BEML stock price rallied sharply on Friday as the overall market sentiment in India improved despite the persistence of geopolitical tensions around the Israel-Iran conflict.
At the time of writing, BEML stock was trading 8.2% higher at Rs 4,640 and is closing in near its 52-week high of Rs 5,488.
The company has made notable strides in both defense and rail projects and the stock seems to be riding strong on a combination of factors like robust quarterly results, a strong order book, and positive management guidance.
BEML continues to innovate with the development of advanced high-mobility vehicles tailored for strategic weapon systems, further strengthening its role as a critical supplier to India’s defense sector.
What is driving BEML stock price?
The rally in the stock price came as BEML displayed some strong fundamentals and posted its highest-ever order book of Rs 14,610 crore for FY25.
The company reported its highest-ever profit before tax (PBT) of Rs 405.43 crore and witnessed a 12% jump in its Q4 FY25 profit after tax (PAT) which was recorded at Rs 287.55 crore.
In terms of revenue, BEML reported a healthy jump of 9%, which did well in terms of boosting investor confidence.
Amid recent geopolitical events, Dalal Street is expecting the Indian government to ramp up defence spending, which explains a wave of optimism around defense and infrastructure stocks like BEML.
This broader positive sentiment has helped lift BEML and other public sector undertakings (PSUs), especially as the company stands to benefit from new government contracts and defense procurement plans.
A number of brokerages raised their target prices for BEML, even though a few have issued downgrades after the recent rally. Analysts are particularly encouraged by BEML’s expanding pipeline of large-scale projects and its ability to execute them.
Risk and considerations
The strong rally in the BEML stock price is seen with the surge in wider defence sector stock across the Indian markets. The investors may reconsider once the global headwinds pass and things go back to normal.
In Indian markets, the defence stocks are almost at their all-time highs after New Delhi’s intense exchange with Pakistan during Operation Sindoor.
The market sentiment around Indian defence stocks is largely based on sustained earnings growth and order inflows, but it can quickly shift if investors get any wind around delays in project execution or a slowdown in government spending.
Meanwhile, Indian benchmark indices rebounded from the 3-day losing streak on Friday as both Sensex and Nifty traded in green throughout the day. Ahead of the closing bell, the Sensex was 1.05% up at 82,219.18 while the Nifty 50 crossed the 25,000-level resistance.
Investors remain on the edge as the Middle East conflict continues with Donald Trump still thinking about engaging the United States against Iran, while Europe moves towards mediating a ceasefire.
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