BEML shares zooms 30% in 10 days post Mumbai Metro deal, Bullet Train rakes Indigenisation talks

BEML Ltd has pitched for indigenisation of at least six rakes of bullet train coaches in collaboration with its Japanese partner Hitachi. BEML also bagged a contract worth Rs.3,015 crore for the Mumbai Metro Rail corridor last month.

BANGALORE: BEML was up 7% at Rs.911/-, surging 30% in the past 10 trading days at BSE.

BEML Ltd, the country’s largest railway coach maker, has pitched for indigenisation of at least six rakes of bullet train coaches in collaboration with its Japanese partner Hitachi. Japanese companies Hitachi and Kawasaki will bid to be the main contractor in the Japan government-assisted Ahmedabad-Mumbai bullet train project.

“We have submitted our request for indigenisation of six bullet rakes (60 coaches),” BEML Chairman and Managing Director D K Hota told PTI.

However, in joint negotiation meetings, Hitachi had indicated that if the project has to meet its rollout deadline of 2023, then indigenisation of not more than one bullet train rake could be possible.

“We want more volume in the indigenisation process, which will be a win-win for the country and make our investments viable in the bullet train project,” Hota said.

The USD 15-billion project envisages 24 rakes comprising 240 coaches, which would run between Mumbai and Ahmedabad.

BEML is keen on undertaking the entire interior work that is termed as ‘level three indigenisation’. The broad contours can only be finalised after the bidding and selection of the main contractor and the subcontractor for the bullet train project, an official said.

A team of BEML officials had recently visited the Hitachi facility in Japan to evaluate ground realities.

Indigenisation of coaches is part of the central government’s ‘Make in India’ mission. The railway coaches business is a key and growing segment for Bharat Earth Movers Ltd (BEML), which can produce 800 rail coaches and 300 metro coaches per annum.

Meanwhile, it has also bagged a contract worth Rs 3,015 crore for the Mumbai Metro corridor. The public sector company will manufacture 378 metro cars for the Mumbai Metro Corridors 2A, 2B and 7.  The company on November 23, announced that it has bagged contract worth of Rs 30.15 billion from the Mumbai Metropolitan Region Development Authority (MMRDA) to supply rolling stock on Metro corridors 2A, 2B and 7. According to BEML, there is scope for another 120-odd metro cars in the same project in the second lot, taking the total to 500.

Hota had recently said the company was aiming at a 30-per cent rise in the bottom line in the 2018-19 fiscal.

BEML was up 7% at Rs.911/-, surging 30% in the past 10 trading days at BSE.

Shares of companies related to the railway sector were also trading higher by up to 7% on the back of the order flow. Texmaco Rail and Engineering, Titagarh Wagons and Commercial Engineers & Body Builders Company (CEBBCO) were up 2% to 7% on BSE. In comparison, the S&P BSE Sensex was down 0.49% at 36,306 points at 11:32 am.

CEBBCO is locked in upper circuit for the fourth straight trading days, up 5% at Rs 25.90, also its 52-week high on BSE. The stock soared 38% in the past eight days from Rs 18.75, as compared to a 4% rise in S&P BSE Sensex.

Last week, the company bagged a development contract worth of Rs 1,523 million for manufacture and supply of wagons to Railway Stores (S), Ministry of Railways, Government of India. These wagons are BOXNHL type, designed to carry coal, steel, stones etc.

Titagarh Wagons was too up 5% at Rs 85, gaining 28% in the past eight trading days on bagging an over Rs 1,500 million from Indian Railways.

“The company has been awarded a contract for manufacture and supply of 5,058 wagons to Indian Railways, the bidding for which was conducted under the reverse auction method. These wagons are BOXN HL type, designed to carry coal, steel, stones etc. and the value of the order is Rs 1,561 million,” Titagarh Wagons said in a regulatory filing on December 10.

As per the contract, one-third quantity (1686 Wagons) is to be supplied within six months and to complete the supply of the full quantity of wagons before 28.02.2020, it added.
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