BEML Limited Intrinsic Value
BEML · Capital Goods · Current price ₹1,971.3
Is BEML Limited undervalued?
We estimate the fair value of BEML Limited at ₹1,103 per share, against a market price of ₹2,023. That puts the share price about -45.5% above our estimate, at low confidence. This is our view of what the business is worth, not a target price or a forecast of where the share price will go.
How this fair value is calculated
This estimate comes from 2 methods: Discounted cash flow (2-stage) (₹598), Fair multiple (P/E) (₹1,607). These methods disagree materially, so the estimate is their midpoint rather than a weighted blend, and the disagreement is part of the finding. The full working, including the assumptions and what data was missing, is set out below.
The range around this estimate
Our estimate for BEML Limited spans ₹598 to ₹1,607. That range is wide, which is the honest signal here: read the range rather than the single number. A margin of safety means buying meaningfully below the estimate: the wider the range, the more room the assumptions leave for error.
Margin of safety
Value investors look for a margin of safety: a discount to estimated value that absorbs being wrong. At ₹2,023 against an estimated value of ₹1,103, BEML Limited trades at -45.5%, i.e. a premium to our estimate. How much margin to demand depends on how much you trust the inputs, which is what the confidence band below is for.
How we got this fair value
Every number below is part of the same estimate for BEML Limited. Nothing here is a target price or a forecast of where the share price will go.
The inputs are thin or the models disagree sharply. This is our least reliable kind of estimate, so read the range rather than the single number.
Estimate range ₹598 – ₹1,607
Why this method for this business
BEML is a capital-intensive manufacturer with strong government contracts and a growing defense sector presence. DCF captures intrinsic value, EV/EBITDA reflects capital structure, and relative PE aligns with sector peers.
The models behind the number
These methods disagree materially, so the estimate is their plain midpoint rather than a weighted blend. The disagreement is itself the finding.
Intrinsic value from 2-stage discounted cash flows (primary for asset-light / normal businesses); FCFE path
required inputs missing
- Discounted cash flow is not suitable for highly cyclical or asset-light businesses, which does not apply here. EV/EBITDA is appropriate for capital-heavy firms with stable cash flows. Relative PE is suitable for comparing with peers in the same sector.
What was missing
- Lack of detailed information on capital expenditures and working capital requirements
- Limited analyst coverage for precise forward EPS estimates
- Insufficient data on peer comparisons for EV/EBITDA
What drives it
28 inputs, grouped by how strong each claim is
- FCF_0 (normalized)
- 357 ₹cr
- Net debt
- 302.2 ₹cr
- Sector-median P/E
- 28.39×
- Peers used
- 3
- EPS (TTM)
- 21.43 ₹/share
- Own-history median P/E
- 91.67×
fcf_norm (median ≤5y positive)
total_debt − cash
peer-median
peer-median
computed
reconstructed (one feature, dampened — not a cap)
- Discount rate (r)
- 15.53%
- Beta
- 1.15
COE (building-block)
bottom-up industry
- Stage-1 start growth
- 14%
- Fade shape
- linear
- Terminal growth (g)
- 5.39%
- Stage-1 years
- 9 y
pat_cagr_5y
lifecycle Mature
macro terminal × quality premium
lifecycle Mature horizon
- Lifecycle stage
- Mature
- Quality premium
- 1.079×
- Anchor correction
- peer anchor 28.4x diverges 3.2x from 7yr own-history 91.7x (no size-comparable peer) — anchor blended 0.6 toward own-history → 66.4x
- Term: quality
- -7.8%
- Term: growth
- +1.7%
- Term: capital_allocation
- +12.3%
- Term: financial_strength
- +8.0%
- Term: history
- +11.4%
- Term: sector_rerating
- +0.0%
- Term: rate_regime
- +1.2%
- Term: risk
- +0.0%
forecast engine (L20)
moat Narrow + capital allocation
peer-anchor mismatch — deep own-history used instead
quality 39/100 (weak/erratic returns) → discount
~10% CAGR (ROCE 8% < 12% hurdle (growth not value-accretive)) → neutral
capital allocation: rising ROCE funded by strong FCF → premium
financial strength: low leverage (D/E 0.1) → mild premium
history: market paid +38% vs sector, dampened ×0.3 (one feature, not the anchor)
sector re-rating: no sector-norm history → not used
rates: risk-free 6.9% below ~7.1% normal → higher multiple
risk: no analyst-dispersion signal available → neutral (lowers confidence, not PE)
- Path
- FCFE
- Terminal-value fraction
- 0.465
- Premium vs sector
- +13.0%
- Fair-multiple confidence
- 72%
- Fair P/E
- 75×
computed (D/E vs 0.8)
PV_TV / (PV_1+PV_TV)
fundamentals + macro (not capped at own history)
data completeness + term agreement
sector median × ∏(1+term) — Dynamic Fair Multiple
Who computed this
A language model (qwen3:8b) selects the valuation method and the judgement inputs for BEML Limited: which models suit the business, the moat, the growth and margin assumptions. It does not produce the number. The fair value itself is computed in Python by a deterministic engine (version 2026.08.1) from those inputs, so the same inputs always give the same result and every figure above can be traced to a source.
Estimated 14 Sept 2026. Re-run as new financials and news arrive.
How we value stocks
We estimate what a business is worth from its own economics: cash flows, returns on capital, and a multiple justified by its quality, rather than from where the share price has been. A fair value estimate is a view, not a verdict, and it is only as good as the inputs listed above.
Read the full fair-value methodologyMore on BEML Limited
DocStoX estimates are computed from reported financials, for informational purposes only, not investment advice. Consult a SEBI-registered advisor before investing.