ACE — earnings call
The transcript as filed. Every paragraph is addressable: its link names the page and the position it sits at in the call.
Prepared remarks
Moderator · Conference Operator
Good evening, ladies, and gentlemen.
I am Pelsia, moderator for the conference call.
Welcome to Action
Thank you.
I request the participants to restrict with two questions in the initial round and join back the queue for more questions.
Next question comes from Nishant Parikh, an Individual Investor.
Please go ahead.
Nishant Parikh Good afternoon, sir.
Congratulations, great set of numbers.
I want to understand.
How are we planning to foray into the defense sector and what products are we looking over there?
Action Construction Equipment Limited - 10 - 07.02.2024
Thank you.
Next question comes from Amol Rao from Kitara Capital Private Limited.
Please go ahead.
Amol Rao Good afternoon, sir.
Congratulations.
It's a super performance once again and made a habit of delivering great numbers.
Sir, just taking you up on the quarter.
From last quarter, you mentioned that there was a slight pile up of inventory because of the festive season which was being cleared up.
That has been cleared up and that situation hasn't reoccurred, right?
Sorab Agarwal Yes.
As a matter of fact, we were short of machines eventually, by end of December.
Amol Rao That's a good point in that.
Action Construction Equipment Limited - 13 - 07.02.2024
I’m sorry to interrupt you, sir.
Could you please join back the queue, sir?
Amol Rao Sure.
I’ll do.
Okay.
Thank you, sir.
I request the participants to restrict with two questions in the initial round and join back the queue for more questions.
Next question comes from Rashmika Srikanth from Rika Enterprises.
Please go ahead.
Rashmika Srikanth Hi, congratulations on an excellent quarter.
I have a few questions for you.
My first question is, in the previous conference call you indicated that we'll be selling the large crane, the crawler crane, the Action Construction Equipment Limited - 15 - 07.02.2024
Thank you, sir.
Next question comes from Nihar Shah from Crown Capital.
Please go ahead.
Nihar Shah On the overall basis, I understand that we have 32% growth expected.
I missed your introduction commentary where you even guided for crane and construction revenue growth.
Can you just give me that number, please?
Action Construction Equipment Limited - 17 - 07.02.2024
Thank you.
Ladies and gentlemen, if you have any questions please press * and 1 on your telephone keypad.
Next question comes from Suhrid Deorah from Paladin Capital.
Please go ahead.
Suhrid Deorah Hi, good afternoon, sir, and congrats on another excellent quarter.
I just have two clarification questions.
I didn't catch, you mentioned some INR 700 crores order from the army.
What is this for?
Sorab Agarwal It's a special-purpose machine.
It's called a RTFLT, Rough Terrain Forklift.
Actually, the product is called a telehandler.
So, Army had this requirement of a very special, very compact, one-and-a-half, two tons lifting capacity.
Each machine costing somewhere between average about INR 35 lakh plus taxes about INR 40 lakhs, INR 45 lakhs.
And they wanted 1,800 numbers because this is a special purpose-built, the specifications, the height, the gradient capability, and the overall dimensions.
This product was not available off the shelf.
So, it was specially evolved for this requirement by us, and it was fielded in the Army for trial.
These trials are called NCNC.
No Cost No Commitment trials.
We have been technically everything has gone through.
The technical approval is more or less happened.
I mean, the paperwork is happening.
Over the next three to four months, already, the bid and everything is in place.
So, we are very confident it will commercially go through because we are the only Indian bidder and our competition is with a foreign company.
So, we are very hopeful it will go through.
So that is about 1,800 units, an average price around INR 35 crores.
You can very well multiply and calculate.
Suhrid Deorah This one order will be a one-time order or this is something that will be repetitive?
Action Construction Equipment Limited - 19 - 07.02.2024
Thank you.
Next question comes from Puneet Zaveri, an Individual Investor.
Please go ahead.
Puneet Zaveri Thank you for the opportunity and congrats on a very good set of numbers.
Just wanted to check on an update on the order with the Republic of Ghana.
What has been the status and is there any update on that?
Sorab Agarwal Yes, we were very hopeful as the indication given to us that the money would have come through in December, January.
Our agreements with executing banks are in place, but unfortunately, Ghana has defaulted on some of the payment obligations and their IMF loan has come through about, I think 1.8 billion.
First trans is already released.
I think it'll take another two, three, four months before the system normalizes and they are able to.
But we are on priority number one with respect to this project from Action Construction Equipment Limited - 21 - 07.02.2024
Thank you.
Next question comes from Arushi Shah from Sushil Financial Services Private Limited.
Please go ahead.
Action Construction Equipment Limited - 22 - 07.02.2024
Thank you.
I request the participants to restrict with two questions in the initial round and join back the queue for more questions.
Next question comes from Ashwin Dsouza, an Individual Investor.
Please go ahead.
Ashwin Dsouza I just want to inquire about the land parcel that we are planning to acquire.
Like, is it already done or is there some expected time frame by which it will be confirmed?
Sorab Agarwal See, the agreements are already done, the advances have been paid and the final payments, and let's say the transfer of title deeds and all that is expected to go through some part of it within March this year and the transaction to be finished by May of this year.
Ashwin Dsouza Okay.
My second question is more related to maybe new products.
I am sorry if somebody has already asked this, but I just wanted to understand.
Are there any new segments?
The infrastructure profile of the country is changing, okay, where new things have been done.
Are we looking at maybe creating new products from our perspective to address to such opportunities?
Action Construction Equipment Limited - 26 - 07.02.2024
Thank you.
Next question comes from Sarika K, an Individual Investor.
Please go ahead.
Sarika K If you can share the volume growth under crane segment strategically?
Sorab Agarwal What do you want from us?
Earning growth?
Sarika K Volume.
Sorab Agarwal I've not been able to understand your question, I’m so sorry.
Sarika K Okay.
What had been the share of the volume growth in 43% has been the overall the growth under crane segment for this quarter.
How much had been on account of volume?
Sorab Agarwal Okay, on account of volume.
You're talking with respect to only the crane segment?
Sarika K Yes.
Sorab Agarwal Do we have answer to that, Vyom?
With respect to your earnings presentation, I'm sure you give the crane numbers.
I don't have the earnings presentation in front of me unfortunately.
Action Construction Equipment Limited - 28 - 07.02.2024
Thank you, sir.
That was the last question for the day.
Now I hand over the floor to management for closing comments.
Sorab Agarwal I think a lot of interesting questions today.
And a lot of you congratulated us for our numbers.
I hope and pray that the country keeps on doing well.
We also fall in track like we already are.
And keep on performing the way we have been doing in the past, in fact in the last two, three years.
I would say that our economy right now is very buoyant, especially owing to manufacturing and infrastructure sectors and focused.
Our company is very well placed to capitalize on the growth and the buoyancy which is there currently in the market.
We are expecting at least a 32% revenue growth in the current year with around a 15.5%-plus EBITDA margin on a whole-year basis.
Our capacities have increased and will be more or less fully commissioned by end of March which will help us further grow our business.
Our defense business has been reasonably robust and the orders that we got in the past, some of them have been executed, balance are under execution.
New bigger orders are in pipeline for the next year.
I believe that our short-term and medium-term prospects are very well in place.
We are very confident for the long-term prospects of the company.
As conveyed earlier between FY23 and FY26, again keeping FY23 as base from INR 2,200 crores, we really expect to double ourselves by FY26 to INR 4,400 crores and going forward to up to INR 5,500 crores in FY27. With that I would like to thank you all for joining the call and thanks a lot.
Bye-bye.
Rajan Luthra Thank you.
Thank you everybody.
Thank you, sir.
Ladies and gentlemen, this concludes your conference for today.
Thank you for your participation and for using Door Sabha's conference call service.
You may disconnect your lines now.
Thank you and have a good day.
Sorab Agarwal Thank you.
Thank you, sir.
Questions and answers
Moderator · Conference Operator
Thank you, sir.
Ladies and gentlemen, we will now begin the question-and-answer session.
If you have a question, please press * and 1 on your telephone keypad and wait for your turn to ask the question.
If you would like to withdraw your request, you may do so by pressing * and 1 again.
Ladies and Action Construction Equipment Limited - 6 - 07.02.2024