Synopsis: Elara Capital reiterates a Buy on BEML Ltd with a Rs. 2,700 target, citing 58% upside driven by strong Q3 growth, a robust Rs. 20,000 crore order book, infrastructure tailwinds, Bhopal expansion, and diversification into TBMs and defence.
The shares of this company are engaged in manufacturing a wide range of heavy earthmoving equipment catering to the mining and construction industry, vehicles for defence forces and coaches for the metro and Indian Railways are in focus after Elara initiated a BUY target of 58 percent upside from the current levels.
With a market capitalisation of Rs. 14,211 cr, the shares of BEML Ltd closed at Rs. 1,706.30 per share, down from its previous close of Rs. 1,721.30 per share. The stock gained 30% over the past year, it is down 8% year-to-date, has declined 17% in the last six months, and is nearly 1% over the past month.
What’s Fueling the Bullish Call
Elara Capital has reiterated its “Buy” rating for BEML with a target price of Rs. 2,700. This suggests that the brokerage expects 58% upside from current levels, driven by strong business momentum and improving fundamentals. The endorsement reflects confidence in BEML’s execution capabilities, order visibility, and strategic positioning in key infrastructure and defence segments.
Strong Q3 Revenue Growth
A major driver of optimism is BEML’s Q3 revenue growth of 24% year-on-year, supported by robust performance in railways, metro projects, and defence manufacturing. These segments have been benefiting from increased government spending on infrastructure and indigenous defence production.
While the company faced a one-off metro provision that temporarily impacted margins, the underlying operational performance remained strong. This indicates that the margin pressure was not structural but largely due to a non-recurring accounting adjustment.
FY26 Growth Target & Expanding Order Book
BEML has reiterated its FY26 revenue growth target of 20%, reflecting management’s confidence in sustained demand. The company’s order book is expected to exceed Rs. 20,000 crore (Rs. 200 billion) by the end of FY26, which provides strong revenue visibility over the medium term. A healthy and expanding order book typically signals stable cash flows and better capacity utilisation in upcoming quarters.
The outlook is further strengthened by a large project pipeline in metro systems, railways, and high-speed rail corridors, areas that are central to India’s long-term infrastructure expansion plans.
Additionally, BEML is undertaking greenfield capital expenditure at Bhopal to expand its rolling stock manufacturing capacity. This capacity expansion is aimed at meeting growing domestic demand and potentially enhancing export opportunities.
Diversification into TBMs & Defence
Another important strategic move is diversification into Tunnel Boring Machines (TBMs) and defence platforms, which supports long-term growth. TBMs are critical for metro and underground infrastructure projects, and domestic production aligns with India’s import substitution goals. Increased focus on defence also positions the company to benefit from rising indigenisation and higher defence capital outlays.
BEML Ltd is a leading Indian public sector enterprise under the Ministry of Defence, engaged in manufacturing rail and metro rolling stock, mining and construction equipment, and defence products. The company plays a key role in India’s infrastructure and indigenisation push, supplying metro coaches, railway systems, armoured vehicles, and heavy earthmoving machinery for domestic and export markets.
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