BEML is an A /T+1 group Construction Vehicles company having Face value of Rs. 10. It is the leading manufacturer of heavy earth moving equipment in Asia and a Mini Ratna Category - I PSU company under the Ministry of Defence, Govt. of India. It operates in three distinct business verticals namely Mining & Construction, Defence & Aerospace and Rail & Metro. Its Defence portfolio includes Aircraft Towing tractor, Aircraft Weapon loading trolley, Armored recovery and Repair vehicle, Armoured recovery vehicle, Prithvi Missile launcher, Pontoon Bridge set, Rocket launcher, Wagons and Milrail coach etc. Its Mining and construction include various equipment and machineries for opencast mining, underground mining, aggregates, and other construction equipment. Its Rail and metro business includes all types of Train engines, wagons, vans, tracklaying equipment and metro cars of different gauges. BEML is also exploring the international market opportunities for its various products such as Armoured Personnel Carrier, Wheeled Armoured Vehicle, Armoured Recovery Vehicle, Medium Bullet Proof Vehicle etc and it has already marked its presence in international markets by exporting its products to 70 countries. So far company has supplied 8500+ High Mobility vehicles 350+ ARVs, 3200 + trailers and military wagons and 330+ pontoon bridges to Defence Services, 18000+ Passenger railway coaches and 900+ EMUs to Indian Railways and 1750+ Metro cars to Metro corporations. The order book position the company as on 01.04.2023 stood at Rs. 8,570 crores as against Rs. 9,192 crores in the previous year and over over 75% of the business generated by the company was through In-hou se R&D Developed products in FY23. Its exports aggregated upto Rs. 830.14 Crore (which includes physical exports of Rs 178.42 Crore and deemed export of Rs 651.72 Crore) and received export incentive of Rs.1.92 Crore during FY 2022- 23 as against exports of Rs 564.74 crore.

Fundamentals (FY22-23):

Financial Results:

Company’s Net Sales was Rs 576.91 crore in June 2023 down 13.79%, Quarterly Net Loss at Rs. 75.01 crore in June 2023 up 8.92%  and EBITDA stands negative at Rs. 49.33 crore in June 2023 up 10.34% as compared to June 2022.

Key Points:

1. BEML has recently signed an MOU with Bharat Electronics Limited, Bangalore for joint development and productionisation of Missile modules, Airframes and other mechanical systems for upcoming missile program.
2. It has also entered into an MOU with Indian Navy for development of customised storage and handling system for various types of ammunition.
3. The company has entered into a licence agreement with R&DEE, an DRDO organisation for Transfer of Technology (TOT) for development and production of demining equipment (TRAWL & TWMP) to be used on T72/T90 main battle tanks.
4. It has also signed MoU with M/s. CDSpace Robotics Pvt Ltd, a start-up under incubation of IIT-Kanpur. Under the MoU, both the companies will synergize the capabilities for jointly developing UAVs for Military requirements and aims to indigenize the key aggregates of the UAV.
5. BEML has entered into MoU with Pushpak Aerospace and Defence for manufacture of critical sheet metal components and Surface Treatment operations for larger diameter rings and ISO grid panels for the GSLV Structures which are very critical in nature which BEML is currently executing for ISRO.
6. It has also entered into MoU with Garuda Aerospace where it will be taking up assembly and integration of Drones.
7. BEML has entered into MoU with Hexagon Technologies, for association in the field of automation, Metrology and analysis software for smart factory set up for various defence programs.
8. Recently it has signed a MoU for manufacturing and supply of Metro Rolling Stock with Delhi Metro Rail Corporation (DMRC) led SPV, who have been shortlisted for constructing the Bahrain Metro Rail Project Phase-1.
9. BEML handed over the first rake of indigenously built Rail Grinding Machine (RGM96) to LORAM MAINTENANCE BY WAY, USA from its manufacturing facility located in KGF Rail Coach Unit II. It was the first time RGM96 was manufactured outside of USA. The machine is likely to be commissioned into service by Indian Railways, shortly with the help of whcih life cycle of the track would increase by minimum 25% which results in substantial savings to Indian Railways.
10. It has also signed a Memorandum of Understanding with Rites to explore and jointly bid for opportunities in the fields of metro systems and export of rolling stock.
11. BEML has received export orders from Cameroon and Bangladesh for supply of 71 units of construction equipment consisting of Bulldozers, Excavators, Wheel Loaders, Motor graders and Compactors for Cassava Farm Project of Cameron and supply of construction equipment consisting of Wheel Dozer for their construction, Repair and Maintenance of Road and Infrastructure projects in Bangladesh respectively.
12. It also signed various MOUs with different companies for various purposes such as one with Advance Navigation Positioning Company (ANPC) for joint manufacturing of transponder landing system (TLS) for Indian armed forces, Airport Authority of India (AAI) and Oil exploration companies. One with Primoco UAV SE, Czech Republic for manufacturing of '150 kg class' Surveillance UAV for Indian as well as global requirements such as Intelligence based agriculture, Remote mapping, Pipeline Monitoring, Mining Support, Security & intelligence, Disaster Management & Surveillance and with IIT Kanpur for joint development and manufacturing of 25 kg class Tactical UAV for Armed forces.
13. BEML has also signed a Memorandum of understanding (MoU) with Council of Scientific and Industrial Research (CSIR)-National Aeronautics Laboratory (NAL) to develop in the areas of advance composite and autoclaves; Mini unmanned aerial vehicles, Design & analysis of aircraft structure and systems. It has also teamed with NAL for joint development of 2-seater trainer aircraft through Technology of transfer (ToT).
14. Recently it had bagged order from Ministry of Defence (Army) for supply of Command Post Vehicles with contract value of Rs 101 crore approximately.
15. It has also received an export order from KAMSS Ltd, Russia, for BEML Dozer BD355 worth $19.71 million. The contract to be executed in different phases starting from August 2023.
16. Company has also partnered with ISRO for First off Structure for Launch Vehicle Mark 3 Program of Strap on Base Shroud (SBS) Assembly.

In last 3 Years the stock has given a whooping return of 302.58% as compared to the rise of Sensex and Nifty in the same period.

Company has started the year 2023-24 with a positive note by booking more than Rs. 5000 crore worth of orders and orders to the tune of over Rs. 10,000 crore are in the pipeline across all three business verticals which includes Rs. 4000 crore defence orders. The company is expecting its Defence revenue to touch Rs. 5000 crore in next 5 years. Looking at the boost of Government in improving rail infrastructure of the country and increased infusion towards Defence, Aerospace and Space programs the company is well poised to enjoy huge flow of orders in upcoming years. Considering strong background in mining, defence, rail and metro projects along with its foray into UAV and other new age equipments, robust order book positions, backed by government’s Make in India and Atmanirbhar Bharat initiatives and good financial positions the company can be added in portfolio with buy in dips strategy for long term period.

 - HET ZAVERI

info@smartinvestment.in

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