Thread by @LnprCapital

Action Construction Equipment Ltd Analysis !!
#ACE

A detailed thread below 🪡🧵
#StockMarket #Investing

About -

ACE was established in 1995 by Mr Vijay Agarwal who has over 50 years of industry experience & is
run by a team of experienced professionals.

• ACE is an established & reputed brand with a significant presence across diversified sectors like
Construction,

Infrastructure, Manufacturing, Logistics and Agriculture.

• The co is the world’s largest Pick & Carry cranes manufacturer with over 63% market share in the Mobile cranes segment & a majority market share of more than 60% in Tower Cranes segment domestically.

• ACE also offers Crawler Cranes, Truck Mounted Cranes, Lorry Loaders, Backhoe Loaders/Loaders, Vibratory Rollers, Motor Graders, Forklifts, Tractors & Harvesters & other Construction Equipment.

• The co wide sales network, with over 100+ locations 13 regional offices in India

& also exports to over 25 countries across Middle East, Africa, Asia & Latin America.

Financial Summary -
Q4 FY22 (YoY)

Revenue were at ₹ 516 Cr vs 465 Cr
PAT at ₹ 35 Cr vs 38 Cr
EPS at ₹ 3 vs 3.4

Manufacturing Facilities -

Co has State-of-the-art production facilities based in the industrial townships of NCR, Haryana with a capacity Total Capacity (Units) to produce around 12,000 construction equipment and 9,000 Tractors annually.

R&D & Training Capabilities -

ACE puts strong emphasis on Research & Dev. Its R&D Centres at Faridabad & Palwal are recognised by DSIR – Government of India & perform the following activities.

• Catalyse tech upgradation to meet International
Standards of Safety and Quality

• Continually innovate & introduce products to cater to varying needs of the customers

• Develop & indigenize world-class technologies

• Optimize cost of products through value engineering

• Conduct upgradation of existing products & processes

Clientele -

Product Portfolio -

▪️ Cranes :

▪️ Construction Equipment :

▪️ Material Handling Equipment :

▪️ Agricultural Equipment :

▪️ Defense :

Growth Drivers -

• Indian tractor market stands at ~8,00,000 units & is anticipated to grow at a CAGR of 4.5% over the next 5 yrs owing to increase in demand for mechanization in agriculture & logistics industry.

• Budgetary allocation to Rural Development, Irrigation

Projects & Subsidies coupled with credit availability will induce increased demand.

• Prediction of a normal Monsoon in 2021 will further boost the sentiments of the sector.

• The Size of Logistics Industry in India is $215-billion.

• The logistics market in India is forecasted to grow at a CAGR of 10.5% between 2019 & 2025.

• The Manufacturing sector of India has the potential to reach US$ 1 trillion by 2025.

• India’s National Manufacturing Policy aims at increasing Manufacturing’s share in GDP to 25% by 2025, thereby augmenting growth.

• Real estate sector in India is expected to reach a market size of US$ 1 trillion by 2030 & contribute 13% to the country’s GDP by 2025.

• The roads sector is likely to account for 18% capital expenditure over FY 2019-25 & Roads worth $200 Bn to be built in next 2 years.

• NHAI is coming up with 23 new highways including network of expressways & economic corridors by March 2025.

Key Risks -

• Rising input cost

• Inability to achieve meaningful growth in CE & agri segments

Conclusion -

Asia Pacific Crane market is projected to register the highest CAGR from 2020 to 2027 owing to growing
construction activities in emerging economies, such as China, India, and the Philippines.

The Crane market is estimated to increase by 142% between FY20 and FY 25.Manufacturing sector with US$ 1 Trillion potential by 2025 will be another major driver for Cranes, apart from upcoming industrial capex cycle.

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@badola_arjun @suru27 @ishmohit1 @soicfinance