BEML has announced a capital expenditure plan of ₹900 crore through FY25 as it makes a comeback into the construction equipment market after nearly five years. This move aims to tap into the lucrative ₹45,000 crore market opportunity.
Previously known as Bharat Earth Movers Limited, BEML has recently undergone a major business restructuring, establishing 11 strategic business units (SBUs) and two micro business units to drive sustainable growth.
According to Shantanu Roy, Chairman and Managing Director of BEML, the company is focusing on higher-capacity products to effectively compete in the construction equipment market, particularly targeting products like 20-30 tonne excavators and dumpers, where competition from imports is less fierce.
The company’s earlier exit from the construction equipment sector was prompted by fierce competition from imported machinery. However, with this new strategy, BEML anticipates a compound annual growth rate (CAGR) of 20% and aims to enhance its EBITDA to between 17% and 20%.
Roy also mentioned the expectation that each SBU would contribute at least ₹1,000 crore, while the micro SBUs would generate around ₹500 crore each. For the current fiscal year, the construction equipment division is projected to achieve a turnover of ₹300 crore.
To support this growth, BEML has allocated ₹900 crore over the next two fiscal years for modernizing facilities, investing in new technologies, and expanding manufacturing capacity. The investment will focus on advanced technologies in the defense and infrastructure sectors, as well as innovations in artificial intelligence (AI), the Internet of Things (IoT), and automation.
Additionally, the company plans to implement Blue Sky research, which emphasizes scientific exploration driven by curiosity, aiming to enhance knowledge without the pressure of immediate commercial application. BEML’s growth strategy also includes increasing research and development spending from 2% to 5% in the near future, with an ultimate goal of reaching 7% of its topline.
In FY24, BEML reported a topline of ₹4,054 crore and a net profit of ₹283 crore. This strategic restructuring is designed to streamline decision-making, accelerate R&D efforts, and boost revenue generation, positioning BEML for substantial growth in the years ahead.
