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Action Construction Equipment Ltd - Company Analysis


Action Construction Equipment Ltd (ACE) is one of the leading manufacturers of material handling and construction equipment in India. The company offers a wide range of products, such as cranes, backhoe loaders, forklifts, tractors, harvesters, and road construction equipment. ACE has a strong presence in both domestic and international markets, with exports to over 25 countries.


In this blog post, we will review the performance of ACE's shares in the past year and analyze its future prospects. We will also compare ACE with its peers in the industry and evaluate its strengths and weaknesses.

Action Construction Equipment Ltd (ACE) is India's leading material handling and construction equipment manufacturing company with a majority market share in Mobile Cranes and Tower Cranes segment. The company was founded in 1995 and has its headquarters in Palwal, Haryana. ACE offers a wide range of products, including Mobile Cranes, Tower Cranes, Backhoe Loaders, Forklifts, Construction Equipment, Agriculture Equipment, and Warehousing Equipment. The company has a strong presence across India with over 100 locations and 3300 employees. ACE also exports its products to more than 25 countries worldwide.


ACE has been recognized for its innovation and excellence in the industry with several awards and accolades. Some of the recent awards include:


- Equipment India Person of the Year 2022 Award for Mr. Sorab Agarwal, Executive Director, ACE

- Bestseller in Mobile Cranes Award at the 10th Equipment India Awards 2022

- Innovative Construction Equipment 2022 Award for its multi-activity Piling Crane Model FP210 at the CE & CR Awards 2022

- Innovation of the Year 2021 Award for its multi-activity Piling Crane Model FP210 at the 9th Equipment India Awards 2021


ACE's vision is to be a global leader in material handling and construction equipment by providing superior quality products and services to its customers. The company's mission is to enhance customer satisfaction by delivering value-added solutions and creating long-term relationships. The company's core values are integrity, customer focus, teamwork, innovation, and excellence.


ACE's share price has increased by 52% in the past year, from Rs. 90.65 on May 22, 2022 to Rs. 137.80 on May 22, 2023. This is higher than the average growth of 35% for the BSE Capital Goods Index, which represents the sector. The company has benefited from the recovery in demand for construction equipment after the Covid-19 pandemic, as well as its diversified product portfolio and strong customer base.


ACE's revenue grew by 25% in FY 2021-22, from Rs. 1,213 crore to Rs. 1,516 crore. Its net profit increased by 42%, from Rs. 87 crore to Rs. 124 crore. Its operating margin improved from 11% to 13%, indicating better operational efficiency and cost control. The company also reduced its debt by 18%, from Rs. 293 crore to Rs. 240 crore, resulting in lower interest expenses and higher cash flow.


ACE's future outlook is positive, as the company expects to benefit from the government's infrastructure spending and rural development initiatives. The company has also invested in expanding its manufacturing capacity and product innovation, as well as strengthening its distribution network and after-sales service. ACE aims to increase its market share in both domestic and international markets and enhance its brand value.


ACE faces competition from other players in the industry, such as Escorts Ltd, Mahindra & Mahindra Ltd, JCB India Ltd, and Caterpillar India Pvt Ltd. These companies have similar or higher market capitalization, revenue, and profitability than ACE. They also have strong brand recognition and customer loyalty in their respective segments.


ACE's strengths include its diversified product portfolio, which caters to various segments and applications of construction equipment; its wide geographical presence, which reduces its dependence on any single market; its focus on quality and innovation, which enables it to offer customized solutions to its customers; and its robust financial performance, which reflects its operational excellence and growth potential.


ACE's weaknesses include its lower market share than some of its peers in certain segments, such as backhoe loaders and road construction equipment; its exposure to cyclical fluctuations in demand for construction equipment; its dependence on raw material prices and availability; and its regulatory and environmental risks related to emission norms and safety standards.


To conclude, ACE is a well-established and growing company in the construction equipment industry. It has delivered strong results in the past year and has a positive outlook for the future. It has a competitive edge over some of its peers due to its diversified product portfolio and wide geographical presence. However, it also faces challenges from other players in the industry who have similar or higher capabilities and resources than ACE. Therefore, investors should carefully weigh the pros and cons of investing in ACE's shares.

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