Railway Stock To Buy In Diwali: Not IRFC Or RVNL, But A Midcap Stock Is Top Pick; Rs 5,400/TP By Anand Rathi

Diwali Picks 2024: This Diwali season, brokerage Anand Rathi has recommended one railway stock to buy for a target price of Rs 5,400, which hints at over 43% potential upside for a time horizon of 1-year. Who? It's neither IRFC or RVNL, the large-caps of railway sector, but a BSE-500 listed midcap BEML. Currently, BEML is below Rs 3,800 price level.

Anand Rathi On BEML:

According to the brokerage, since many months, most of the defence related stocks have been trading in a corrective mode. It added, "If we talk about BEML, then the stock has eroded around 35% of its price from the top of 5466. At this juncture, we are witnessing that the stock is turning from its 50 WEMA and 200 DEMA."

Further, the brokerage said, "In addition, there is a breakout from the falling trend line on daily chart and the stock is very much near to its previous demand zone. Investors / Traders can accumulate the stock with a time frame of around 1 year."

That being said, Anand Rathi has suggested entry level in BEML stock in the range of Rs 3,900 to Rs 3,700, for two target prices. The target 1 is at Rs 4,800 and target 2 which is the highest is at Rs 5,400. The stop loss is around Rs 2,975.

BEML Share Price:

After market hours of October 28, a day before Dhanteras trading session, BEML share price surged by 0.80% to close at Rs 3772.90 apiece on BSE. The market cap of the company is at Rs 15,712.05 crore.

The price-to-equity ratio is at Rs 54.63x, while return on equity is at 10.88%.

YTD, the stock rallied by 33% on BSE. In a year, the upside is around 87%.

About BEML:

BEML Limited, a 'Schedule 'A' Company under Ministry of Defence, Govt. Of India, plays a pivotal role and serves India's core sectors like Defence, Rail, Power, Mining and Infrastructure.

The company has a strong track record of dividend payouts. As per Trendlyne data, the company delivered up to 34 dividends since August 2001. In the past 12 months, the stock delivered up to Rs 20.50 dividend per share. Its dividend yield is currently at 0.54%.