BEML (BEML IN) – Q3FY26 Result Update – Watchful on execution and order finalizations – Upgrade to ‘Accumulate’
Published on 13 Feb 2026
We revised our FY27/FY28E EPS estimates by -3.5%/-2.7% factoring in delay in execution. BEML reported a revenue growth of 23.7%, while EBITDA margin expanded 136bps YoY to 8.3% after adjusting for a one-time provision of Rs800–850mn related to metro projects. Management guided for ~15-20% YoY revenue growth, with EBITDA margins expected to remain in line with FY25 levels (13–14%), supported by largely stabilized supply chains with improving defense and R&M revenue mix. The order book remains healthy at Rs163.5bn, with Q3 order inflows of Rs10.5bn (on a high base), and is expected to reach ~Rs200bn in FY26, aided by healthy domestic inflows across railways, metro and defense along with a potential export order. The proposed Rs15bn greenfield rail manufacturing facility is expected to increase coach capacity from ~200-250 units to ~800 units per annum over time. Additionally, BEML’s focus on TBM development under a clean-sheet design, with a 2.5-year gestation period, targets an estimated India opportunity of ~US$5bn over the next 10 years. The stock is currently trading at a PE of 27.3x/22.1x on FY27/28E. We upgraded our rating from ‘Hold’ to ‘Accumulate’ given recent correction in the stock price with a revised TP of Rs1,922 (Rs1,982 earlier) valuing the stock at a PE of 27xSep’27E (same as earlier).
