BEML’s mega bullet train order puts execution in spotlight
BEML’s ₹5,400 crore bullet train order takes its order book to ₹22,000 crore, but investors will now watch whether capacity expansion and better execution can translate into stronger margins.
BEML Ltd’s shares are up about 4% after the company secured its largest-ever single order worth ₹ 5,400 crore, equivalent to its full-year FY26 order inflow. This takes its order book to ₹ 22,000 crore, or about five times trailing twelve-month revenue.
The order involves the supply and maintenance of B28 high-speed trainsets, with a design speed of 280 kmph, for the Mumbai-Ahmedabad high-speed rail (HSR) project. It also marks BEML’s entry into HSR, beyond conventional metro and rail coaches.
Higher investments in rail and metro infrastructure could benefit the state-owned mobility equipment manufacturer. “We are looking at an opportunity size of ₹ 35,000 crores to ₹ 40,000 crores, mainly led by the metro and the rail,” the management said in the June quarter (Q1FY27) earnings call.
Rail’s share in the total order book has risen to 65% at June-end, up from 40% in FY23. Defence is seeing good traction and contributes 25% of the order book, while the rest is from mining, which is muted.
To improve its execution pace, BEML is increasing its manufacturing capacity. Its Bengaluru HSR complex was commissioned in April, while another facility for rail/metro coaches in Raisen, Madhya Pradesh, is expected to be operational by mid-2027.
BEML increased its R&D spending by 150% year-on-year to ₹ 251 crore in FY26 to lower its reliance on imported systems. R&D spending rose from 2.6% of revenue in FY25 to 6.2% in FY26 and is likely to be 6-7% over the next five years.
BEML has guided for 20% revenue growth in FY27 and a 13% Ebitda margin. Revenue growth was 8% in FY26, while the Ebitda margin of 6.2% was hurt by one-off costs and an adverse product mix.
Q1FY27 revenue grew 29% year-on-year to ₹ 820 crore, while Ebitda stood at ₹ 2.1 crore against a ₹ 48 crore loss in Q1FY26. This was BEML’s first positive Ebitda in Q1 in the past 15 years, as its execution cycle has historically resulted in lower operating leverage, pointed out Elara Securities (India).
Amid improving financials, BEML shares have gained about 55% from their 52-week lows of ₹ 1,355 apiece hit on 30 March, and trade at 42 times FY27 earnings, as per Bloomberg .
Antique Stock Broking projects BEML’s revenue to grow at 19% CAGR over FY26-29, and earnings by 60% CAGR, albeit on a low base of FY26. The pace of execution and margin recovery would be key monitorables hereon.
