BEML targets Rs 900 crore capex till FY'25, re-enters construction equipment space

BEML has allocated Rs 900 crore in capex over the next two fiscal years to modernize its facilities, invest in new technologies, and expand its manufacturing capacity
BEML targets Rs 900 crore capex till FY'25, re-enters construction equipment space
BEML targets Rs 900 crore capex till FY'25, re-enters construction equipment space
Published on

New Delhi: Bharat Earth Movers Limited (BEML) has outlined a capital expenditure of Rs 900 crore till FY'25 and re-entered the construction equipment market after a hiatus of nearly five years, aiming to capitalise on the Rs 45,000 crore market opportunity.

The company, formerly BEML, recently underwent a significant business restructuring, establishing 11 strategic business units (SBUs) and two micro business units to drive sustainable long-term growth.

PSU Watch is now on Whatsapp Channels. Click here to join

“As part of this restructuring, we have re-entered the construction equipment business, focusing on higher capacity products to tap into the massive Rs 45,000 crore market,” Shantanu Roy, Chairman and Managing Director of BEML, told reporters on the sidelines of the 17th Global Mining Summit organised by the CII.

BEML's earlier exit from the construction equipment space was due to intense competition from imported products.

Roy, however, explained that the company is now targeting higher-capacity equipment, such as 20-30 tonne excavators and dumpers, where competition from imported products is less intense, unlike the sub-10-tonne segment.

The restructuring is expected to generate a compound annual growth rate (CAGR) of 20 percent and improve the company’s EBITDA to 17-20 percent.

“We expect each SBU to contribute at least Rs 1,000 crore, and micro SBUs to generate Rs 500 crore each,” Roy added.

In the current fiscal year, the construction equipment division is projected to achieve a turnover of Rs 300 crore.

BEML has allocated Rs 900 crore in capex over the next two fiscal years to modernize its facilities, invest in new technologies, and expand its manufacturing capacity. This investment will focus on futuristic technologies in defence and infrastructure sectors, as well as advancements in artificial intelligence (AI), Internet of Things (IoT), and automation.

The company is also set to roll out Blue Sky research, a type of scientific exploration driven by curiosity and aimed at advancing scientific knowledge without immediate commercial application.

BEML targets Rs 900 crore capex till FY'25, re-enters construction equipment space
BEML, PFC ink pact to finance, execute infrastructure projects in defence, rail transportation

BEML’s growth plan also includes increasing its R&D spend from the current 2 percent to 5 percent in the near future, with a goal of reaching 7 percent of its topline.

The company reported a topline of Rs 4,054 crore in FY’24, and a net profit of Rs 283 crore.

This strategic restructuring aims to streamline decision-making, accelerate R&D, and bolster revenue generation, positioning BEML for significant growth in the coming years.

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Google News. Click here to follow. Also, join PSU Watch Channel in your Telegram. You may also follow us on Twitter here and stay updated.)

logo
PSU Watch
psuwatch.com