BEML climbs 5%, gains 23% in 3 days on upbeat FY18 guidance

NEW DELHI: Rising continuously for third straight session, shares of BEML jumped 5 per cent in Wednesday’s trade following the company's optimistic revenue growth guidance for FY18 and the government's nod for a strategic divestment in the company.

The stock rose 4.48 per cent to hit a high of Rs 1,223.05 on BSE. With this, the stock took its three-day gains to 23 per cent.

The company recently told analysts that it was expecting its rail and metro (R&M) division to double revenue in FY18 from the ongoing financial year.

The R&M segment, which supplies coaches to the Indian Railways and Metro operators, is expected to post round Rs 600 crore sales in FY17, the ET reported. The company’s order book stands at about Rs 2,000 crore, while it has participated in tenders worth Rs 3,100 crore.

The mining and construction segment is likely to have revenue of Rs 1,600 crore in FY17, and is expected to grow to Rs 2,200 crore in FY18.

“We do note that if the company is able to meet the FY18 revenue outlook shared by it, then the next fiscal's profits can be substantially higher,” said Kotak Securities, which do not have any coverage on the stock.

The brokerage noted that the company is a play on rollout of urban transit systems across the country.

Railways offer huge growth opportunities for the company in terms of replacement of existing coaches. The company is a play on greater indigenisation opportunities in the defence sector, Kotak Securities said.