Action Const.Eq.

Action Construction Equipment reported a flattish total income of approximately INR 888 crores for Q3 FY26 on a year-on-year basis. Despite this, EBITDA grew by 2.48% to INR 164 crores, with the EBITDA margin expanding to 18.5%. PAT increased by 8.15% to INR 115.88 crores, achieving a PAT margin of 13.04%. For the nine months ended December 2025, total income declined by 3.21% YoY to INR 2,373 crores, but EBITDA grew by 7.15% to INR 458 crores, with a margin of 19.32%, and PAT grew by 11% to INR 316 crores.

The Crane Metal Handling and Construction Equipment segment remained the primary revenue driver, contributing 90% of total revenue with INR 763 crores in Q3 FY26, a 10% sequential growth. This segment sold 2,710 units and achieved a margin of 20%. In contrast, the Agri segment contributed 10% of revenue with INR 89.44 crores, but experienced a significant drop in EBIT margin to approximately 1% in Q3 FY26 due to provisioning. Management noted that new generation cranes, particularly bigger pick and carry cranes and tower cranes, are becoming more popular, driving margin improvement through a favorable product mix.

ACE aims to achieve INR 6,000-7,000 crores in revenue by FY29 or FY30. The company's current capacity can be expanded from INR 5,000 crores to INR 5,500-6,000 crores with minor tweaks. Plans are underway to expand tower crane capacity to 1,100 units next year, including setting up a new plant in Palwal. Additionally, ACE has acquired land in Palwal (22 acres for the new plant, 86 acres for future expansion) and Indore (30 acres for future expansion) to rationalize logistics and diversify input supply, investing INR 250 crores in land that is now valued at INR 500 crores.

ACE is focusing on new age technology, having unveiled intelligent tower cranes, AI-assisted pick and carry cranes, and advanced aerial work platforms. The company has patented four new features in its cranes, making them 'fail-safe' and enhancing operator safety and comfort, for which the market is willing to pay a premium. While Chinese players are aggressive in the larger crane segments due to predatory pricing, ACE faces no significant competition in pick and carry cranes. The company is also working to address the NBFC-driven preference for JCB in the backhoe loader market.

The Union Budget 2026 reinforces a growth-oriented roadmap with continued thrust on capital expenditure, including initiatives like the infrastructure risk guarantee fund and dedicated freight corridors. ACE expects to benefit from the upcoming PLI scheme for construction and infrastructure equipment, which targets import substitution. The company aims for defense and exports to contribute upwards of 10% to revenue by FY27, with defense contribution rising to 4-5% (from ~2%) and export contribution reaching 10% (from 6-7%). Currently, ACE has approximately INR 500 crores in defense orders, with INR 150-200 crores expected to be executed next year.

ACE maintains a debt-free status and aims for a zero working capital scenario by the end of the current fiscal year, a feat achieved last year. The company has approximately INR 1,200 crores available on its books, which it plans to deploy for internal growth and strategic initiatives, including capacity expansion and land acquisitions, without the need for external debt or equity raises. This strong liquidity position supports its ambitious growth targets and allows for strategic investments.