Companies

BEML pegs Rs 10,000-cr milestone on revamp

Madhumathi D. S. Bangalore | Updated on February 25, 2011 Published on February 24, 2011

Mr V.R.S. Natarajan

BEML, a Defence public sector undertaking, may hive off one or two businesses, possibly rail and metro, in a corporate restructure it plans to roll out in fiscal 2012-13, according to its top official.

Mr V. R. S. Natarajan, CMD of BEML, said, “We have entrusted the job of looking at BEML's second corporate plan to IIM-B [with the aim of] taking it from a turnover of Rs 5,000 crore to Rs 10,000 crore [in five years.] The final meeting was held today and the proposals will be submitted to us by the end of March.”

Unbundling some of its business units was among many options before it. Nothing was firmed up as any decision would be cleared by the board and the Government in that order, Mr Natarajan told Business Line.

New businesses

The revamping would include diversification into new and high-growth businesses such as dredging and expansion in the aerospace segment. BEML targets a turnover of Rs 5,000 crore by 2012-13 and Rs 10,000 crore by its 50th anniversary in 2017. To achieve this, it would need to grow at a rate of 15-20 per cent a year.

Expectations

BEML expects a turnover of Rs 4,200 crore this fiscal.

The rail and metro coaches division had matured into yielding revenue of Rs 300 crore. This unit supplied coaches for the Delhi Metro and the upcoming Bangalore metro rail projects. The next opportunity would be in the two-year-old aerospace business, which could also be developed independently, Mr Natarajan had indicated recently. It was expected to generate Rs 100 crore in revenue and touch Rs 1,000 crore by 2016-17.

Dredging

Dredging, an untapped Rs 6,000 crore opportunity in the country as per an Ernst & Young study, was BEML's new interest, he said; the company would make equipment for this sector over the next three years, aiming at a business of Rs 1,000 crore.

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Published on February 24, 2011
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