BEML share price extends rally to third straight session. What's driving THIS bull trend?

BEML share price in focus: Shares of BEML, which provides engineering solutions across various sectors, including defense, mining, and infrastructure, extended gains to the third straight session on Tuesday, May 27, after a robust performance during the March quarter of the financial year 2024-25 (Q4 FY25).

BEML share price gained nearly 4% in intraday trade today, reaching the day's high of ₹4437.95 apiece. Including today's rise, BEML stock has surged over 21% in the last three days. In May, so far, the PSU stock has risen 37%, following a strong demand for defence counters amid India-Pakistan conflict.

The company's strong Q4 results and the guidance for the ongoing financial year (FY26) further boosted investor sentiment in the counter. Most brokerages also retained their bullish views on BEML stock post the earnings show.

BEML Q4 results

During the March 2025 quarter, BEML, a Miniratna PSU, posted a 12% year-on-year (YoY) increase in profit after tax (PAT) to ₹290 crore, owing to improvement in operating performance.

The earnings before interest, tax, depreciation and amortization (EBITDA) rose by 14.1% YoY to ₹420 crore. EBITDA margin improved by 110bps YoY to 25.6% due to expansion in gross margins and lower employee cost. Overall, revenue was higher than by 9.2% YoY at ₹1,650 crore.

Order book for the year stood at ₹14,610 crore as against the guidance of ₹18,000 crore amid slippage of orders in the next quarter due to delay in decision making in railway and metro projects. However, the management expects these deferred orders to boost the FY26 closing order book to ~ ₹22,000 crore. It expects 60% of the orderbook from R&M and 20% each from defence and mining.

BEML: Is it a stock to buy?

Analysts believe the pace of execution has significantly impacted FY25 revenue and will be key monitorable in the near term. However, they remain bullish on BEML’s long-term prospects.

Healthy order prospects in the modernisation of defense vehicles, expansion into higher value defense segments such as engines and aerospace, large tender pipeline for rail & metro rolling stock, and large capacity expansion leading to a ramp-up in execution and, margins will drive BEML stock price, said brokerage Prabhudas Lilladher.

However, it downgraded BEML stock from ‘Accumulate’ to ‘Hold’ rating given the recent rally in the stock but revised the target price upwards to ₹4,142 ( ₹3,561 earlier), valuing the stock at a P/E of 29x Mar’27E (28x Sep’26E earlier).

Meanwhile, analysts at Elara Securities, reiterated their ‘Accumulate’ rating on the counter and raised BEML's share price target.

“We raise FY26E EPS by 9% and FY27E EPS by 12%, led by margin improvement despite flat topline in FY25. Further improvement is expected in FY26 (given execution of delayed rail projects). We raise our TP to ₹4,860 from ₹3,885, on 37x (from 35x) March FY27E P/E, due to huge orderbook visibility led by rail & defence (significant ramp-up expected in FY26 and FY27 led by execution),” said the brokerage.

We expect an earnings CAGR of 34% in FY25-28E with an average ROE and ROCE of 16% each in FY26E-28E, it added.

Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.