BEML returns to profit, but tax and costs weigh on YoY earnings
The sequential margin rebound was sharp, but operating margin remained 4.83 percentage points below the Industrials peer median.
Filed 05 Nov 2026, 13:59 IST · BEML Ltd (BEML)
Key takeaways
- Consolidated operating margin recovered 6.43 percentage points QoQ as revenue grew +45.39%, faster than expenses at +36.02%.
- Net profit fell -30.59% YoY because expenses grew +45.21% against revenue growth of +42.01%, while the tax rate rose 25.60 percentage points.
- The stock fell -6.97%, a larger move than its 4.46% median reaction to the last eight results.
Price around the results
Q2FY27 marks a sharp sequential operating recovery
BEML’s consolidated operating profit recovered from the Q1FY27 loss as revenue grew +45.39% QoQ, ahead of expense growth of +36.02%. That operating leverage lifted margin by 6.43 percentage points to 6.67%, although the company remained below the 15.13% margin recorded in Q4FY26. Higher interest costs, up +7.28% QoQ, limited the conversion of operating profit into pre-tax profit.
Higher costs and tax diluted the year-on-year result
Revenue increased +42.01% YoY, but expenses grew faster at +45.21%, narrowing operating margin by 2.05 percentage points and limiting operating-profit growth to +8.55%. Interest expense also rose +50.15%, adding pressure below the operating line. The tax rate rose from 4.52% to 30.12%, which was the main reason net profit fell -30.59% despite higher operating profit.
Margin remains below the Industrials peer median
BEML’s 6.67% operating margin was 4.83 percentage points below the 11.50% median for the 178 Industrials companies that had reported the same quarter. The margin has been volatile across recent quarters, moving from -7.77% in Q1FY26 to 8.72%, 0.33%, 15.13%, 0.24% and now 6.67%. Other income contributed 13.61% of pre-tax profit, so it provided a meaningful but limited offset to operating and tax pressure.
The market reaction was weaker than BEML’s usual result-day move
The stock was down -6.97% on the reaction day, with trading volume at 3.22 times the reference level. Six of the last eight result reactions were negative, and the latest decline was larger than the 4.46% median absolute move over that history. The result-day move was therefore weaker than BEML’s typical reaction, though not outside a record that includes a 15.11% gain and declines of -7.38% and -7.61%.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,192 cr | ₹820 cr | +45.39% | +42.01% |
| Other income | ₹6 cr | ₹2 cr | +313.38% | -7.81% |
| Expenses | ₹1,112 cr | ₹818 cr | +36.02% | +45.21% |
| Operating profit | ₹79 cr | ₹2 cr | +3932.49% | +8.55% |
| Operating margin (%) | 6.67% | 0.24% | — | — |
| Interest | ₹15 cr | ₹14 cr | +7.28% | +50.15% |
| Depreciation | ₹23 cr | ₹23 cr | -0.21% | +16.64% |
| Profit before tax | ₹48 cr | ₹-34 cr | — | -5.17% |
| Tax | ₹14 cr | ₹-7 cr | — | +533.04% |
| Net profit | ₹33 cr | ₹-27 cr | — | -30.59% |
| EPS (₹) | ₹4.00 | ₹-3.24 | — | -65.31% |
Operating margin of 6.67% compares with a Industrials sector median of 11.50% across 178 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -6.97% | -9.38% |
Volume on the results session was 3.22× its 20-day average.
What to watch
- Whether consolidated operating margin holds above 6.67% after the sequential rebound.
- Whether the tax rate stays near 30.12% rather than returning to the 4.52% level seen a year earlier.