Elara Securities Maintains Positive Forecast for BEML Amid Expanding Order Pipeline

Elara Securities has reaffirmed its optimistic stance on BEML Ltd $BEML.NS following a recent meeting with the company’s management. The brokerage foresees a notable expansion in BEML’s order book to ₹22,000–23,000 crore by FY26, citing strong project momentum, scale benefits, and refined cost structures. A “Accumulate” rating has been retained, with a target price of ₹4,860.

Project Execution and Demand Drive Order Book Expansion

BEML is positioning itself for significant business growth through strategic contracts in metro rail, defence, and transportation sectors. The expected increase in the order book is attributed to several contributing factors, including:

• Continued rollout of metro infrastructure, especially the Bangalore Metro;

• Scheduled deliveries for Vande Bharat trainsets, including nine units in the pipeline;

• Improved efficiency from cost optimization across operations;

• Increasing participation in government-backed capital expenditure programs.

This anticipated growth reflects broader tailwinds in India’s manufacturing and infrastructure ecosystem.

Revenue Surge Anticipated in FY26

According to BEML’s management, revenue is expected to grow by 20% year-on-year in FY26, supported by faster execution of high-value orders and a healthy backlog. The delivery schedule of train prototypes, already approved in April, suggests sustained momentum in upcoming quarters. The production ramp-up is expected to feed directly into earnings, while the company leverages its operational scale to improve margins and return metrics.

Profitability and Return Metrics Signal Financial Resilience

Elara anticipates compound annual profit growth of 34% during the FY25–FY28 period. This forecast is backed by stronger asset utilization, favorable project mix, and cost discipline. The firm also expects average ROE and ROCE of 16% for FY26–28, supported by a consistently growing order base and stable margin outlook. Valuation-wise, the target price of ₹4,860 is based on a 37x forward P/E multiple for FY27, aligned with sector benchmarks and earnings visibility.

Investment Case Strengthened by Execution and Policy Tailwinds

The combination of clear project pipelines, supportive public investment, and rising operational efficiency enhances BEML’s medium-term visibility. With strong government focus on transportation and defence manufacturing, the company is positioned to benefit from upcoming tender cycles and infrastructure disbursements.