Construction equipment

Action’s construction equipment inventory has increased by 39% in the last month

Action Construction Equipment (ACE) stock hit a new high on Monday at 306.95 rupees, rising more than 7% on BSE during intraday trading, extending its push on a positive outlook for the economy. Shares of Construction Equipment and Material Handling Company are up 39% over the past month, while the S&P BSE Sensex is up just 1.7%.

In Faridabad, Haryana, ACE has eight production sites and an R&D center. More than 60% of the crane market is controlled by the company, which also accounts for 70% of total turnover. Infrastructure, construction, energy projects, ports and shipyards, dams, metro, roads, mining, steel industry, mechanical industry, railways, cement, petroleum, defense, chemical and fertilizer plants, warehousing, logistics, building construction and many other industries use company equipment.

Despite a tough time during the second wave of Covid, the company fared better due to rising exports and demand for construction equipment. ACE posted its all-time highest sales and profits in fiscal year 21-22, outperforming on all financial metrics. Comparing FY21 and FY22 on a consolidated basis, the company’s total revenue increased by 32% to Rs 1,630 crore, EBITDA increased by 24% to Rs 167 crore and profit after tax increased by 32% to reach Rs. 105 crore.

The construction and real estate industry, in addition to the infrastructure sector, has seen a strong recovery in the past fiscal year, and the future of this sector is favorable to the Agriculture section, according to the management of ACE in its FY22 annual report.

The expansion of the Indian construction equipment market has been fueled by the rise of public and private infrastructure, FDI reforms for the construction sector, highway projects and an expanding economy. The Indian government has recently invested in the infrastructure sector. According to the company, heavy investment in infrastructure development in India is expected to increase the demand for various types of construction machinery.

ACE said the steady free cash flow creates opportunities to strengthen neighboring product categories. With more money in the bank, the company can invest in new product areas and technologies. The introduction of the Production Linked Incentives (PLI) program to promote infrastructure development, the growing influx of private and public investment into the country, as well as the increased inflow of FDI, are all favorable aspects of the demand for construction equipment.

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