ICICI Direct has given Buy recommendation for Action Construction Equipment recommended buy rating on the stock with a target price of Rs 215 in its research r with a target price of Rs. 215 in its research report issued on Mar 15, 2021
ICICI Direct’s research report on Action Construction Equipment
Action Construction (ACE) hosted an analyst meet (virtual) wherein the management brought us up to speed on the recent business updates and also provided us an outlook on the sector. The infrastructure industry is witnessing robust traction with upcoming capex in metro, rail, manufacturing, road and real estate sector. Hence, demand for cranes and construction equipment is expected to see a significant improvement. The management remained assertive on the fact that ACE would become a counter cyclical company powered by 50-60% growth in CE & 25-30% growth in crane, agri equipment & material handling segments.
Hence, this calls for a multiple upgrade given the company is on the cusp of posting historically high growth rate. We value ACE at 11x FY23E EV/EBIDTA and maintain BUY rating with a revised target price of Rs 215 (earlier Rs 160).