Bharat Earth Movers Limited (BEML), a defence, mining and construction, and rail coach manufacturer, has delivered seven times returns to its shareholders in the last nine years, between 2013 and 2022. The profit-making Miniratna public sector undertaking (PSU) stock has surged from ₹206.5 apiece level on March 11, 2013, to ₹1,503 level in the last 9 years, registering a growth of 628% in this period. Since March 2013, an investment of ₹1 lakh in this stock would have grown to ₹7.28 lakh now.
In the last one year, BEML shares have underperformed the benchmark index by generating flat returns as compared to 9% growth in BSE Sensex. The heavy equipment manufacturer was under sell-off heat as its earnings were impacted by the business disruption caused by the Covid-19 pandemic. Intense competition from foreign players like Komatsu, Nissan, and Cummins also weighed the scrip down.
Over the past month, the stock has tumbled 22% as the overall broader market reeled under selling pressure due to negative sentiments caused by geopolitical tensions and record rally in commodity prices. The BEML share price has dropped 12% since the beginning of the calendar year 2022 and more than 8% in the past week.
On Thursday, BEML shares opened with a gain of 2% after falling in the last four consecutive sessions. It rose as much as 5% to hit a high of ₹1,503.55 during the first two hours of the day’s trade so far. The rally was in line with BSE benchmark Sensex which was trading 1,325 points or 2.4% higher at 55,973.
With a market capitalisation of ₹6,198.6 crore, the stock was trading 28% lower than its 52-week high and 34% above its 52-week low. The shares touched its 52-week high of ₹2,084 on December 7, 2021 and a 52-week low of ₹1,120 on April 23, 20221.
Technically, the stock is currently in a ‘mildly bullish’ range, trading lower than 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, as per stock research platform Markets Mojo.
BEML was formed in 1964 as a PSU unit after spin-off of the railway-coach manufacturing facility of Hindustan Aeronautics. Later, the company entered into mining and construction equipment manufacturing in technical collaboration with foreign players. In 2006, it restructured business and divided its operations into three verticals - defence and aerospace, mining and construction, and railway and metro trains.
The Government of India, which currently holds 54.03% stake in BEML, plans to disinvest 26% of its shares in this profit-making company. For the financial year 2020-21, the company recorded its highest ever turnover of ₹3,557 crore against the previous financial year's figure of ₹3,029, registering a growth of 17%. The net profit climbed 9.39% year-on-year to ₹74.80 crore in FY21. The board also recommended a final dividend of ₹1.20 per equity share for the year.
For the December quarter of 2021, BEML’s consolidated net profit jumped 184% to ₹78.51 crore on a 55.6% rise in net sales to ₹1,133 crore compared with the same period last year.
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