40% in 3 Months: How This Multibagger Stock Soared on a Japan JV, Defence Orders, and More

Synopsis: A Haryana-based equipment maker just posted its best-ever quarterly revenue, struck a joint venture with a Japanese heavy-machinery giant, and is sitting on a defence order book worth hundreds of crores – all while battling rising steel costs.

After a subdued first half hit by emission-norm transitions and a slower project cycle, this company’s fourth quarter marked a sharp turnaround. Management flagged a demand revival, an ambitious international tie-up, and a growing defence pipeline as key growth levers heading into FY27, even as geopolitical headwinds and commodity inflation cloud the near-term outlook.

Shares of Action Construction Equipment Limited, with a market capitalization of Rs. 11,789 Crore, closed at Rs.990 i.e. around 2.63% down its previous closing price of Rs.1016.7. It is trading at a P/E ratio of 29.17.

At the start of April, the stock was trading around ₹750. Since then, it has climbed to nearly ₹1,050, delivering an impressive 40% gain in just three months and significantly outperforming the broader market. 

A Strong Finish to a Choppy Year

Action Construction Equipment Limited (ACE) closed FY26 with standalone total income of ₹3,395 crores, broadly flat year-on-year, but the real story was in the margins and the momentum. EBITDA margin expanded 81 basis points to 18.33%, while PAT rose 5.4% to ₹425 crores. The fourth quarter alone delivered the company’s best-ever quarterly revenue performance, at ₹1,021 crores, up 15% sequentially and 5.58% year-on-year, even as the escalating West Asia crisis pushed up crude and steel prices and weakened the rupee through March.

Management said demand for cranes, metal handling and construction equipment returned with full force in Q4, reversing a soft first half caused by the shift to new emission norms, extended monsoons and slower project mobilisation. The company remains debt-free.

The KATO Joint Venture: A Bet on Heavy Cranes

Perhaps the most significant development is the newly finalised 50-50 joint venture with Japan’s KATO Works Company, a globally recognised name in heavy crane technology. The JV will focus on truck cranes, crawler cranes and rough-terrain cranes – a segment where the company has traditionally lagged Chinese players who dominate the 40-tonne-plus category.

Management expects this venture to generate upwards of ₹300 crores in revenue over the next three to four years under current conditions, with the potential to scale to ₹700-800 crores if pending anti-dumping duties on Chinese crane imports are finally notified by the Finance Ministry. The JV will also serve as an export hub, with India-made components potentially being supplied to KATO’s Japan operations – creating an additional revenue stream beyond crane sales.

Defence Business Gathering Pace

The defence segment is emerging as a meaningful growth driver. The company currently has a pending order book of around ₹575 crores in this vertical, and expects its contribution to overall revenue to rise from roughly 3% last year to 5-6% in FY27 – translating to over ₹200 crores. Management also confirmed it has secured approvals for a large rough-terrain forklift (telehandler) order and is building prototypes for a quick-response surface-to-air missile programme, though strictly on the material-handling side rather than firing systems. Combined with exports, defence and export revenue together are targeted at 10-15% of overall sales going forward, up from around 9% last year.

Margins Under Pressure, But Pricing Actions Underway

Steel, which accounts for roughly 65% of input costs, has risen 20-22% since January, prompting the company to push through cumulative price hikes of 9-10% already, with another round planned from June that could take total increases closer to 11-14%. Management remains confident of holding EBITDA margins (excluding other income) in the 15-16% range, citing a wide gap versus competitors operating at 8-9% margins.

What Lies Ahead

The company has deliberately withheld formal annual guidance, citing an unusually volatile macro backdrop – from crude price shocks to currency depreciation – and plans to revisit its medium-term target of ₹6,000-6,200 crores in revenue by FY29-30 only by the second quarter of this fiscal. Capex plans include roughly ₹200 crores this year for land and a new defence-focused facility, with a larger ₹400 crore tower crane plant contingent on demand visibility.

Action Construction Equipment (ACE) is India’s leading manufacturer of cranes and construction equipment, with a strong presence across material handling, earthmoving and agricultural machinery. The company serves infrastructure, manufacturing, logistics, defence and industrial sectors. Backed by expanding export opportunities, a growing defence business and a recent joint venture with Japan’s KATO Works, ACE is strengthening its position in the heavy equipment market. 

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