BEML bags order for 150 rail coaches from Bangalore Metro

10 Feb 2009

BEML, a Defence public sector undertaking, has bagged an order for 150 coaches from the Bangalore Metro Rail Corporation (BMRC), worth Rs 1,672 crore, in addition to an earlier order from the Delhi Metro Rail Corporation (DMRC), valued at Rs 1,356 crore. The first set of metro coaches will be delivered to BMRC by October 2010.


BEML, whose core business involves supplies to the Defence sector and heavy project equipment to the mining and construction sectors, is betting big on the rail coaches business.


Apart from the orders for rail coaches to BMRC and DMRC, BEML would aim at supplying its indigenously developed stainless steel coaches to the Indian Railway’s EMU services in Chennai and Mumbai. The company also hopes to garner sizeable export business in metro rail coaches from the Philippines and Sri Lanka, apart from tapping the potential for supply to emerging centres in Tier-II cities of the country.


BEML’s order book now stands at about Rs 5,900 crore, which is more than twice of last year’s revenue. The company is also likely to get an additional order worth Rs 600 crore for 63 metro coaches for further expansion and extension of proposed metro lines in Bangalore city. But while these orders may take care of the revenue growth of the company in the coming year, they are unlikely to help BEML improve its operating margins.


The margins may not be significantly higher than what it enjoyed in its previous order from DMRC. Reports suggest that the current order was finalised only after BEML slashed the price of rolling stock from what it had quoted in the bid.

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