BEML The Indian government has taken important steps to encourage the development and production of defense equipment within the country. This aims to create a sustainable defense industry and reduce reliance on imports. 

The “Atmanirbhar Bharat” initiative, promoting self-reliance, has given a strong push towards achieving this goal. These government policies have opened up opportunities for Indian companies to play a significant role in designing, developing, and manufacturing defense equipment. 

One such company that has benefited and continues to do so is BEML. BEML is the second-largest manufacturer of earth-moving equipment in Asia. The company’s stock has given a stellar return of 284.46%. Let’s dive deep into the business of BEML, exploring its segments, order book, and future segments.

Bharat Earth Movers Limited

Business Overview

BEML Limited, formerly known as BEML is a prominent public sector undertaking (PSU) in India that specializes in manufacturing a diverse range of heavy equipment for various sectors, including mining, construction, defense, rail, and metro transportation.

Established in 1964, BEML has grown to become a leading player in the capital goods industry, contributing significantly to the country’s infrastructure development. The company’s primary focus lies in the design, development, and production of high-quality earthmoving equipment, bulldozers, dump trucks, excavators, and other heavy machinery. 

In addition to its contributions to the civil and mining sectors, BEML has established a strong presence in defense manufacturing, providing a wide array of land-based defense equipment, including armored vehicles, artillery systems, and recovery vehicles.

The company operates under three distinct business verticals namely Mining & Construction, Defence & Aerospace, and Rail & Metro. 
Let’s have a detailed overview of all the business verticals of the company.

business Segments of BEML

Mining & Construction

BEML Mining & Construction segment takes center stage as the primary revenue generator for the company. Focused on producing heavy equipment for mining and construction activities, this segment is key in supporting India’s infrastructure development. 

It’s important to recognize that while BEML engages in diverse sectors the bulk of its revenue is driven by the Mining & Construction segment, showcasing its significance in the company’s overall operations.

Orders and recent developments of BEML

The Mining & Construction (M&C) Business Group at BEML has demonstrated exceptional performance, contributing about 50% to the company’s turnover and achieving its highest-ever sales. As the country aims to increase annual mining output to 1 billion tonnes by 2024 from the current 893 million tonnes, there is a growing demand for ‘Made in India’ Heavy Mining equipment.

Highlighting BEML’s global reach, the company has secured orders from Russia and Indonesia for Mining & Construction equipment. The execution of these orders has already commenced and is expected to be completed during the current year.

Rail & Metro

The Rail & Metro segment of BEML is pivotal in providing solutions for railway and metro transportation, including the design and manufacturing of rail coaches and metro cars.
BEML has a strong presence in meeting urban transportation demands, with ongoing projects for supplying metro cars in various Indian cities. The company is also looking to expand its footprint globally, as seen in its collaboration for supplying metro cars to Bahrain.

Orders and recent developments of BEML

A robust pipeline of Rs. 10,000 crore worth of orders expected to be awarded during the current and next year signifies sustained growth. Additionally, BEML has secured an order for supplying 10 rakes of Vande Bharat Sleeper trains, with deliveries set to commence in the financial year 2023-24 International expansion is on the horizon, as BEML has entered into an agreement with an SPV led by Delhi Metro Rail Corporation for the supply of Metro Cars to Bahrain Metro. 

Defense and Aerospace

BEML’s Defence & Aerospace segment is another component of the company’s portfolio. It contributes significantly to India’s defense capabilities and explores aerospace opportunities.  This particular sector involves the creation of heavy equipment for mining and construction activities.

Orders and recent developments of BEML

With increased defense modernization plans for 2023-24, BEML is eyeing procurement opportunities, particularly for High Mobility Vehicles With a strategic focus on indigenous high-end mining equipment, the company aims to meet the increasing demand as the Indian government targets an annual output of 1 billion tonnes by 2024. 

The construction equipment market outlook is positive, and BEML has devised strategies to consolidate its market share and supply a diverse portfolio of equipment The Aerospace segment is thriving, with partnerships with ISRO and orders for aerospace components from other DPSUs, contributing to overall growth.

Future Outlook of BEML

BEML has a lot of future plans going ahead. Let’s have a look at some of them.

Overall Performance

Bharat Earth Movers Limited has maintained a significant market share in key segments like Dump Trucks, Dozers, and Metro cars. The company has already booked more than Rs. 5000 crore worth of orders in the FY23, with a robust pipeline of over Rs. 10,000 crore across all three business verticals, demonstrating a strong demand for its products.

Growth Targets

BEML has set an aspirational target for the current year, aiming to achieve a growth rate of over 25% compared to the previous year’s accomplishments. This reflects the company’s commitment to continuous expansion and improvement.

Defence Business

BEML is optimistic about enhancing the share of its Defence Business, expecting it to reach around 30% of the total company’s revenue during the current year. Collaborations with other DPSUs and the private sector for the supply of High Mobility Vehicles, Missile Programmes, and Aerospace components showcase the company’s commitment to strengthening its position in the defense sector.

Mining & Construction

BEML has received orders from Russia and Indonesia for Mining & Construction equipment, with additional orders worth Rs. 300 crore expected. The company already has a very big establishment in terms of exports. 

Growth Opportunities

The extension of existing Metro networks in Tier-I & Tier-II cities, along with new metro projects in the pipeline, presents growth opportunities for BEML in the Rail & Metro business.

Aerospace Opportunities

New opportunities in the Aerospace Business, particularly with ISRO, highlight BEML’s involvement in cutting-edge projects and its contribution to India’s space exploration efforts.

International Presence

BEML actively expanding its international footprint, having received orders from the Philippines for Motor Graders and Prime movers for export. The company has registered with Defence Portals of foreign countries, indicating a strategic approach to explore and tap into global markets for Defense, Rail, Metro, and Mining & Construction equipment.

Conclusion

In conclusion, BEML stands as a formidable player in India’s defense, infrastructure, and manufacturing landscape, benefitting significantly from the government’s initiatives towards self-reliance in defense production under the Atmanirbhar Bharat campaign. 

With an impressive order book, substantial international collaborations, and a strategic focus on emerging opportunities, BEML is well-poised for sustained growth. The recent surge in its stock prices, marking a remarkable 284% return has resulted in a lot of attention in the markets. 

Looking ahead, BEML has plans to keep growing, especially in areas like metro projects, defense, and aerospace. With a positive outlook, collaborations with other countries, and a rising stock price, will they continue to have stellar growth? What are your thoughts on this article? Did you find it insightful and informative? Let us know in the comments section below!

Written by Akshita Maloo

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