BEML gains 5% as Porinju's firm picks stake; stock surges 51% in five weeks

Shares of BEML rallied 5 per cent to hit a 10-month high of Rs 923 on the National Stock Exchange (NSE) on Friday after bulk deal data showed that Porinju Veliath's Equity Intelligence India bought 265,000 shares of the company at Rs 847.63 per share on Thursday. The name of the seller could not be immediately ascertained.
 

The stock of the state-owned defence company has surged 16 per cent in the past two days. Over the period of five weeks, the stock has managed to outperform the market with a 51 per cent rally, as compared to a 7.5 per cent rise in the Nifty50 index.

On November 22, BEML had announced that it has received variation order worth of Rs 501 crore from DMRC for additional 12 trainsets of six cars each (total 72 cars) to operate on line 2B and 7 of Mumbai metro project. With this, the total contract value has increased to Rs 4,318 crore (approx) from the existing Rs 3,817 crores (approx) for supplies before August 2023, the company said.

Meanwhile, credit rating firm ICRA reaffirmed ratings of long-term fund-based and non-fund-based facilities of BEML. "The outlook on long-term rating continues to be negative due to the deterioration in BEML’s operating and financial performance during FY2020," ICRA said in a note on November 20, 2020.

BEML’s business profile continues to be extremely diverse with revenues from mining equipment (49.3 per cent of revenues during FY2020), rail and metro (36.5 per cent of revenues during FY2020) and defence (14.2 per cent of revenues during FY2020), the rating agency said, adding that given the low base and healthy order inflow, the company is expected to witness growth across segments during FY2021.

The ratings also continue to consider BEML’s strategic importance as a preferred supplier for defence procurement in the country and BEML’s established market across the segments it operates in, it said. Overall, the strong order book position in addition to its longstanding relationships with a reputed customer base comprising of PSU companies and its strong service capabilities are expected to support the company’s revenue growth over the next 2-3 years, it further added.

At 10:28 am, BEML was trading 1 per cent higher at Rs 895 on the NSE, as compared to a 0.37 per cent decline in the Nifty50 index. A combined 2.1 million equity shares have changed hands on the counter on the NSE and BSE, so far.