BEML Limited

Industrials — Conglomerates · NSE

₹1,971.30+₹36.10 (+1.87%)

DalalBaazaar Score

42 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Low

Driven by negative free cash flow, small-cap size, which brings sharper price swings, falling profits.

In simple words: The business is earning a fairly low return on the money invested in it, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:00 pm

Understanding the Business

Company site ↗

The 60-second version of BEML Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

BEML Limited provides products and services to the mining and construction, rail and metro, power, and defense and aerospace sectors in India.

IndustryConglomerates

SectorIndustrials

Employees4,151

Annual revenue₹4,154 Cr

How does it make money?

Turns over ₹4,154 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹8 left at the operating level before interest, tax and depreciation. Each of its 4,151 employees supports ₹1.00 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.00 Cr

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., SIEMENS LTD, ABB INDIA LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 5.9% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE15.2%

What is the outlook?

2 analysts covering the stock expect revenue to grow about 27.0% and earnings to grow about 37.9% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+27.0%

Est. earnings growth+37.9%

Analysts2

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +9% while net margin moved -18% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+9%

Margin effect-18%

DalalBaazaar Score

42/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 3.0% — barely ahead of inflation
✗ Profit has declined at 3.6% a year
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows
✗ Profit fell 51.6% in the latest year

Quality vs. Valuation

Company Quality

39/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

65/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

27.6x

3Y Median

46.2x

40 monthly readings · mean 48.2x · range 18.1x–117.2x

Sector Median

88.8x

median of 3 sector peers

🟢Current valuation is approximately 40% below its 3y median of 46.2x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 69% below the peer median of 88.8x.

vs. its own history

Cheap

46.2x median over 40 months · -40%

vs. sector peers

Cheap

88.8x median of 3 peers · -69%

vs. generic bands

Fair

15x–35x

EV/EBITDA

52.6x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Very low debt
Debt/Equity of 0.11x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 10.1% to 5.9% — often a sign of competition or overexpansion.

Red Flags

6 items require attention · 2 high · 4 watch

🔴Debt has risen sharplyFinancial
Total debt is up 83% over 3 years, from ₹381 Cr to ₹697 Cr.
🔴Receivables growing faster than salesFinancial
Receivables up 84% against revenue up 9% — sales are being booked faster than they are collected.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 8.6x to 5.4x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹263 Cr in the latest year.
🟡Margins are compressingFinancial
EBITDA margin is down 2.1 points over 3 years.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 100% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 40% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 69% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 9.9% to 7.8%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Sales are being booked faster than collected
Receivables are up 84% against revenue up 9%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Growth barely outpaces inflation
Revenue compounding at 3.0% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 6%✓ 7.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Free cash flow remains positive✗ -₹263 Cr
Profit that never becomes cash eventually stops being profit.
4Revenue growth stays above 4% a year✗ 3.0% CAGR
Latest reported year was 29.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5ROCE stays above 8%✗ 5.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 3 neutral · 5 weak

Market Cap

₹16,419 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

27.6x

Fair

Fairly valued against the generic band

P/B Ratio

5.60x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹71.43

Profitable

Profitable on a per-share basis

ROE

4.8%

Weak

Weak capital efficiency

ROCE

5.9%

Weak

Low return on total capital employed

Debt/Equity

0.11x

Low

Conservative leverage

Revenue Growth (YoY)

29.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-51.6%

Falling

Profits are shrinking

Dividend Yield

0.90%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹263 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

27.2x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

-2.6%

Weak

Thin margins leave little room for error

Net Margin

3.9%

Average

Average bottom-line conversion

Current Ratio

2.01

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.71

Defensive

Steadier than the market

52W Range Position

67%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

2003.6 / 1977.0

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

43.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹3,800 Cr	₹3,965 Cr	₹3,839 Cr	₹4,154 Cr	+3.0%
EBITDA	₹376 Cr	₹484 Cr	₹523 Cr	₹325 Cr	-4.7%
EBITDA Margin	9.9%	12.2%	13.6%	7.8%	—
PAT (Net Profit)	₹158 Cr	₹282 Cr	₹293 Cr	₹142 Cr	-3.6%
EPS	₹37.92	₹67.67	₹35.13	₹17	-23.5%
ROE	6.5%	10.6%	10.1%	4.8%	—
ROCE	10.1%	11.9%	11.4%	5.9%	—
Total Debt	₹381 Cr	₹71 Cr	₹317 Cr	₹697 Cr	+22.2%
Free Cash Flow	₹517 Cr	₹357 Cr	-₹94 Cr	-₹263 Cr	—

🟢 Revenue has grown at 3.0% a year over 3 years.

🔴 EBITDA has shrunk at 4.7% a year over 3 years.

🔴 EBITDA Margin has fallen from 9.9% to 7.8% over 3 years (-2.1 pts).

🔴 PAT (Net Profit) has shrunk at 3.6% a year over 3 years.

🔴 EPS has shrunk at 23.5% a year over 3 years.

🔴 ROE has fallen from 6.5% to 4.8% over 3 years (-1.7 pts).

🔴 ROCE has fallen from 10.1% to 5.9% over 3 years (-4.2 pts).

🔴 Total Debt has grown at 22.2% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹517 Cr to -₹263 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹7,011 Cr

Total Liabilities

₹4,077 Cr

Cash & Equivalents

₹7 Cr

Operating Cash Flow

₹118 Cr

Capex

-₹381 Cr

Shareholding (proxy)

Institutional Holding

22.4%

Insider Holding

54.2%

Corporate Actions

Dividend Rate

₹17.68

Ex-Dividend Date

22 Sept 2026

Analyst Consensus

Recommendations

4 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹2,225.75

+12.9% vs CMP

Target Range

₹1,960 – ₹2,600

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%

Recent News

1 positive5 mixed

1:5 Stock Split + Rs 146 Dividends Today: BEML, IRCTC, HFCL, KPI Green Energy, Stocks Turn Ex-Date On Sept-22

Goodreturns, 16 OctCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

BEML Forecast — Price Target — Prediction for 2027

TradingView, 25 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

BEML Share Price News: stock gains 6.85% today

Univest, 18 SeptPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

HAL, Bharat Dynamics, BEML, BEL: Which defence stock to buy for maximum gains amid next expansion phase | Target price

Livemint, 23 SeptCapacity

🟡Mixed / dependsCapacity additions can raise revenue over two to three years, but the capital spend usually pressures free cash flow first. Worth checking whether the capex is funded from operations or from borrowing.

BEML shares rise 2% after securing Rs 180 crore Vande Bharat sleeper order

The Economic Times, 02 SeptPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

BEML Share Price Rallies Over 5% On Bagging This Major Deal

NDTV Profit, 18 SeptPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health

MiddlingValuation · Risk

WeakBusiness Quality · Growth · Profitability

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 2 high-severity red flags sit above this conclusion and should be read first.

4 of 5 tripwires tripped — Debt / EBITDA stays below 2x; Free cash flow remains positive; Revenue growth stays above 4% a year; ROCE stays above 8% · see Key things to watch ↑