Buy Action Construction Equipment, target price Rs 270: Emkay Global – Economic Times

Emkay Global has buy call on Action Construction Equipment with a target price of Rs 270. The current market price of Action Construction Equipment is Rs 224.6. Time period given by analyst is one year when Action Construction Equipment Ltd. price can reach defined target.

Action Construction Equipment Ltd., incorporated in the year 1995, is a Small Cap company (having a market cap of Rs 2686.52 Crore) operating in Engineering sector.

Action Construction Equipment Ltd. key Products/Revenue Segments include Cranes, Construction Equipment and Material Handling Equipments for the year ending 31-Mar-2021.

For the quarter ended 31-12-2021, the company reported a Consolidated Total Income of Rs 441.46 Crore, up 21.54 % from last quarter Total Income of Rs 363.21 Crore and up 9.28 % from last year same quarter Total Income of Rs 403.96 Crore. Company reported net profit after tax of Rs 27.37 Crore in latest quarter.


Investment Rationale
The brokerage has cut FY23E/FY24E EPS by ~7%/5%, factoring in 50-70bps cut in margin and negligible reduction in revenue. It has estimated EBITDAM of 9.3%/10% for FY23E/FY24E on increased commodity price. Its FY23E/FY24E EPS stand at Rs10.45/Rs13.54. The stock trades at ~15x FY24E EPS. It maintains Buy with a TP of Rs270.

Promoter/FII Holdings
Promoters held 66.76 per cent stake in the company as of 31-Mar-2022, while FIIs owned 4.84 per cent, DIIs 3.49 per cent.

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