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Buy Action Construction Equipment: Prabhudas Lilladher
Prabhudas Lilladher is bullish on Action Construction Equipment and has recommended buy rating on the stock with a target of Rs 82 in its September 17, 2010 research report.
Prabhudas Lilladher is bullish on Action Construction Equipment and has recommended buy rating on the stock with a target of Rs 82 in its September 17, 2010 research report.
"Action Construction Equipment (ACE) is currently working on capacity utilization of ~50-55% for most of its product ranges in FY10. With an uptick in volume, we expect utilization to improve and help improve margins. The company is currently importing clawer cranes from China. However, it has put up a facility to manufacture clawer cranes in India. In-house manufacturing of crawler cranes will also help aid margins. On the back of a substantial improvement in liquidity situation, both with NBFCs and Banks, coupled with an improving demand scenario, ACE is in a sweet spot. Volume growth will drive margin and RoE expansion."
"We expect the stock to deliver 41% and 57% CAGR on top-line and bottom-line, respectively over FY10-12E. At the CMP of Rs 65, the stock trades at 12.5x FY11E and 8.8x FY12E earnings, respectively. We maintain 'BUY' on the stock," says Prabhudas Lilladher research report.
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