Q1 generally remains lean for construction equipment sector. You can check the past sales data also.
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ACE will now go into time correction in my opinion because their products are bought more in the first phase of any capex cycle.
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The below is a monthly VAHAN registrations that i have been tracking for ACE. You will notice (last two rows in image), that APR, MAY, OCT and NOV are the months when sales are usually down.
MAR is usually a peak in most years. JAN-MAR quarter is always the best, APR-JUN is the lowest in terms of registrations.
- Please note VAHAN registrations is just an indicator, actual sales might vary since there could be some equipment (non road) that will not be VAHAN registered.
Will the dip be a buying opportunity, we need to watch for next few months. For some reason last 1 year, the HOLD approach has worked out in most counters due to followup factors.
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Even by Vahan regs, FY25 April is highest till date they have done in an April month of any year.
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VAHAN regn as of 1st May.
Apr’24 is lower MoM, but is the highest ever Apr month VAHAN Regn. Seasonal trend seems to have kicked in, with lower volumes in Apr-Jun qtr. If Apr/May Regn volumes are a bottom kind of figure, it still works out great for ACE in FY25, time will tell. On target to cross 10K Regn for CY 2024.
The other updates on 80 Acre land acquisition, capex, defence orders, etc might have to be seen from company for valuation upside.
Do Note VAHAN Regn will be directly related to ACE sales numbers, but will not capture non-road equipment sales.
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Anyone knows what initiatives ACE is taking to increase its share in the backhoe loader segment?
JCB used to be my client & I know they do close to 12k crs revenue from India - mainly from backhoe loaders. The market size just for backhoe loaders today would easily be around ~$2bn given JCB’s market share of around 60-70%
All that I noticed in ACE’s presentation on backhoe loaders was focus on distribution but focus on tech?
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