Action Const.Eq.

Action Construction Equipment Limited achieved its highest-ever sales and profits in FY25, with standalone total income reaching INR 3,420 crores, representing a 14.47% YoY growth. EBITDA surged 25% to INR 599 crores, and PAT increased 23% to INR 404 crores. The company's EBITDA margin expanded by 148 basis points to 17.52% for the full year, driven by better realization, a favorable product mix, and efficient cost control. For Q4 FY25, total income was INR 967.55 crores, a 12.98% YoY increase, with an EBITDA margin of 17.7%.

The company secured its single largest order to date, valued at INR 420 crores, for 1,121 rough terrain forklifts and telehandlers from the Indian armed forces. This order is expected to contribute INR 80-90 crores in FY26, with the balance over a 3-year timeline. Management projects defense revenue to reach approximately 4% in FY26 and exceed 5% in FY27, aligning with the 'Atmanirbhar Bharat' initiative. Combined with exports, the defense and export contribution is targeted at 9-10% in FY26 and 10-15% in the medium term.

ACE anticipates a subdued start to FY26 due to geopolitical issues, tariff-related conflicts, and the implementation of CEV 5/BS V emission norms. These new norms have led to significant price increases of 12-13% for 60% of the company's products, causing a temporary slowdown in inquiries and orders, particularly as rental companies adjust their pricing. Despite these challenges, the company targets a top-line growth of 14-15% for FY26 and aims to maintain a stable margin profile of 17-18%, with projections to be revisited by the end of Q2 FY26.

The company has completed its planned capital expenditure, expanding crane capacity to 13,200 units, metal handling to 2,700 units, and construction equipment to 1,800 units, with a blended utilization of approximately 70%. For FY26, ACE plans a capex of INR 300-350 crores. This includes INR 100 crores for modernization and upgradation of existing facilities, and another INR 100 crores towards a new plant or capacity expansion for a specific crane type. An additional INR 150 crores is allocated for different lines under procurement, alongside a INR 150 crore payout for new land acquisitions.

The anti-dumping duty (ADD) investigation against Chinese imports of truck and crawler cranes is progressing, with a final order expected by June/July and implementation by the Finance Ministry in Q2 FY26. ACE estimates a potential duty of approximately 40%, which could significantly address the historical issue of Chinese dumping that has impacted the Indian crane industry. This market segment, with an addressable size of INR 1,500-1,600 crores, saw ACE contribute INR 60-70 crores in FY25, and the company has a capacity to produce 400 such cranes.

The joint venture with a Japanese player (Kato) is on target to become functional by Q3 FY26, presenting an immediate annual opportunity of INR 300-400 crores. ACE expects to recognize approximately INR 100 crores in revenue from this 50-50 JV in FY26, contributing to the bottom line. Additionally, the company is awaiting regulatory approvals for the commercial sale of its electric cranes, expected within the next month, marking a step towards eco-friendly product offerings and market diversification.

The core Cranes, Metal Handling, and Construction segment recorded over INR 3,090 crores in FY25, growing 15.5% YoY, with profits increasing 25.36% to INR 564 crores and a margin of 18.26%. In contrast, the Agri division generated around INR 230 crores with a lower margin of 3.73%. Management acknowledged the Agri division's consistent underperformance despite ongoing efforts to improve profitability. The company maintains a diversified revenue base, with manufacturing/logistics contributing ~45%, construction/infrastructure ~35%, real estate 12-13%, and agriculture 7-8%.