BEML - Fundamental Analysis: Financial Health & Valuation

📈 Positive

• ROCE of 16.1% and ROE of 10.6% — indicates solid capital efficiency.
• EPS of ₹72.2 — reflects strong earnings potential.
• Low debt-to-equity ratio of 0.08 — financially conservative and stable.
• MACD positive at 37.2 and RSI at 56.5 — bullish technical indicators.
• Volume surge — current volume more than double the weekly average, indicating strong market interest.

⚠️ Limitation

• High P/E ratio of 61.0 vs industry average of 34.6 — suggests overvaluation.
• PEG ratio of 2.06 — earnings growth may not justify current price.
• Quarterly PAT loss of ₹63.9 Cr — sharp reversal from previous ₹288 Cr profit.
• Decline in DII holding by 0.26% — signals reduced domestic institutional confidence.
• Dividend yield of 0.47% — modest income for yield-focused investors.

📉 Company Negative News

• Reported quarterly loss due to higher input costs and delayed order execution.
• Stock corrected ~10% from its 52-week high of ₹4,875.

📢 Company Positive News

• Strong order book from defense and rail sectors — supports long-term revenue visibility.
• FII holding increased by 0.15% — reflects foreign investor confidence.
• Stock up 81.2% over the past year — strong momentum.

🏭 Industry

• Capital goods and defense manufacturing sector is gaining traction with government support.
• Industry P/E of 34.6 — BEML trades at a significant premium.
• Infrastructure push and Make in India initiatives benefit domestic manufacturers.

🧾 Conclusion

• Business Model: Diversified engineering company with presence in defense, rail, and mining equipment.
• Competitive Advantage: Government contracts, indigenous manufacturing, and low debt.
• Entry Zone: ₹4,000–₹4,200 — near DMA 50 and technical support.
• Long-Term Holding: Suitable for investors seeking exposure to defense and infrastructure with a 3–5 year horizon.