Capex (90-100 Cr) targetted to increase capacity underway, Q3-Q4 completion date. Cranes to target 12,000 units p.a., Construction Equipment target 3000 units p.a., forklifts target 3000 units p.a., Tower Cranes target 900 units p.a. from 400, crawler cranes target 300 units p.a. from 50 units. This all capex will help in achieving 4,000 Cr turnover p.a.
Growth of 20-25% expected on consolidated basis. Cranes 18-20%, Construction 45-50%, material handling 15-20%,
Current land only one more capex possible so looking for 50-60 acres land in UP/MP for next factory, might be closed in another 2-3 months.
455 Cr cash, 35-40 Cr working capital debt.
Q1 FY24 performance: ACE reported strong and resilient performance, surpassing Q4 numbers and achieving the best ever quarterly performance in terms of revenues and profit. First time ever Q1 results surpassed previous Q4, and even during monsoon company is under delivering due to high demand.
Agri segment: Revenues grew by over 30% YoY with an EBITDA margin of 15%.
Crane segment: Retained dominant market leadership position with revenue of Rs. 441 crores, up 26% YoY.
Construction equipment segment: Achieved revenue growth of 78% YoY.
Material handling segment: Recorded revenue growth of 10% YoY.
Capacity expansion: ACE is focused on expanding capacities and aims to attain revenue of Rs. 4,000 crores at full utilization levels.
Consolidated growth guidance: Expects a growth of at least 20-25% on a consolidated basis for FY24.
Export opportunities: Actively pursuing export opportunities and expects export sales to contribute around 10% to revenue this year. Ghana project delayed further, mostly will strat in 2nd half.
Financials: Debt-free with sufficient liquidity for future growth.
Inorganic growth: Looking at inorganic growth opportunities within India and outside the country.
Margin focus: Aims to maintain double-digit margins and focused on cost control and reduction initiatives.
Demand outlook: Expects sustained demand supported by government focus on infrastructure and urban/rural development.
Long-term prospects: Optimistic about medium to long-term prospects and remains focused on delivering growth agenda.
“Our estimate is that the Indian market will grow 2-3 times by 2030. Not only that, with the direction that the government has set when it comes to sustainable power solutions related to the electrification or use of alternative fuels, India will lead the way,” said Dimitrov Krishnan, head of Volvo CE India.
India is currently the world’s third-largest market for construction equipment, after the US and China.
not really insider in a sense. this is for the employee esop, where the company has given shares as a incentive to employees. The trust buys these shares to be distributed at a discounted price. The employee after exercising the ESOP, can sell the shares after any lock-in period that is applicable.
As I understand ESOP is new stock issue and not purchasing fm market. And company takes loss of difference between current price or book value (not sure) as a cost.
Is this also another way of procuring under welfare trust from market and distributing as ESOP?
ESOP need not be new stock issue, it depends on how the company wants to structure the scheme. In accounting terms either new shares or purchase of existing for ESOP trust, both have similar accounting costs, cash flow might be different. Advantage of purchase from market is, existing shareholding is not diluted, also acts like a limited time buyback, since the ESOP shares are taken out of market for sometime, thereby reducing liquidity and giving some minor price support…
However here in case of ACE they purchase under employee welfare trust and therefore as it is not ESOP trust my understanding…
Current purchase is not for ESOP purchase.
Company has purchased another land parcel of 82 acres for future capex, title deed to be done by March’24, all transaction to be completed by May’24.
Currently it had 100 acres land, which would have been sufficient for another 50% increase in topline, so it would have got saturated in another 1-2 yrs at current growth rate.
With this new 82 acre plot, it will help for 4-5 years minimum planning for capex.
Moving as expected, Powermech and Redtape were other recent successes. Never believed in charts earlier but as I realized just like how ECG is for the heart, Charts are for market sentiments. So yeah, I think when mixed with the right fundamental analysis it does work.
Thank you @Mohit_baid . Any idea why it’s racing so much ahead of it’s fundamental? Why such high PE for it? Where can the EPS be in next 3-5 years?
Thanks
As per my calculations, the stock is trading around 35 FPE (FY25) in a market where much weaker businesses are getting 60-70 FPE so I wouldn’t say that it is racing ahead of its fundamentals because this is how the market works right? Stocks are priced based on the anticipated future and as of today, it is fairly valued with some more room left because of reasons like industry tailwinds, it’s the spade seller in the infra goldrush, rapid capacity expansion, strong earnings growth projection, great fundamentals, almost a duopoly and sound management.
