Bharat Earth Movers Initiating coverage Report By Angel Broking

Valuations: At the current market price of Rs. 1,218/share, BEML is trading at FY2017E P/E multiple of 19.0x. Historically, since Feb-2001, BEML’s stock has traded at 1-year forward P/E multiple of 27x (excluding the time when BEML made losses). On assigning P/E multiple of 22.0x to our FY2017E EPS estimate of Rs. 64/share, we arrive at price target of `1,414, estimating 19% top-line and 529% bottom-line CAGR during FY2015-17E. Alternatively, BEML’s stock at Rs. 1,218 is trading at FY2017E EV/sales of 1.3x. At the implied price target of Rs. 1,414/share, BEML would trade at FY2017E EV/sales of 1.5x, which is at ~12% discount to its long-term average. Given the 16% upside from current levels, we initiate coverage on BEML with Buy rating.

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• This topic was modified 9 years, 6 months ago by Vidhi Khanna.
• This topic was modified 9 years, 6 months ago by Vidhi Khanna.
• This topic was modified 9 years, 6 months ago by Vidhi Khanna.