Action Construction Equipment Limited

Industrials — Farm & Heavy Construction Machinery · NSE

₹1,136.80−₹18.90 (−1.64%)

DalalBaazaar Score

74 / 100

🟢 Good

Verdict

REASONABLE

Risk

Low

Driven by small-cap size, which brings sharper price swings.

In simple words: Strong business and financial position, with both sales and profits growing well. Nothing on this snapshot stands out as an immediate concern — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:04 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

The 60-second version of Action Construction Equipment Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Action Construction Equipment Limited manufactures and sells material handling and construction equipment primarily in India and internationally. The company operates through two segments: Crane, Material Handling and Construction equipment, and Agri Equipment.

IndustryFarm & Heavy Construction Machinery

SectorIndustrials

Employees1,500

Annual revenue₹3,278 Cr

How does it make money?

Turns over ₹3,278 Cr a year. Of every ₹100 of sales, about ₹13 reaches shareholders as profit, with ₹18 left at the operating level before interest, tax and depreciation. Each of its 1,500 employees supports ₹2.19 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin17.7%

Net margin12.7%

Revenue / employee₹2.19 Cr

Who are its competitors?

The closest listed comparisons in its industry are MAHINDRA & MAHINDRA LTD, ASHOK LEYLAND LTD, TATA MOTORS LIMITED, LARSEN & TOUBRO LTD.. These are the companies its valuation and returns are measured against elsewhere in this report.

MAHINDRA & MAHINDRA LTDP/E 17.8x · ROE 19.7%

ASHOK LEYLAND LTDP/E 25.2x · ROE 24.4%

TATA MOTORS LIMITEDP/E 37.1x · ROE 32.8%

LARSEN & TOUBRO LTD.P/E 30.1x · ROE 15.2%

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 28.5%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 20.6% against a peer median of 24.4% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

ROCE28.5%

ROE20.6%

Peer median ROE24.4%

What is the outlook?

1 analysts covering the stock expect revenue to grow about 14.5% and earnings to grow about 16.9% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+14.5%

Est. earnings growth+16.9%

Analysts1

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +52% while net margin moved +59% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+52%

Margin effect+59%

DalalBaazaar Score

74/ 100

Good

Weighted across six categories. Every point is explained below.

• P/E of 31.0x already prices in growth
✓ P/E is 32% below its own historical median of 45.3x — cheap by its own standards
✗ P/B of 6.73x is a steep premium to book

Quality vs. Valuation

Company Quality

80/ 100

Excellent

How good the business is, ignoring the share price entirely.

Valuation

65/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

31.0x

3Y Median

45.3x

40 monthly readings · mean 48.8x · range 21.8x–105.4x

Sector Median

27.6x

median of 4 sector peers

🟢Current valuation is approximately 32% below its 3y median of 45.3x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟡Against its sector it is priced broadly in line with the peer median of 27.6x.

vs. its own history

Cheap

45.3x median over 40 months · -32%

vs. sector peers

Fair

27.6x median of 4 peers · +12%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

31.0x

P/B

6.73x

EV/EBITDA

23.3x

PEG

0.90

Dividend Yield

0.18%

What's Good / What's Bad

🟢 What's Going Well6

Margins are improving
EBITDA margin is up from 12.0% to 17.7% over 3 years.
Cash generation is improving
Free cash flow is up 62% over 3 years.
Return on capital is rising
ROCE has improved from 26.0% to 28.5%.
High return on capital employed
ROCE of 28.5% is the mark of a business that converts capital into profit efficiently.
Valuation below its historical average
At 31.0x the stock trades 32% below its own median of 45.3x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

No automated checks triggered

None of the automated financial checks below were triggered on the years of data available. That is not the same as a clean bill of health — see what could not be checked.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 28.5% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 12.0% to 17.7%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 32% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹324 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 11% a year✓ 15.0% CAGR
Latest reported year was 20.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 16%✓ 17.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹324 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 25%✓ 28.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

12 / 12 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

7 good · 3 neutral · 1 weak

Market Cap

₹13,531 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

31.0x

Fair

Fairly valued against the generic band

P/B Ratio

6.73x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹36.7

Profitable

Profitable on a per-share basis

ROE

20.6%

Strong

Strong capital efficiency

ROCE

28.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.39x

Low

Conservative leverage

Revenue Growth (YoY)

20.5%

Healthy

Healthy top-line growth

Profit Growth (YoY)

22.3%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.18%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹324 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹1,136.8

P/E (Forward)

24.1x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

13.8%

Average

Average margins

Net Margin

12.8%

Good

Strong bottom-line conversion

Current Ratio

1.33

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.40

Defensive

Steadier than the market

52W Range Position

75%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1212.8 / 1163.2

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

33.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2,157 Cr	₹2,910 Cr	₹3,325 Cr	₹3,278 Cr	+15.0%
EBITDA	₹259 Cr	₹454 Cr	₹563 Cr	₹579 Cr	+30.7%
EBITDA Margin	12.0%	15.6%	16.9%	17.7%	—
PAT (Net Profit)	₹172 Cr	₹328 Cr	₹409 Cr	₹415 Cr	+34.2%
EPS	₹14.41	₹27.56	₹34.37	₹34.87	+34.3%
ROE	18.7%	26.7%	25.3%	20.6%	—
ROCE	26.0%	36.7%	35.5%	28.5%	—
Total Debt	₹7 Cr	₹4 Cr	₹16 Cr	₹8 Cr	+2.0%
Free Cash Flow	₹200 Cr	₹258 Cr	₹191 Cr	₹324 Cr	+17.4%

🟢 Revenue has grown at 15.0% a year over 3 years.

🟢 EBITDA has grown at 30.7% a year over 3 years.

🟢 EBITDA Margin has risen from 12.0% to 17.7% over 3 years (+5.6 pts).

🟢 PAT (Net Profit) has grown at 34.2% a year over 3 years.

🟢 EPS has grown at 34.3% a year over 3 years.

🟢 ROE has risen from 18.7% to 20.6% over 3 years (+2.0 pts).

🟢 ROCE has risen from 26.0% to 28.5% over 3 years (+2.4 pts).

🔴 Total Debt has grown at 2.0% a year over 3 years.

🟢 Free Cash Flow has grown at 17.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹3,252 Cr

Total Liabilities

₹1,241 Cr

Total Debt

₹8 Cr

Cash & Equivalents

₹64 Cr

Operating Cash Flow

₹417 Cr

Capex

-₹93 Cr

Shareholding (proxy)

Institutional Holding

8.1%

Insider Holding

66.8%

Corporate Actions

Dividend Rate

₹2

Ex-Dividend Date

03 Sept 2026

Analyst Consensus

Recommendations

1 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹1,320

+16.1% vs CMP

Target Range

₹1,320 – ₹1,320

Peer Comparison

Company	P/E	ROE
MAHINDRA & MAHINDRA LTD	17.8x	19.7%
ASHOK LEYLAND LTD	25.2x	24.4%
TATA MOTORS LIMITED	37.1x	32.8%
LARSEN & TOUBRO LTD.	30.1x	15.2%

Recent News

3 positive1 mixed2 general

Action Construction Equipment (ACE) Share Price near 52-week high on strong price action

Univest, 06 Oct

Action Construction Equipment shares gain 3% after Defence Ministry order win

Moneycontrol.com, 30 SeptOrder win

🟢Potentially positiveOrder wins add to future revenue, though the effect depends on the contract's size against annual sales and on when it is executed.

Why You Might Be Interested In Action Construction Equipment Limited (NSE:ACE) For Its Upcoming Dividend

Simply Wall Street, 30 AugCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Action Construction share price jumps 50% in 6 months - ICICI Direct sees it rising further | 12-month target price

Livemint, 22 SeptPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Action Construction Equipment Limited Actuals & Estimates (NSE:ACE)

TradingView, 25 Jun

Action Construction Equipment Q1 Standalone Net Profit Rises to 1.2B Rupees vs 977M YoY

Sahi, 20 JulResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟢Business QualityStrong14.1/20

🟢Financial HealthStrong16.5/20

🟢GrowthStrong16.1/20

🟢ProfitabilityStrong13.1/15

🟡ValuationFair7.9/15

🟡RiskModerate6/10

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself.

This thesis breaks if

✓Revenue growth stays above 11% a year15.0% CAGR
✓EBITDA margin holds above 16%17.7%
✓Free cash flow remains positive₹324 Cr
✓Debt / EBITDA stays below 2x0.0x
✓ROCE stays above 25%28.5%