BSE-listed Action Construction Equipment (ACE) Ltd will end this fiscal with positive growth as the demand momentum outpaces supply, driven by a strong revival in the manufacturing sector and the government push on infrastructure development as well as the ‘Aatmanirbhar Bharat’ initiative.

Though the first half of the financial year was a wash out due to the pandemic and the monsoon, enquiries have started picking up from August across all sectors.

“We had an excellent third quarter. We are confident that we will end the fiscal with a positive growth across all our product categories,” Sorab Agarwal, Executive Director, ACE, told BusinessLine .

The ₹1,156-crore company is seeing good demand across all construction equipment products, cranes and agri-equipment.

In the construction equipment segment, demand appears to be robust for backhoe loaders with an estimated market size of ₹8,000-9,000 crore. The company is targeting an annual growth rate of at least 50 per cent for the next 3-5 years by leveraging its existing sales and service network.

“We are focusing on this product as there’s a strong price arbitrage opportunity with our competitors. Through better pricing, strong after-sales service, higher product performance and features we would like to gain market share in this segment and are definitely looking at higher growth rates,” Agarwal said.

Crane market

Supported by rising investments in infrastructure development, the crane market is estimated to grow at a CAGR of 20 per cent between FY20 and FY25. Manufacturing sector will be another major driver for cranes, apart from upcoming industrial capex cycle. With growth momentum, the company expects its capacity utilisation level to increase from 60 per cent to 100 per cent.

“Our focus is on improving our market share in mobile cranes. With the growth momentum in place, we will be increasing the capacity utilisation and also improving the market share in truck cranes by leveraging our strong brand equity. We also plan to introduce bigger models of crawler cranes, capitalise on high demand for bigger capacity tower cranes and finally by increasing the export contribution to revenue, he said.

ACE is a leading global pick & carry cranes manufacturer with over 63 per cent market share in the mobile cranes segment and a market share of more than 60 per cent in tower cranes segment domestically. Cranes make up about 60 per cent of company's revenue.

Market share

In the material handling equipment segment, the company is a leading forklift manufacturer with about 19 per cent market share. It plans to grow the market share to 25 per cent in 2-3 years, supported by network expansion and deeper market penetration. It also hopes to garner more volumes for its electric forklifts, first company to introduce this in India, by strengthening its focus on food, beverages and pharma segments.

ACE’s factories are located in Faridabad and the company can produce 12,000 construction equipment and 9,000 tractors annually.

comment COMMENT NOW