BEML Bharat Earth Movers ltd

Earlier known as Bharat Earth Movers ltd, it has now changed its official name to its acronym – BEML. A PSU, a heavy engineering company, it is the second largest mining equipment manufacturer in Asia after Komatsu.

The company shocked everyone when it posted a new loss for the first quarter ended 30^th June 2008. There was an overall decline, in topline as well as bottomline. It posted a net loss of Rs.17.43 crore Q1FY09 as against a net profit of Rs 23.59 crore in the corresponding period a year-ago. Total income declined by 24 per cent to Rs 309.04 crore in the quarter under review from Rs 406.96 crore.

QoQ, the fall has been more precipitous. Net sales declined 72% and the company has posted a net profit of Rs.118.50 crore in Q4FY09. So overall the fall has been quite steep. The main reason has been, apart from the decline in sales, the soaring costs of raw materials, especially steel.

Right now the strength of BEML lies in the fact that it is the company with a manufacturing facility for metro coaches in India. It had secured the order for Delhi Metro transport and with other cities also planning metro rail transportation; this could be the new emerging line of revenue for BEML. Infact to cater to the growing demand from this segment, it is planning to expand its metro coaches' capacity to 190 units per annum (pa) from 150 units pa by the end of December 2008.

For BEML, the rising cost of raw materials and now the added burden of the increase in the wage bill due to the sixth pay commission recommendation would continue to remains issues. The company is expected to just about maintain its growth levels but the fourth quarter could be the main earner for the entire fiscal.
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