Strong rebound going ahead

ActionConstruction Equipment (ACE) reported robust Q4FY21 numbers led by strongperformance from all segments. Margins too improved on a Y-o-Y basis but weredown sequentially on account of higher input cost.

Revenue for thequarter came in at `457.4-crore, up49.7 per cent Y-o-Y (14 per cent Q-o-Q). The company reported that employeecost was down 18 per cent Y-o-Y while other expenses increased 30 per cent Y-o-Y.

For FY21, ACEposted a revenue increase of 6.0 per cent led by robust performance in H2. Thecompany reported cash flow to the tune of `86.05-crore during the period.

Crane segmentrevenues grew 45.7 per cent to `316.7-crorewith an EBIT margin of 12.9 per cent. The company sees crane segment growing 10per cent in FY22 even though Q1FY22 is expected to be a potential drag onoverall FY22 crane segment revenues. CE segment revenue grew 33.6 per cent,with an EBIT margin of 6.8 per cent. Material handling segment grew 74.6 percent to `37.3-crore.

Going ahead, themanagement expects CE, material handling and the agri segment to grow at a paceof 25–30 per cent in FY22E. Market analysts believe better execution pickup inH2FY22, new product launches and higher exports would aid ACE achieve itstargeted growth of 15 per cent in FY22E.

Till now, ACE waslargely reliant on the crane segment. The key catalyst for the company fromhere on, market analysts opine is how CE and agri equipment perform. With thecurrent outlook and recent quarter numbers, they are of the opinion that ACE isset to post a strong FY22 despite a sluggish Q1.

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