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Action Construction Equipment stock up by 39% in the past one month

  • India Infoline News Service |
  • 05 Sep, 2022 |
  • 3:08 PM
Action Construction Equipment (ACE) stock reached a new high on Monday at Rs306.95, rising over 7% on the BSE during intraday trade, extending its surge on a positive outlook for the economy. Construction Equipment and Material Handling Company's stock has increased 39% over the past month, while the S&P BSE Sensex has only increased by 1.7%.

In Faridabad, Haryana, ACE has eight production facilities and one R&D facility. Over 60% of the crane market is controlled by the corporation, which also accounts for 70% of total revenue. Infrastructure, construction, power projects, ports & shipyards, dams, metro rail, roads, mining, steel industry, engineering industry, railways, cement, petroleum, defense, chemicals & fertilizer plants, warehousing, logistics, building construction, and many other industries utilize the company's equipment.

Despite having a difficult time during Covid's second wave, the firm has done better because of rising exports and demand for construction equipment. ACE had its greatest ever sales and profit in FY21–22, outperforming across all financial metrics. Comparing FY21 to FY22 on a consolidated basis, the company's total income increased by 32% to Rs1,630 crore, EBITDA increased by 24% to Rs167 crore, and profit after tax increased by 32% to Rs105 crore.

The building and real estate industry, in addition to the infrastructure sector, saw a strong recovery in the previous fiscal year, and the future for this sector is favorable for the Agriculture section, according to ACE's management in its FY22 annual report.
The expansion of India's construction equipment market has been fueled by rising public and private infrastructure, FDI reforms for the construction sector, highway projects, and an expanding economy. India's government has lately made investments in the infrastructure industry. According to the corporation, significant investment in India's infrastructure development is expected to increase demand for various types of construction machinery.

ACE said that the consistent free cash flow creates chances to strengthen neighboring product categories. With more money in the bank, the company may invest in new product sectors and technology. The introduction of the Production Linked Incentive (PLI) program to promote infrastructure development, the increasing inflow of private and public investments into the nation, as well as the increased inflow of FDI, are all aspects that are good for the demand for construction equipment.

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