ACE - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.3

Here’s a comprehensive analysis of Action Construction Equipment Ltd (ACE)

🧾 Core Financials

Profitability & Growth

Quarterly PAT declined from ₹118 Cr to ₹96.8 Cr, but YoY profit variation is still positive at 15.7%, indicating resilience.

EPS: ₹35.0 — strong earnings per share for a mid-cap industrial player.

ROE: 28.5% and ROCE: 40.1% — exceptional capital efficiency, well above industry norms.

Debt & Liquidity

Debt-to-equity: 0.01 — virtually debt-free, a major strength in cyclical industries.

Dividend Yield: 0.17% — minimal, but consistent with reinvestment strategy.

📊 Valuation Indicators

Metric Value Industry Avg Remarks

P/E Ratio 32.7 37.7 Slightly undervalued

P/B Ratio ~8.5 ~5.2 Premium to book value

PEG Ratio 0.58 ~1 Undervalued relative to growth

Intrinsic Value ~₹1,250–₹1,350 — Near fair value

PEG < 1 and P/E below industry average suggest valuation is attractive, especially given strong fundamentals.

🏢 Business Model & Competitive Edge

Core Operations: Cranes, construction equipment, material handling, and agricultural machinery.

Strengths

Market leader in mobile cranes and tower cranes in India.

Diversified product base across infrastructure, real estate, and agriculture.

Strong operating leverage and export potential.

Risks

Cyclical demand tied to infrastructure and capex cycles.

Slight decline in FII holdings (-0.13%) may reflect caution.

📉 Technical & Entry Zone

Current Price: ₹1,144

DMA 50/200: ₹1,103 / ₹1,184 — trading near short-term support.

RSI: 60.4 — neutral to slightly overbought.

MACD: 17.1 — bullish momentum.

Suggested Entry Zone: ₹1,050–₹1,100 range, ideally near ₹1,000 support or DMA 50.

🕰️ Long-Term Holding Guidance

Hold if already invested, especially for industrial and infrastructure exposure.

Good for fresh entry on dips below ₹1,100.

Ideal for long-term only if

Revenue CAGR sustains above 15%.

ROCE remains above 30% and PEG stays <1.

Would you like a peer comparison with JCB India or a sector outlook for construction equipment and infrastructure?

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