Besides railways, the company has presence in construction and mining equipment, and the defence space. BEML
has resolved issues with the Ministry of Defence related to the supply of Tatra trucks for all terrain. This should lead to higher supplies, driving defence segment contribution. Further with the world’s largest defence equipment manufacturer Lockheed Martin also having tied up with BEML, opportunities, especially in aircraft maintenance, should open up. All this bodes well for the company, with defence contributions to the order book expected to improve.
The construction and mining equipment segment, too, is getting some traction. Analysts expect strong orders from Coal India to keep its growth rates improving.
Antique Stock Broking is building in a 17 per cent annual growth in revenue over FY19-21, factoring in strong revenue traction from the Metro and railway segment (50 per cent of the order book currently), along with a stable outlook for both defence and construction equipment segments.
Analysts at HDFC Securities peg revenue growth at 20 per cent annually during the period. The return ratios are also seen improving with return on capital employed to touch the 14-15-per cent mark in 2020-21, from 7.6 per cent in FY19.