Comments
Ashika Stock
BEML (Buy)
CMP: ₹977.30
Target: ₹1,200
BEML (formerly Bharat Earth Movers Ltd) is a strong play in defence space with robust order book of ₹2,000 crore in defence segment. Strong order book across the segment provides strong near-term revenue visibility. Expanding product ranges, country’s rising defence expenditure, government’s Make in India push, bright investment outlook in railway sector and recovery in mining activities are the key catalysts for the company in the long run. According to FICCI, India’s defence spend could reach to $620 billion between FY14-FY22, thus have immense opportunity for domestic defence equipment manufacturers. The defence sector is at an inflection point and poised to grow at a sustainable high rate in the next decade. Offset clause in defence procurement in which foreign players are obliged to source at least 30 per cent of total contract exceeding ₹300 crore to domestic manufacturers are likely to bring lot of business for domestic players such as BEML. Thus, we believe that the company has strong long term growth story given government’s strong focus on revamping defence sector.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.