In my opinion such small quantities do not mean anything except for signalling. Unless its more than 1% of their own holding I would not give it too much weight
10 Likes
Any thoughts on the narrative that the infra/capex theme has sizzled out?
https://www.ambit.co/newsletter/221/Asset%20Management_August2024
(year old article but seems to have been proven right)
This is also reflected in the slowing down of govt infra spending. A plausible story is that after the 2024 election, the govt. realized that spending on infra, while good for the country, won’t get them votes from the masses, so they’re now focusing on giving freebies.
Private capex is actually facing degrowth this year as companies are cautious given tarrifs etc.-
Press Release:Press Information Bureau
This is probably why ACE stock has derated. On one hand, this can be an opportunity to buy a fundamentally excellent company and a play on the long term India growth story at a decent valuation (which is why I entered at Rs. 932/share at 26 P/E) , but if they aren’t able to outgrow the govt. spending by penetrating new markets significantly, they might not meet their aggressive guidance (which they already lowered) and the stock might trade sideways for quite a while. Would appreciate any counterarguments.
15 Likes
@ashwind Sir, can you post vahan registration table pls
ACE management has clarified that vahan data is not very helpful as there is a lag of 1-2 months against what they have sold out. But still if you want to track it.. here is the link
4 Likes
Few points from concall [07-11-25]
- Management expects flattish to single digit growth for the full year FY 26.
- The proposed anti-dumbing duty (ADD) is 26% for one chinese player and 52% for all others, the final notification from finance ministry is expected by mid to end dec.
- The Kato JV will be effective once the govt. notification on ADD on chinese cranes is officially implemented.
- Management stated that their medium term guidance is intact, projected revenue for FY 27 is ₹4,000 to ₹4,400 crores
3 Likes
can anyone post full content of this article?
https://www.business-standard.com/industry/news/need-anti-dumping-duties-on-chinese-excavators-cranes-ace-s-sorab-agarwal-125113000417_1.html
1 Like
ACE & Sanghvi Movers Limited Sign Strategic MOU of Indigenously
Manufactured Heavy Cranes - This seems like a very good development.
Questions I have:
- Is this related to the Anti Dumping Duty that was supposed to come into effect from mid-Dec?
- Will this help ACE to break into the heavy tonnage cranes (crawler/truck) (KATO tieup) where it does not have much heft?
- Mostly this might be at lesser EBITDA, but will help in market share. Need to get more details like actual machine numbers, probable revenue, etc.
ACE & Sanghvi Movers Limited Sign Strategic MOU of Indigenously
Manufactured Heavy Cranes
6 Likes
The ADD notification on cranes was expected around mid to end of Dec,
Under Rule 18 of Anti Dumping Duty, the central govt. has three months to issue notification, now that deadline is passed, does it means that DGTR recommendation is lapsed?
1 Like
Notice from KATO WORKS for the JV
20260213_news02.pdf (148.7 KB)
6 Likes
There are many positive triggers that are being awaited for this Company in the last 5-6 quarters.
hope that Kato’s JV is a start in that direction.
Financially it’s a solid Company.
4 Likes
Action construction -
Q4 FY 26 results and concall highlights -
Q4 outcomes -
Revenues - 1029 vs 961 cr
EBITDA - 172 vs 164 cr ( margins @ 17 vs 17 pc )
Other income - (-) 6 vs 8 cr
PAT - 110 vs 119 cr
FY 26 outcomes -
Revenues - 3280 vs 3237 cr
EBITDA - 504 vs 506 cr ( margins @ 15 vs 15 pc )
Other income - 110 vs 100 cr
PAT - 415 vs 409 cr
Notes from previous concalls -
Company’s peak revenue potential ( with current capacities ) is around 5400 cr ( vs current annual run rate of aprox 3300 cr ). Current capacities are sufficient to take care of company’s growth for next 2 yrs
Company already has ample land banks for future capex ( whenever they feel its due )
Defence + Exports business have the potential to contribute to 15 pc of company’s topline. Aim to reach there in 2 yrs time. As of end of Q3, exports + defence contribution to revenues was 7 pc + 2 pc = 9 pc
PLI scheme for construction equipment makers is about to be rolled out by GoI - specially for those eqpt where the import dependence is high. Details should be announced in next 2-3 months. Most likely, this scheme shall cover the cranes with heavier tonnage - where the Chinese dumping was a big problem
Company’s margins in construction r far better ( in late teens ) vs their margins in agri segment. In fact, agri segment’s revenues r as low as 4-5 pc ( on EBITDA level ). In medium term, company intends to improve their Agri segment’s Margins to early teens
Company intends to enter the Crawler + Truck crane segments - post the announcement of PLI scheme. In addition, they also intend to enter the Piling rigs segment
Seeing rapid mkt share gains in the track harvester segment ( not the wheel harvester ). Have already become No 2 player in this segment. Have sold > 400 harvesters in 9Ms FY 26. Have also sold about 1600 tractors in 9Ms FY 26
In last 1-2 yrs, company has been selling 9-10k cranes / yr. In next 3-4 yrs, company sees this number @ 14-15k cranes / yr. Wrt construction equipment, material handling, defence, export supplies - company expects to double its volumes in these segments next 3-4 yrs. Should be able to clock 6-7k cr of annual revenues in next 3-4 yrs
Company sells about 50-60 Truck + Crawler cranes / yr. Their capacity in this segment is about 500 cranes / yr. Once the PLI scheme is implemented, company should be able to utilise their capacity
Tower cranes contribute to about 10-12 pc of company’s topline. All types of cranes put together, contribute to about 65 pc of company sales
Have got an order of 150 heavy recovery vehicles from MoD
Notes from Q4 concall -
ACE entered into strategic 50:50 JV with KATO WORKS CO, LTD. to strengthen presence in the premium heavy crane segment to capitalize on long-term growth opportunities across infrastructure and construction sectors
YoY Sales volumes in Q4 -
Construction Eqpt ( cranes + material handling ) - 3458 vs 4007 units ( vs 2710 units in Q3, 2348 in Q2 )
Agri Equipment - 753 vs 563 units ( vs 902 in Q3, 526 in Q2 )
Construction Eqpt revenues for FY 26 @ 2946 cr
Agri Eqpt revenues for FY 26 @ 334 cr
Their JV with KATO shall make equipment in heavy cranes segment like - truck mounted cranes, crawler cranes etc
Closely monitoring the current inflation in RMs. Shall resort to judicious price hikes / cost savings etc to ensure that margins are sustained @ FY 26 levels
Chinese competition is intense in cranes > 40/50 Tons category. Company was hopeful of imposition of anti dumping duties on Chinese cranes. The same has not happened
Chinese players aren’t present in < 35 T cranes category - where the company is a mkt leader. These cranes are not very popular in China, hence the Chinese hardly even make them
85-90 pc of cranes sold by company are financed by NBFCs / Banks
Aprox 50:50 is the sales breakdown of company’s cranes between rental players : EPC players
Charged/ Provisioned Rs 10 cr for full FY 26 for expected credit losses
Company’s other income is negative in Q4 as this is a MTM loss on their bond / equity portfolio as both were weak in Q4. Should start generating 25-30 cr kind of other income wef Q1 FY 25
Cash + Investments on books @ 1360 cr - deployed across Equity MFs/ Debt MFs/ Hybrid MFs / AIFs / direct equities / bonds / PMS. Aprox 405 cr are invested in Equity linked instruments, rest in Debt instruments
Have recently supplied tower cranes / pick and carry cranes to GRSL, Shipyards in Goa
Have a capacity to produce around 950-1000 tower cranes / yr. Seeing pickup I this segment post Dec 25. Demand for tower cranes is firm in Apr/May despite the geopolitical tensions ( a very positive outcome - imo )
Defence segment should contribute to 5 pc of company’s sales vs around 2 pc in FY 26 ( ie around 200 cr or so )
Took a price hike of aprox 5 pc each on 01 May and 01 Jun respectively
Company believes, Q1 volume growth should be > 15 pc ( can also be more than 20 pc )
Company’s JV with KATO should clock sales of aprox 300 cr in next 3 yrs if anti dumping duties are not levied. If they r imposed, this JV can clock 700 - 800 cr kind of sales in next 3 yrs
Company believes - Chinese competitors r selling 20 pc below cost + are offering credit periods of 1-2 yrs ( talking about heavier cranes )
Intend to set up a tower cranes factory over next 18-24 months. Should be spending aprox 400 cr towards the same
Should start the execution of a large defence order for supply of 1220 units of TeleHandlers to MoD wef Q2. Total contract value should be around 420 cr. Should be executed in FY 27 + FY 28
Have guided for a topline of > 6000 cr by FY 30. Don’t expect any substantial margin expansion from current levels ( trying to expand margins may be detrimental to their business interests )
Q1 and Q2 LY were exceptionally weak due implementation of new emission norms
Lost aprox 40-50 cr of exports in Q4 due breakout of Iran war
Have got orders to build loading / unloading platforms for QR SAMs for IA/IAF. Should get executed in next 2-3 yrs. Did not disclose the exact amounts involved here
In the export markets in EU, ME etc - the Chinese players do not resort to heavy discounting, like they do in India. Hence their export competitiveness + that of their JV with KATO in export markets in not a matter of great concern
Disc: holding, biased, not SEBI registered, posted only for educational purposes
8 Likes
Action Construction Equipment -
Q1 FY 27 results and concall highlights -
Revenues - 786 vs 652 cr, up 20 pc
EBITDA - 118 vs 93 cr, up 27 pc ( margins @ 15 vs 14 pc )
Other income - 55 vs 51 cr
PAT - 119 vs 98 cr, up 22 pc
Sales volumes and revenues -
Construction equipment - 2740 vs 2337 units, up 17 pc. Revenues @ 738 cr, up 22 pc
Agri Equipment - 440 vs 589 units, down 33 pc. Revenues @ 43 cr with EBITDA margins @ 4.3 pc
Notes from Q1 concall -
Commodity prices continue to remain elevated. Protecting margins via operational efficiencies + calibrated price hikes
H2 is always better for company’s business
Exports were soft in Q1 ( aprox 24 cr, @ 3 pc of sales ) due economic disruptions in the ME mkts
Defence supplies contributed to aprox 40 cr in revenues in Q1 ( @ 5 pc of sales )
Expecting exports to pickup meaningfully in the remainder of FY ( exports should be able to contribute to 6 pc of FY 27’s consol sales vs 3 pc in Q1 )
Seeing good demand pickup for their Hydra range of cranes. Seeing descent pickup in tower cranes, fort lift and backhoe range of equipment as well
Should commence execution of their Defence order as well ( wef Aug 26 ). The order is for the supply of 1200 tele handlers. Total contract value is 420 cr - to be executed over FY 27 + 28
Have already hiked prices for their products on 3 occasions in current CY ( amounting to a total of aprox 10 pc price hike )
Broad break up of company’s sales volumes iro cranes @ 60:40 between the Hydra range : New Gen cranes. NG cranes are aprox 30 pc more expensive vs the Hydra range
In the Hydra range, seeing market moving towards higher tonnage cranes
BackHoe loaders are a promising / high growth segment for the company. Have tasted success in this segment. Should do much better going forward
As the latest price hike taken by the company takes effect, realisation / unit should further improve in Q2 vs Q1
Consol RM inflation over last 3-4 months has been around 12 pc. Have already taken price hikes to the tune of 10 pc ( including the last hike taken in the beginning of Q2/ end of Q1 )
A new manufacturing facility of theirs shall go live by Q3 or so. Total capex required here is around 50-60 cr. This facility shall come up within their existing complex. Should have an annual revenue potential of aprox 500 cr or so
Additionally, shall be spending aprox 140 cr to acquire another land parcel ( 4-5 km away from their existing facility ) for further capex ( some time in future )
Shall be spending 50-60 cr towards increased automation / plant modernisation etc in FY 27. Combined capex for FY 27 shall be around 250 cr ( as mentioned above - sum of parts )
Not giving a growth guidance for FY 27 - due ongoing Iran war. Still confident of growing over FY 26
Growth drivers going forward should be - inorganic growth and exports, followed by increasing domestic demand
Cash on books ( > 1300 cr ) shall be used for inorganic / acquisition opportunities
Shall be investing 100 cr towards their JV with KATO. Another 100 cr shall be invested by KATO
Still hopeful of an imposition of anti dumping duties wrt import of higher tonnage cranes from China
Disc: continue to hold, biased, not SEBI registered, posted only for educational purposes, not a buy/sell recommendation
4 Likes