BEML Ltd Management Discussions

(i) Industry structure and developments:

The Company is Schedule-A Public Sector Enterprise under the administrative control of Department oi Defence Production, Ministry of Defence, operating in three distinct business verticals namely Mining &: Construction, Defence &: Aerospace and Rail & Metro.

Organization

BEML operates in three business segments - Mining & Construction, Defence & Aeros pace and Rail & Metro which is specific to product mix. Further to have focused approach in different areas within the business verticals, the present business verticals of BEML have been restructured into 12 Strategic Business Units (SBUs) viz Mining, Construction, Sustenance, HMV, Armoured, Commuter Rail. Metro Rail, International Business Division. Hydraulics &

Powerline, Engine Aerospace and Sustenance Rail and Metro. Further 2 micro SBLfc vi2 SEZ & Maritime are created under SBU Aerospace. This Strategic move of BEML will help to capture the market opportunities and to acquire the maximum share in that particular area which in turn will increase the overall sales revenue and profitability of the company. Ibe Companys manpower strength stood at 4761 as on 31.03.2025.

Production Units

The Company has four manufacturing complexes located at Bengaluru, Kolar Gold Fields (KGF), Mysuru and Palakkad.

Bangalore Complex: The Bangalore Complex manufactures various types of Railway products such as Van.de Bharat Sleeper Coach, High Speed Trains. LHB Coaches, Rail Coaches, AC Electrical Multiple Units (ACEMU), Diesel Electric Multiple Unit (DEMU), Main Line Electric Multiple Unit (MEMU), Stainless Steel Electrical Multiple Units (SSEMU), Overhead Equipment Inspection Car (OHE Car) etc., for Indian Railways. The Company also manufactures state-of-the-art Stainless-Steel Metro Cars supplied to Delhi, Bangalore, Jaipur, Kolkata, and Mumbai Metro Rail Corporations.

KGF Complex: KGF Complex encompasses Earth Movers Division, Hydraulics and Powerline Division, Rail Unit-11 and Heavy Fabrication Unit Earth Movers Division produces a wide range of equipment such as Bulldozers, Hydraulic Excavators. Wheel Loaders, Wheel Dozers. Pipe Layers, Tyre Handlers, Hydraulic Cranes, Walking Dragline. Electric Rope Shovels, Engineering Mine Ploughs, Trawl & Hull for Tank T-72 and Armoured Recovery Vehicles. Hydraulic & Powerline Division produces Transmissions, Axles, Hydraulic aggregates, and allied assemblies required for all the manufacturing units of BEML.

Rail Unit E manufactures Rail Coaches, Rail Grinding Machine and structural items for Railway products.

Mysore Complex: Mysore Complex encompasses Truck Division, Engine Division and Aerospace Manufacturing Division. The Tiuck Division manufactures off-highway Rear Dump Trucks, Motor Graders, and Water Sprinklers. The Engine Division manufactures a wide range of Diesel Engines powering BEMLs product range and Engines for Combat Vehicles. The Aerospace Manufacturing Division produces Ground Handling Equipment, Weapon Loaders, and Aggregates for Missiles, Aerospace Application.

PalaRkad .Complex; Palakkad Complex manufactures ground support equipment such as High Mobility Trucks of various combinations 12X12, 10X10, 8x8 & 6x6 as transport equipment. Also, the Company manufactures and supplies Mechanical & Pontoon Bridge Systems. Ejector & Air Cleaner assemblies and aggregates for Rail & Metro Products.

Marketing: BEMLs products are sold and serviced through its wide marketing network comprising 3 Zonal Offices, 12 Regional Offices, and 19 District Offices across the Country The Company also establishes temporary Activity Centers at customer locations to support and service equipment. Further. Service Training Centers at KGF Complex and Mysuru Complex are offering variety of programs, scheduled round-the-year. All the three business segments are equipped with a dedicated marketing setup which undertakes

business development, tender participation and oversees project management related activities under its ambit.

International Business Division; Company exports its products through its International Business Division. The major markets are Middle East countries, African countries and South East Asian countries. During the year 2024-25, Company has exported goods and services to Russia, Oman, Tunisia and Indonesia and expanded our global exposure to 72 countries.

Developments & Performance during 2024-25:

As per the second advanced estimates of Central Statistical Organization, the growth in real GDP during 2024-25 is estimated at 6.4 percent as compared to 7.6 percent in 2023-24.

The Company achieved important milestones during the year and some of them are mentioned here under:

Defence & Aerospace

> Development of ISOOhp Engine was Ere major milestone. 1st Engine was built and successfully fired last year. During the year the 2nd Engine was built and has been handed over to worlds renown original design house at L*K for testing and calibration ot Engine performance parameters.

> The strategic weapon carrier 12X12 vehicle has been imported. BEML has now indigenously developed and supplied HMV 12X12 equipment to DRDO. The equipment is fielded for trials.

> To foray into new areas, BEML has entered

MoU with

- Indian Navy for indigenisation of Arresting Gear, Restraining Gear and SAC Lifts.

- M/s STX Engine, South Korea for manulacturing of Engines with 750 Hp and 6 MW for Marine applications

- M/s BEL and M/s MIDHAM for Indigenous development of Advanced Fueling and Control systems for Engines for Heavy duly Applications

- M/s Dragflow, Italy for manufacturing of Amphibious Cutter Suction Dredgers

- M/s NHPC for Dredging and desilting solutions,

- M/s GSL to collaborate on maritime projects and composites, reinforcing Lidias maritime capabilities

- M/s MDL signed MoL for advance research and development in cutting-edge technologies for marine applications

> As part of increasing the capacity the

following facilities are being installed for

Defence and Aerospace Sector.

• A new hanger for Armed Recovery Vehicles, at KGF.

- A new hanger for High Mobility Vehicles, at Palakkad.

Mining & Construction

> Handed over Lidias first indigenously

designed and developed 21 cu.m electrical

Rope shovel Model: BRS21 from BEML, Kolar Gold Fields Complex to the customer. This has been done in record time of 3 years from receipt of order.

> Design and development of 550hp motor grader BG1205

> Design and development of 50KL water sprinkler BWS50

> Development of 8 Ton Tyre Handler BL4.0TH

> Implementation of semi-autonomous features in mining equipment to improve productivity and reduce operator fatigue

Rail & Metro

> Supply of Indias maiden Vande Bharat sleeper trainset prototype from BEMLs Bangalore complex.

> Received an order for Design and development ot 2 trainsets of High Speed Trainsets from M/s ICF. Chennai with 280 Kmph design speed and 249 Kmph operational speed.

> Received order of 210 cars from Chennai Metro worth t 3004 crores.

> Received variation order of 42 cars from Bangalore Metro worth ? 407 crores.

> MoU signed with

• M/s BEL for development of Train Control Management System (TCMS).

• M>‘s Siemens for Electrical systems for Metro Cars and Rolling system Applications.

General

> Additional SBL* lor Rail & Metro Sustenance was formed to cater the growing demand of Indian Railway and Metro rail corporation.

> BEML Iras been awarded Golden Peacock Award for HR Excellence.

> National Award for Outstanding Export Performance (FY 2021-22).

> Platinum Quality Award (PSU Category).

> BEML received WCDM Disaster Risk Reduction Award 2025.

> BEML has qualified for the Councils prestigious "National Award for outstanding export performance during tire financial year 2021-2022 after due diligence by EEPC.

> Award won for Star Performers in Product

Group 31: Railway, Aircrafts, Ships, Boats and Related Products &: Equipment: Large

Enterprise, 54* EEPC Export award.

> BEML lias been qualified for the 4th Edition of EEPC India Quality Awards: Platinum Award recipient under the PSL^ category, after due diligence by EEPC.

> CMD, BEML conferred with Samarpan PSU Award for exemplary leadership and steadfast commitment for steering BEML towards greater heights of self-reliance, innovation and global.

(ii) Strengths and Weakness:

(a) Strengths

> Trusted partner of Indian Defence Forces for providing support to aging fleets.

> The capability to cater a large spectrum ol all three business verticals which includes R&D, Production and Maintenance and repair contracts.

> Established R&D base with dedicated test facilities. Over 87% of Sales is thru R&D developed products.

> Extensive expertise in the design and development of high-performance engines tailored for main battle tanks.

> Capability to design k manufacture of high- end Mining equipment.

> Expertise in Heavy Fabrication and Machining manufacturing Stainless Steel Coaches, Metro Cars, EMLs, etc.

> Development of large scale Defence infrastructure with the support of Government of India and trained manpower with expertise in Defence & Aerospace industry.

> More titan 73% of Sales is achieved on Competition mode.

> Extensive Sales and Service infrastructure - Established Zonal, Regional, District Office & Activity centers across India.

> Major Market Share in High-Capacity Dozers and Metro Cars in India.

> 5trong relationship with Services, Defence Labs and Government agencies and PSUs.

> Green Company - Use of Renewable energy sources.

> Good Brand value, Large Customer base and Work Ethics Culture.

(b) Weakness

> Depletion of Skilled Manpower & Ageing Workforce.

> No assured business from Gol unlike some of the other DPSUs.

> Uncertainty in orders for Rolling stock from Indian Railways.

> Low Market Share in Construction Equipment.

(iii) Opportunities and Threats:

(a) Opportunities

Defence & Aerospace:

> To advance and strengthen the abilities of armed forces, the modernization budget has been increased.

> Make in India policy ol Government of India and promulgation of five positive list would benefit Indian defence industry boosting Indigenous production.

> Growing opportunities in Maintenance, Repair, Overhaul and Lpgrade programs.

> Emphasis on establishment of Aero and Space clusters in India especially in case of unmanned aerial vehicles.

> Also, to reduce import dependence and modernise Defence Forces with our homegrown technology, the Government has gradually increased the domestic industrys capital procurement budget.

> Opportunity in indigenization of Maritime and Naval systems/ aggregates as a part of "Amrit kaal".

> Thrust on Exports thru LoC for Defence Products.

Mining & Construction:

> Increased thrust by Government in sustainable mining with high capacity mining equipment.

> Thrust on indigenization of High-Capacity Mining equipment viz 850hp dozers, 550hp motor grader.

> Significant increase in coal production by private mining companies in india.

> Projected CAGR growth of 6.7% Construction equipment industry and PM Gati Shakti and National Logistics Policy.

> Use ol Artificial Intelligence features on Mining equipment.

> Emission compliant CEV stage engines for construction equipment.

Rail & Metro:

> Retrofit 40,000+ existing coaches with lightweight materials, intelligent HVAC, passenger information systems, and highspeed readiness - LHB & Vanae Bliarat Sleeper Coaches.

> Urban Metro Expansion: Supply stainless steel metro cars for 10(b- planned metro networks across India including Tier-U dties under the Smart Cities Mission.

> High-Speed & Semi-High-Speed Trains: Design and manufacture of Vande Bharat variants (sleeper, cargo, suburban), Medium- Speed EMIs, and Light Rail Vehicles tor emerging Tier-II/IlI cities.

> Extension of existing Metro networks in Tier- 1, Tier-H dties and new metro projects are planned. Light Rail Metro are also catching up as a revenue line which is expected to emerge from Tier-II &: Tier-Ill dties.

> Mobility: Rolling stock for e-freight corridors. Regional Rapid Transit System (RRTS) / Light Rail, High Speed Trains, Aluminum Trains, Hyperloop (HardT, TUTR).

New Areas:

> New Opportunities in Marine and Naval sector.

> Upcoming prospects in Aerospace Business and ISRO.

> Unmanned ground vehides.

> Unmanned Aerial Vehicles (UAVs).

> Manufacture of Fixed wing aircraft and Helicopter Aggregates.

> Demand for high end Electric Drive Dump Trucks, Excavators and Bull-Dozers.

> Ground Combat platforms.

> AI and Robotics enabled systems.

> High Speed Trains and Medium speed EMUs.

> Emerging business opportunity for Light Rail.

> New opportunities in Maintenance equipment viz. Rail Grinding machines, Track Cleaning Machine, etc.

(b) Threats

> Increased competition from Indian private and Global companies.

> Technology leaders operating directly than parting technology to Indian counterparts.

> Mergers & Acquisitions in Mining and Construction equipment industry.

> Difficulty in sou rang of few critical and denied technologies.

> Rapid changes in teclinologies.

> Increased FDI caps in Coal & Defence sector.

> Policy interventions favouring Private sector.

(iv) Outlook:

Mining & Construction:

Given the Government of Indias emphasis on reducing the import dependency for mining equipment and ramping up annual coal production, theres a concerted effort to enhance output. Further, amidst the current geopolitical landscape, CIS countries are seeking collaborations with Indian companies to fulfill their requirements.

With the outlined coal production and infrastructure development strategies, coupled with efforts to boost exports, the demand for

Mining k Construction equipment is projected to remain strong in the coming years. The company has devised comprehensive strategies within its product portfolio to seize opportunities in this promising market.

Defence & Aerospace:

The governments proactive measures to bolster indigenous design, development, and manufacturing of defence equipment, aimed at fostering a sustainable defence industrial ecosystem, will undoubtedly create numerous opportunities for the domestic sector. The call for Atmanirbhar Bharat and positive indigenisation list has further catalyzed efforts toward achieving self-reliance.

The increased defence modernization plans, including the procurement of Armoured vehicles by the Ministry of Defence, are in the pipeline. Additionally, exploring new business domains such as overhauling Recovery/Hi gh Mobility Vehicles, De-mining equipment, and Vehicles for gun systems will contribute significantly to revenue growth.

BEML achieved a significant milestone by completing the groundbreaking project of designing and developing Indias indigenous prototype 1500 HP engine. This remarkable feat marks a pivotal moment in Indias defence capabilities, highlighting the nations engineering excellence and dedication to self-reliance in defense technologies. BEML aims to continue developing engine variants to meet various requirements of the Defence Services, demonstrating its commitment to realizing the vision of Aatmanirbhar Bharat and establishing itself as a leader in defence production.

In Aerospace sector, orders for aircraft, helicopter components, and aggregates for space programs are anticipated to pick up pace in the near future. The requisite facilities are already established, poised to capitalize on these opportunities. furthermore, BEML is actively pursuing business opportunities aligned with its product portfolio and overhauling services. Diversification in Naval k Marine sector, through indigenization of dredging spares and providing dredging solutions. Collaboration with other Defense Public Sector Undertakings (DPSL^s) and Private Sectors for the supply of High Mobility Vehicles, aggregates for various Missile Programs, and Aerospace components is part of the companys strategic initiatives.

Rail & Metro:

Production and supply of proto train for Vande Bharat sleeper Train has enhanced the capability for meeting the upcoming requirement of Vande Bharat sleeper Trains. BEML is actively meeting the upcoming demands of LHB coaches and other Rail maintenance equipment.

Additionally, as Metro Rail expands into Tier-II cities across the country, BEML is hopeful of securing orders for upcoming Metro Car projects.

Purthermore, the rising demand for suburban trains, such as Electric Multiple L^nits, and the forthcoming tenders in this regard are expected to positively impact the companys revenue.

Design and manufacturing of Indias maiden High speed train will set tone for future of Indian Rail business.

Furthermore, addressing port congestion is a priority for the Government of India, prompting BEML to take proactive measures.

Exports:

On the export front, the Company has secured export orders from Middle east Countires and equipment were supplied. Additionally, supplies of orders received from M/s. BEL &t M/s. BDL tor the supply of High Mobility Vehicles is progressing.

The Company is actively pursuing various business opportunities in the Defence, Mining & Construction, and Rail & Metro segments across SAARC, AFRICA, ASEAN, LATAM and MENA regions.

With this strategic approach, BEML aims to explore opportunities for exporting High Mobility Vehicles and Aircraft towing tractors in the Defence sector, as well as Rail coaches, Metro Cars, and Maintenance vehicles in the Rail & Metro business. This initiative also extends to the export of Mining & Construction equipment.

(v) Challenges, Risks and Concerns:

Lite major challenges to tire Company are:

> Supply Chain Disruptions

> Dumping price strategy adopted by global player for Mining & Metro projects

> Continuity in receipt of orders from Indian Army and Indian Railways

> Indigenisation of parts / components due to MOQ, Quality and Cost

(vi) Internal control systems and their adequacy:

The Company has an internal control system designed to provide high degree ol assurance regarding optimization and safeguarding of resources, quality and reliability of financial and operational information, compliance with applicable statutes and corporate policies. It is the Companys endeavour to align all its processes and controls with global best practices.

The internal audit process is designed to review the adequacy of internal control checks in the system and covers all significant areas of the Companys operations. The internal audit department performs risk-based audits, based on an internal audit plan which is reviewed every year in consultation with statutory auditors and the Audit Committee. The Audit Committee reviews audit reports submitted by internal auditors and follow up on the implementation of corrective actions periodically.

The Statutory Auditors submit a report on internal financial controls over financial reporting along with their Audit Report on the financial statement every year. BEML being a Government Company,

it is subject to audit by Comptroller and Audit General of India also.

A comprehensive Delegation of power exists for smooth decision making which is being periodically reviewed to align with changing business environment and for speedier decision making. The Company has implemented an enterprise-wide ERP. The Company has end to end SAP platform to provide a robust foundation to address several emerging business needs.

(vii) Discussion on financial performance with respect to operational performance:

(Rs. Crores)

Particulars	2024-25	2023-24
a. Revenue from Operations (Ind. of other operating income)	4022	4054
b. Revenue from Operations find of sale of products and services)	3S39	3965
c. Value of Production	3905	4056
d. Profit before Depreciation, Interest and Tax	531	485
e. Finance costs	54	39
t Depreciation and amortization expense	71	64
g. Profit Before Tax	405	383
h. Tax Expense	111	100
i. Profit after Tax	294	283
j. Other Comprehensive Income	2	6
k. Total Comprehensive Income	296	289
L Networth	2854	2643
m. Inventory	2379	2256
n. Trade Receivables ( Net)	1696	1439
Total Inventory in No. of davs of VoP	222	203
Trade Receivables/ Revenue from Sale of Products and services (mduding GST)	133	111
Profit before Tax to Revenue from operations (%)	10.07%	9.42%
Profit after Tax to Networth (%)	10.30%	10.71%

Your Company achieved Revenue front Operations of * 1022 crores as against *4054 crores in the previous year, down by 0.79%. Value of Production is *3905 crores as against *4056 crores in the previous year, down by 3.72%. With increased business and continued focus on cost control, your Company registered a Profit before Tax of ?405 crores as against Profit before Tax of *3S3 crores in the previous financial year, up by 5.74%.

There was no change in the nature of business of the Company during the year. Further, there was no material change/ commitment occurred affecting the financial position of the Company subsequent to the financial year ended 31.03.2025 till the date of this report.

(viii) Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefore, including:

Key Financial ratio	2024-25	2025-24	%age Change	Explanation
(i) Debtors Turnover	2.95 times	3.50 times	-16.00
(ii) Inventory Turnover	1.66 times	1.84 times	-10.00	—
(in) Interest Coverage Ratio	8.46 times	10.80 times	-22.00	-
(iv) Current Ratio	2.66 times	2.47 times	S.00	—
(v) Debt Equity Ratio	0.08 times	0.02 times	300.00	Increase in borrowings
(vi) Operating Profit Margin (%)	11.00%	9.00%	22.00
Net Profit Ratio (%)	8.00%	7.12%	14.00	Increase in profit

(ix) Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof:

Key Financial ratio	2024-25	2025-24	%agc Change	Explanation
Return on net worth	10.33%	10.94%	-9.00%

(x) Material developments in Human Resources, industrial Relations front, including number of people employed:

Relevant information in this regard is disclosed in the Boards Report.

(xi) Environ mental Protection and Conservation, Technological conservation, Renewable energy developments. Foreign Exchange conservation:

Relevant information in this regard is disclosed in tire Boards Report.

(xii) Corporate Social Responsibility and Sustainability (CSR):

Relevant information in this regard is disclosed in Annexure-Vl to the Boards Report.

Cautionary Statement - Certain statements made in the Management Discussion and Analysis Report related to the Companys objectives, projections, outlook, expectations, estimates and others may constitute forward looking statements within the meaning of applicable laws and regulations. Actual results may differ from suck expectations, protections and so on whether expressed or implied. Several factors could make significant difference to the Companys operations. These include climatic conditions and economic conditions affecting demand and supply, government regulations and taxation, natural calamities and so on over which the Company does not have any direct control.

	For and on behalf of the Board of Directors
	Sd/-
Place: Bengaluru	Shantanu Roy
Date: 06.06.2025	Chairman & Managing Director