Defense Stock, BEML surges over by 4.2%, here is price target for PSU stock

Shares of BEML Ltd increased by 4 percent during Wednesday's trading session after the public sector unit (#PSU) secured a contract worth Rs 136 crore from the Ministry of Defence for High Mobility Vehicles 8x8. Brokerage analysts anticipate further upside for this defense stock, believing that BEML's cohesive strategy may enhance its operational efficiency.

They noted that the PSU has a strong pipeline and promising growth prospects.

BEML shares rose by 4.25 percent to Rs 4,548.70, bringing its year-to-date increase to 57.44 percent. The company also informed stock exchanges that it has achieved 100 percent indigenization across several critical platforms, including the Pontoon Bridge System, Aircraft Towing Tractor, Aircraft Weapon Loader, 50T Trailer, Wagons, BMP Transmission, and Ejector Air Cleaner Assembly.

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In terms of financials, the revenue has decreased from Rs. 917 crore in Q2 FY24 to Rs. 860 crore in Q2 FY25, which is down by 6.22 percent. The net profit of BEML Limited has dropped by 1.92 percent, from Rs. 52 crore in Q2 FY24 to Rs. 51 crore in Q2 FY25. 

The PSU company revenue and net profit have grown at a CAGR of 7.59 percent and 44.88 percent, respectively, over the last four years. In terms of return ratios, the company’s ROCE and ROE should be 15.2 percent and 11 percent, respectively. The debt-to-equity ratio of the company is to be 0.24x. BEML Limited’s EPS is to be Rs. 68.6. 

With a market capitalization of Rs. 18,780.21 crores, the shares of BEML Limited reached an intraday high of Rs. 4,548.70 per equity share, rising nearly around 4.25 percent from its previous day’s close price of Rs. 4,363. Since then, the stock has retreated and is currently trading at Rs. 4,509.65 per equity share. 

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