ACE reports strong Q2 with 14.5% revenue growth, margin expansion

Action Construction Equipment (ACE) has posted impressive second-quarter results for FY25, marking its best-ever July-September quarter performance. The construction equipment manufacturer reported a 14.5% year-over-year increase in revenue, accompanied by significant margin expansion.

The company's operational revenue climbed to Rs. 754.34 crores, showing a robust growth of 12.2% compared to the same period last year. More notably, ACE demonstrated strong profitability improvements, with EBITDA margins expanding by 268 basis points to reach 18.04%. The EBITDA for the quarter stood at Rs. 142.19 crores, representing a substantial jump of 34.47% from the previous year's Rs. 105.74 crores.

The company's core segment of Cranes, Material Handling & Construction Equipment continued its strong momentum, recording revenue of Rs. 693.07 crores, up 13.11% from Q2 FY24. Unit sales increased by 9% year-over-year, with 2,863 units sold during the quarter.

Sorab Agarwal, Executive Director of ACE, attributed the strong performance to the company's strategic clarity and brand strength. "Our consistent performance reflects not only our team's capabilities but also our agility in business operations," he said. "We've successfully balanced growth initiatives with prudent financial practices, allowing us to deliver strong returns while investing in capacity expansions with cutting-edge technologies."

The company's Agri equipment Division generated revenue of Rs. 61.27 crores, maintaining a margin of 3.85%. Looking ahead, ACE expects improved demand in the agricultural sector, citing favorable factors such as adequate water reservoir levels and better consumer credit availability.

For the first half of FY25, ACE reported equally impressive results, with operational revenues growing by 12.50% to Rs. 1,488 crores. The company's profitability metrics showed significant improvement, with EBITDA growing by 31.72% to Rs. 267.7 crores and PAT increasing by 26.32% to Rs. 178 crores.

The company's outlook remains optimistic, bolstered by the government's increased focus on infrastructure development. The FY25 Union Budget's allocation of Rs. 11.11 lakh crores for capital expenditure, representing a 17% increase from FY24, is expected to create sustained demand for construction and material handling equipment.

With significant budget allocations to critical infrastructure sectors – Rs. 2.78 lakh crores for roads and Rs. 2.52 lakh crores for railways – ACE is well-positioned to capitalize on India's infrastructure growth story. The company maintains a positive outlook on its medium to long-term prospects, supported by its recent capacity expansion and the government's push towards making India a global manufacturing hub.

The impressive quarterly results and positive sector outlook have reinforced ACE's position as a key player in India's infrastructure development journey, as the country works toward its "Vikasit Bharat" vision for 2047.