BEML stock surges 7% after DAC approves ₹1.45 lakh crore acquisitions

Defense stock BEML jumped by around 7 per cent on September 4, following the Defence Acquisition Council's (DAC) approval of significant procurements worth ₹1.4 lakh crore for the Armed Forces.

The stock surged on strong trading activity, with 17 lakh shares of the defense PSU being traded on BSE and NSE combined, compared to its one-month average trading volume of 5 lakh shares.

BEML is a public sector undertaking (PSU) that produces a wide range of heavy equipment used in earth moving, railways, transportation, and mining. The company manufactures variants of the BEML Tatra vehicle for all-terrain operations and supplies engineering mine ploughs, tank transportation trailers, weapon loading equipment, armored recovery vehicles, as well as Milrail coaches and wagons.

What's behind the rally?

The company contributes to the country's Integrated Guided Missile Development Project by providing ground support vehicles. Additionally, it has established a test track at its KGF Complex for testing defense equipment and vehicles.

Recently, BEML inaugurated the prototype manufacturing of driverless metro trainsets under the 5RS-DM Project, which is dedicated to supporting the Bangalore Metro Rail Corporation's (BMRCL) Lines 2 and 6 projects, including the ambitious Bangalore Airport Line.

In August 2023, the PSU secured an order for 53 trainsets, valued at approximately ₹3,177 crores. This project includes the design, manufacture, supply, installation, testing, and commissioning of the trainsets, along with comprehensive maintenance services for up to 15 years, under the Bangalore Metro Rail Project Phase 2, 2A, and 2B.

Earlier this week, Ashwini Vaishnaw, the Minister for Railways, inaugurated India’s first Vande Bharat Sleeper trainset at BEML's rail complex in Bangalore. The trainset was designed and manufactured by BEML.

“This is a historic moment for the country. The much-awaited Vande Bharat Sleeper trainset is now set to run on Indian Railways tracks, providing our people with a world-class travel experience and best-in-class amenities. The dedication and expertise of BEML's leadership and engineers have made this remarkable achievement possible,” said Vaishnaw.

BEML shares were trading 5.4 percent higher at ₹4,072.25 on the National Stock Exchange (NSE). The stock has gained about 43 percent so far this year, significantly outperforming Nifty's 15 percent return. Over the past 12 months, the stock has surged 62 per cent, while Nifty has risen 28 percent during the same period.