Buy Action Construction Equipment Ltd For Target Rs.385 - ICICI Direct
Follow us Now on Telegram ! Get daily 10 - 12 important updates on Business, Finance and Investment. Join our Telegram Channel
Strong performance, agri segment laggard…
About the stock: Action Construction Equipment (ACE) is an Indian construction equipment and material handling company
* ACE has eight manufacturing and one R&D site in Faridabad, Haryana
* The company has a capacity of 12000 construction equipment and 9000 tractors annually
* ACE’s product portfolio is divided into four main categories viz. agricultural equipment, construction equipment, road construction equipment and earth-moving machinery
Q2FY23 Results: ACE reported good Q2FY23 results.
* Revenue for the quarter was at | 491.8 crore, up 36% YoY, down 1% QoQ
* Absolute EBIDTA was at | 45 crore, up 11% QoQ & 29% YoY
* PAT was at | 33.9 crore vs. | 23 crore in Q2FY22 & | 45.3 crore in Q2FY23
What should investors do? ACE continues to tread on its growth path. The management has upgraded revenue guided for 25% growth across segments.
* We continue to remain positive and retain our BUY rating on the stock
Target Price and Valuation: We value ACE at | 385 i.e. 20x PE (FY24E).
Key triggers for future price performance:
* Cranes segment is doing well. Contract from Government of Ghana and strong traction from the defence sector
* Upcoming government & private capex are providing fillip to the sector
Alternate Stock Idea: We also like SKF in our capital goods coverage.
* It is one of the leading bearing manufacturers known for its deep groove ball bearings and has a presence across the industrial and auto sector
* BUY with a target price of | 5215 i.e. 40x P/E on FY24E EPS
To Read Complete Report & Disclaimer Click Here
Please refer disclaimer at https://secure.icicidirect.com/Content/StaticData/Disclaimer.html
SEBI Registration number INZ000183631
Above views are of the author and not of the website kindly read disclaimer
