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BEL, BEML stocks volatile amid orders, war clouds

Janaki Murali

BANGALORE, May 31

THE last one month has seen sharp fluctuations in the share prices of Bharat Earth Movers Ltd (BEML) and Bharat Electronics Ltd (BEL). While market sources attribute it to rumours of divestment, company sources, however, say it is because of the war clouds on the horizon.

They say that there was no probability of these PSUs being divested now, as they are both strategic defence sector companies. BEML's defence offtake has increased to 45 per cent while that of BEL is almost 73 per cent.

Says a BEL source: The stock option was offered to employees when BEL's shares were divested to 24 per cent; there were no takers then. "Each employee was offered 200 shares, but now we regret that we didn't take it up then," says an employee. BEL shares closed on May 2 at Rs 191.40 and touched a high of Rs 224.15 on May 9. However, on May 30 it closed lower at Rs 184.15.

Major defence products from BEL are radars and defence communication equipment.

BEL's total income in 2001-02 was Rs 1975.64 crore and it made a net profit of Rs 187.79 crore. The Government still holds 75.86 per cent stake in BEL, while 24.24 per cent held by financial institutions and the public.

Meanwhile BEML's shares ruled at Rs 54.10 on May 2, and went up to a high of Rs 97.05 on May 27 and on May 30, it closed at Rs 95.10. Says a BEML source, "I bought the shares at Rs 42, and they have gone up now. However, if they are going up, it is not because of divestment rumours, but because of rumours of war, as now BEML's defence offtake has gone up considerably.''

BEML's defence offtake has grown from a mere 8 per cent to 45 per cent. BEML has also been suddenly flooded with orders for nearly 10 products for the defence sector. It has received orders for mine plows along with engineering company Pearson for the army. Then there are orders for oxidizing carriers, ammunition carriers and crash fire tenders from the army. In addition to these, Tatra vehicles in various sizes are being requisitioned for the army and the mill rails for transporting men and material.

BEML's total income for 2001-02 was Rs 1,434 crore and it made a net profit of Rs 5.2 crore. The Government still holds nearly 60 per cent in BEML while almost 40 per cent being held by financial institutions and the public.

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