1:2 Split + Rs 21.20 Dividends YTD: Not IRFC Or RVNL, But This Railway PSU Stock Is Hot To Buy, Target Rs 2700

One railway PSU is likely to rally to give double-digit returns ahead. This PSU recently turned ex-split for 1:2 ratio and has a strong record of paying hefty dividends. Who is it? Let's be clear, its neither IRFC or RVNL who are the largest railway public sector undertakings in India.

BEML Ltd is engaged into diverse businesses from railways to defence and construction vehicles. On December 19, BEML shares traded on a positive note and neared Rs 1,700 mark. Analysts at Elara Capital has recommended BUY on BEML for a target price of Rs 2,700, which means the stock has potential to rise by another Rs 1,000.

BEML Share Price:

At the time of writing, BEML stock traded at Rs 1694 apiece, up by 1.6% on BSE, with market cap of Rs 14,084.17 crore. The stock is near its intraday high of Rs 1696.50 apiece. BEML stock has broadly seen downside due to stock adjustments for split ratio. YTD, the stock is down by nearly 18% on BSE.

This gives a buy-on-dips opportunity in BEML.

Why BUY BEML Stock?

According to Elara Capital, BEML's revenue is likely to enter a two -digit growth trajectory from FY27 as a large portion of its orderbook of Rs 160 billion, primarily comprising from railway & metro (R&M) and defence, would see strong execution momentum.

BEML's management retained revenue target of 20% in FY26 with margin improvement by 150bp, although we believe it is a daunting task as H1 revenue fell by 1% YoY.

Under the railway business, the R&M segment is expected to witness huge order pipeline , led by large ticket order of the Mumbai Rail Vikas Corporation (MRVC) air conditioned electric multiple unit (MRVC AC EMU) order worth Rs 350-400 billion, which is set in the next six months.

Accordingly, for this, BEML is expected to BEML expects to deliver two VB sleepers every month post the clearance by Chief Commissioner of Railway Safety (CCRS ). For LHB coaches, BEML expects ~20% revenue in FY26 and the rest in FY27. On the metro front, Chennai metro prototype is set to be rolled out in FY27, Bengaluru metro delivery of 8 -10 trains this year with the same nearing peak in FY27, and Mumbai metro execution recommencing from FY27 with peak in FY28.

In defence segment, BEML's revenue is expected to grow 70-80% YoY in FY26. Analysts pointed out that BEML target a new area of supply of maritime trains and port handling equipment with a potential revenue opportunity of Rs 40 -50 billion once fully operational in the next 4-5 years.

On the valuation, Elara's analysts said, "We lower our FY2 6E EPS by 2%, by 6% for FY27E and 5% for FY28E on account of delay in execution of the VB sleeper and Mumbai metro orders . Hence, w e lower our TP to Rs 2,700 from Rs 2,780 on 3 7x ( unchanged ) September FY2 7E P/E. However, w e retain Buy, due to strong order visibility in R&M and defence, scaling up export s opportunity in high -end mining equipment , providing scope for margin improvement and focus on new areas , such as Advanced Medium Combat Aircraft (AMCA ), maritime trains and engines."

They also expect an earnings CAGR of 31% during FY2 5-28E with an average ROE of 17% and ROCE of 16% during FY2 6-28E . Key risks would be the delay in receipt of new orders and execution of large R&M orders.

BEML Corporate Actions:

Among the latest rewards, BEML has carried one stock split and paid three dividends in 2025.

Stock Split: The last big corporate action was a stock split of 1:2 ratio with ex-date on November 3, 2025. The face value of BEML shares split to Rs 5 each from earlier Rs 10 each.

Dividends: BEML delivered a total of Rs 21.20 per share dividend for FY25. The dividends were divided by final dividend of Rs 1.20 per share in September 2025, following interim dividend of Rs 15 and Rs 5 per share in May and February this year. Overall, as per Trendlyne data, since September 2003, the company distributed at least 35 dividends.

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