ACE - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 4.4

📊 Fundamental Analysis Summary

Action Construction Equipment (ACE) shows strong fundamentals and efficient capital usage, making it a compelling long-term investment candidate. Here's a breakdown of the key metrics

Metric Value Interpretation

Market Cap ₹13,316 Cr Mid-cap, stable and growing

Stock P/E 32.5 Reasonable vs. industry PE of 44.5 — not overpriced

PEG Ratio 0.57 Undervalued relative to growth — strong long-term potential

ROE / ROCE 28.8% / 40.3% Exceptional capital efficiency — top-tier metrics

Dividend Yield 0.18% Minimal dividends — growth-focused strategy

Debt-to-Equity 0.01 Virtually debt-free — very low financial risk

EPS ₹34.4 Solid earnings base

Book Value ₹136 Price-to-book ratio ~8.2× — expensive on asset basis, but justified by ROCE

PAT Growth (QoQ) +6.25% Consistent profit growth

RSI / MACD 36.2 / -26.1 RSI near oversold; MACD negative — weak short-term sentiment

FII/DII Holding Change -0.13% / +0.08% Slight FII reduction; DII marginally positive

52W Price Range ₹917 – ₹1,600 Currently near lower end — attractive entry zone

📉 Valuation & Entry Price Zone

With a PEG ratio well below 1 and RSI near 36, ACE appears undervalued relative to its growth. MACD suggests bearish momentum, but this could be a setup for accumulation.

Ideal Entry Zone: ₹980 – ₹1,080

This range offers a good margin of safety near the 52-week low.

Wait for MACD crossover or RSI reversal for technical confirmation.

🧭 If You Already Hold the Stock

Holding Strategy

Time Horizon: 3–5 years minimum, given strong ROCE and PEG metrics.

Exit Strategy: Consider trimming if price exceeds ₹1,500–₹1,600 without corresponding earnings growth.

Monitor: ROCE sustainability, PAT growth, and PEG ratio. If PEG rises above 1.2 and ROCE declines, reassess.

Key Triggers to Watch

PAT consistently above ₹120 Cr per quarter

ROCE maintained above 35%

PEG ratio staying below 0.8

🧠 Final Thoughts

ACE is a high-quality compounder with excellent capital efficiency, low debt, and undervaluation relative to growth. It’s a strong candidate for long-term wealth creation, especially if accumulated near current levels.

Would you like a side-by-side comparison with other capital goods or infra equipment players like Schaeffler India or BEML to see how ACE stacks up?

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