BEML (BEML IN) – Q4FY26 Result Update – Execution and order finalizations remain key monitorable – Accumulate

We revise our FY27E/FY28E EPS estimates by -13%/-7.0%, factoring in slower-than-expected execution across key segments. BEML reported revenue growth of 8.6% YoY, while EBITDA margin contracted by 88bps YoY to 24.7% (adjusted for a one-time expense of Rs1.7bn related to the closure of a legacy matter). Although execution remained soft during the quarter, management highlighted that export deliveries in FY27 are expected to partly offset the exceptional charge through favorable forex realizations. The order book remains healthy at ~Rs159bn, albeit below the earlier guidance of ~Rs200bn, with railways contributing ~65%, defense ~25%, exports ~6% and mining ~4%. Management highlighted an order pipeline of ~Rs100bn and expects a success rate of ~50%, supporting healthy order inflows during FY27. Order inflows are expected to be led by railways (~65–70%) driven by upcoming metro rolling stock awards, followed by defense (~20%), mining (~5%) and exports (~5%). Export contribution is also expected to improve, with exports likely to account for ~10% of the order book by FY27-end, supported by defense and rolling stock opportunities. While the opportunity pipeline remains healthy, timely order finalization, execution ramp-up and conversion of the bidding pipeline into orders will remain key monitorable. The stock is currently trading at 31.6x/23.9x FY27E/FY28E earnings. We roll forward to Mar’28E and maintain our ‘Accumulate’ rating with a revised TP of Rs1,940 (Rs1,922 earlier), at PE multiple of 27x Mar’28E (27x Sep’27E earlier).