s largest electric excavator to integrating AI-driven features in mining machinery augers well for the company in the medium term. Expanding its footprint across numerous countries, BEML has significantly increased its global presence in recent years. Amidst challenges such as supply chain disruptions and intense competition. Given BEML’s strong growth trajectory and strategic positioning, we maintain a bullish outlook and advocate a buy at current levels.
We initiate buy with a price target of INR 4,700
BEML will continue to be a pivotal entity in India’s mining sector, particularly in coalmining operations. Its focus on innovation, strategic restructuring, and expansion into global markets place it on a strong growth trajectory. BEML’s presence in the sunrise sector such as urban mobility, mining / heavy equipment and its medium -term growth prospect. We assign a valuation of 1-Yr forward earnings of 40 times its projected FY27 earnings, reflecting strong growth in order book, margin expansion potential, and changing revenue profile in the medium term.
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