Action construction equipment ltd

Very bullish commentary from management on the con-call. My notes below:

1. Contribution of export segment which is at about 6% currently is expected to grow to 9-10% in current year and 15-20% in the medium term.

2. Expecting15-20% growth in Crains, material handling and agri during FY 2024.

3. Expecting 30-35% growth in construction equipment’s segment – should hit a revenue of 300-350 Crore during current year and grow to 500 Crore the year after!

4. Margins to improve due to operating leverage and product mix change.

5. Electric Crains will be commercialised in Q2.

6. Looking out for acquisitions provided they come at the right price. Expect an announcement within the next 2 quarters.

7. Revenue Mix – Construction equipment share which is currently at 11% may go up to 14% in about 2 years.

8. Investment in Ghana: Discussions with Ghana government continuing. Will start work only one advance payment is received. Issues are expected to get resolved by Q2.

9. Agri equipment annual revenue to hit 300-350 Crore by FY 2025. This is when the operating leverage is expected playout leading to margin improvement from this segment.

10. ESOP program is rolled out to employees. Need to understand this better and see how much dilution in equity is expected.

11. Management is committed to double the revenue in 3 years.

Link to concall here.

Thanks,
AJ
Disclaimer: Been holding some shares from 2019, added after listening to commentary. Views are biased.