The defense PSU BEML Limited is a stock to watch during the November 11-15, 2024, trading week as it approaches its Q2 FY25 earnings announcement on Monday, November 11. Despite not being among the large-cap defense giants like Bharat Electronics (BEL) or Hindustan Aeronautics (HAL), nor the midcap PSU BEML Ltd under the Defence Ministry, BEML has gained traction as a strong technical pick.
Investment Recommendation: Vaishali Parekh, the Vice President and Head of Technical Research at Prabhudas Lilladher, has recommended a “Buy” on BEML, setting a target price of ₹5,600 with a stop-loss at ₹3,600. The stock recently rebounded from a correction and is showing promising indicators, moving above the 50-day and 200-day moving averages at ₹3,880 and ₹3,770, respectively, which indicates a positive trend. Additionally, the Relative Strength Index (RSI) is on the rise, suggesting further potential for upside movement.
Stock Performance: As of Friday, November 8, BEML closed at ₹4,189.75 on the BSE, reflecting a 1.70% dip but maintaining a weekly gain of 4.2%. The stock has seen significant year-to-date growth, with a 48% rise on the BSE. Its 52-week high and low are ₹5,489.15 and ₹2,082.70, respectively. Currently, BEML’s return on equity (ROE) is a healthy 10.88%, while its price-to-earnings (P/E) ratio stands at 60.66x.
Dividend Track Record: BEML has a strong history of dividend payouts, with 34 dividends since August 2001. In the last year, the company distributed a ₹20.50 dividend per share, providing a dividend yield of 0.54%.
Recent Contract Win: BEML also secured a notable contract from the Integral Coach Factory (ICF) in Chennai for the design, manufacture, and commissioning of two high-speed trainsets (each with 8 cars) valued at ₹866.87 crore. This includes significant upfront investments in design, development, tooling, and testing facilities, setting a foundation for future high-speed projects in India.
Company Overview: As a “Schedule ‘A’” company under India’s Ministry of Defence, BEML Limited is instrumental across critical sectors including Defense, Aerospace, Rail, Metro, Mining, and Infrastructure. The company operates through three main verticals—Defense & Aerospace, Mining & Construction, and Rail & Metro—and maintains advanced manufacturing facilities in Bangalore, Kolar Gold Fields, Mysore, and Palakkad. BEML also has a comprehensive network of sales and service locations nationwide, alongside robust R&D infrastructure.
In summary, BEML is positioned as a technically promising stock for investors with its earnings report imminent, ongoing growth in stock performance, substantial contract wins, and an established role within India’s defense and infrastructure sectors.
Disclaimer: This information is for educational and informational purposes only and should not be considered as financial or investment advice. Please conduct your own research or consult a financial advisor before making any investment decisions. Past performance is not indicative of future results.
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