BEML to tap rising demand, bid for rail projects in 12 cities

BEML to tap rising demand, bid for rail projects in 12 cities
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First Published: Thu, Jul 09 2009. 10 18 PM IST
Updated: Thu, Jul 09 2009. 10 18 PM IST
Bangalore: State-owned mining equipment and coach maker BEML Ltd will bid to supply stainless steel rail coaches for 12 city railway projects, targeting a quarter of the estimated Rs1 trillion market in 10 years.
The firm will be looking at projects in 12 cities including Kochi and Hyderabad, which have prepared detailed project reports for Metro rail transport networks, chairman and managing director V.R.S. Natarajan told reporters at a meeting on Thursday.
The firm will also bid for similar orders in the United Arab Emirates in partnership with a global firm, he said, without elaborating.
BEML shares climbed around 4% to end at Rs1,036.70 on the Bombay Stock Exchange on Thursday. The benchmark Sensex closed nearly flat at 13,757.46 points.
The firm supplies coaches to Delhi Metro Rail Corp. Ltd and has won a Rs1,672 crore contract to supply 150 steel coaches to Bangalore Metro Rail Corp. Ltd, which plans to begin service by 2012.
BEML makes coaches at its Bangalore factory under licence from South Korea’s Hyundai Rotem Co. “Around 35% (of the coaches) have indigenous content. We want to increase that to around 60% in three years,” Natarajan said.
The company has designed low-cost coaches that will cost nearly half the price of those supplied to Delhi Metro. The product has to be approved by the Union government before BEML can bid for projects.
“There won’t be any frills. The coaches are for those cities that do not have the same load as in large metros,” said Rajeev Srivastava, head of BEML’s technology division.
In June, BEML signed a pact with French train maker Alstom SA to jointly bid for high-speed rail projects in cities such as Bangalore and for Indian Railways’ proposed double-decker train projects.
“The medium- to high-speed rail business opportunity is huge. Our partnership (with Alstom) will help us to have capabilities to build the trains locally,” Natarajan said.
BEML has an order backlog of Rs5,036 crore, with nearly Rs3,100 crore for Metro rail and rail coach projects for Indian Railways. BEML also has mining equipment orders worth Rs1,500 crore and around Rs500 crore for defence equipment.
The firm expects revenue to cross Rs4,000 crore and a pre-tax profit of Rs400 crore in the year to March on rising demand for rail coaches and mining products from various government programmes, Natarajan said.
BEML reported an 18% increase in profit to Rs265 crore for the year ended 31 March. Revenue rose a modest 11% to Rs3,013 crore as demand slowed for small earth-moving equipment in the construction sector.
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First Published: Thu, Jul 09 2009. 10 18 PM IST