Ladies and gentlemen, good day, and welcome to the Action Construction Equipment Q4 FY 2026 earnings conference call. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Divyam Jain from 360 ONE Capital Market Private Limited. Thank you. Over to you, sir.
Good afternoon, everyone. I would like to welcome the management and thank them for this opportunity. We have with us today Mr. Sorab Agarwal, Executive Director; Mr. Rajan Luthra, the Chief Financial Officer; and Mr. Vyom Agarwal, our President. I shall now hand over the call to the management for their opening remarks. Over to you, sir.
Yeah. Good afternoon, everybody, and welcome to this earnings conference call for the fourth quarter and year ended March 2026. Along with me in today's earnings con call, we have our CFO, Mr. Rajan Luthra, and our President, Mr. Vyom Agarwal. I hope you have had an opportunity to look at the company's financial statements and the earnings presentation, which have been circulated and uploaded at the stock exchanges. During the quarter, the demand conditions remained stable across the market except the month of March, supported by conducive macroeconomic environment and a series of fiscal and monetary measures implemented through the year. Lower headline inflation for a significant part of the period also supported demand in quarter four. Towards the end of the period, the escalation of West Asia crisis led to a sharp rise in crude and crude linked commodity prices, supply-side disruptions, and continued rupee depreciation.
Despite these geopolitical headwinds, we responded with agility and operational discipline to deliver our best-ever revenue performance in quarter four last year, with sustained operating margins to fortify our balance sheet. Let me take you through some of the highlights of this fiscal. On a standalone basis, we have achieved a total income of INR 3,395 crores in this fiscal, which is more or less flattish. Our EBITDA margin for the year expanded by 81 basis points to 18.33% from 17.52% last year, and profit before tax expanded by 80 basis points to 16.68% from 15.88%, and PAT increased by 73 basis points to 12.53% from 11.8%. In absolute terms, EBITDA grew by around 4% to INR 622.36 crores as against INR 599 crores in the preceding year.
We were able to increase our PBT by 4.3% from INR 543 crores in FY 2025 to INR 566 crores in FY 2026. Similarly, our PAT also increased from INR 404 crores to INR 425 crores, thereby registering a growth of 5.4% in the last financial year. The quarter began on a strong note, supported by a healthy market sentiment. However, during March, the escalation of West Asia crisis led to raw material supply disruptions, inflationary pressures, continued rupee depreciation, impacting the overall cost environment. To brief you on the financial performance of the fourth quarter FY 2026 on a standalone basis, the total income stood at INR 1,021 crores for the quarter, which is up 15% sequentially and grew by about 5.58% on a year-on-year basis.
The EBITDA for the quarter at INR 163.7 crores. The EBITDA for the quarter stood at INR 163.7 crores, whereas the PBT and PAT were at INR 151 and INR 108 crores respectively. Our company was able to sustain expanded margin profile, EBITDA margin stood at 16%. The PBT and PAT margins stood at 14.8 and 10.65% respectively. For the quarter, the operating margins expanded 145 basis points sequentially. However, owing to volatility caused due to geopolitical environment, the other income was subdued in the quarter. We continue to be debt-free with sufficient availability of liquidity for the future. The Board of Directors has recommended a final dividend of 100%, that is INR 2 per share for the year ended 31st March 2026.
Our cranes, material handling, and construction equipment business recorded an income of over INR 2,946 crores in the last year. In this segment, FY 2026 was a year of normalization for the industry following exceptionally strong FY 2025, which also benefited from significant pre-buying ahead of emission norm transition. Industry demand during the first half of the year was impacted by emission norm transition, geopolitical situations, extended monsoon, and a slower project mobilization, leading to further moderation in demand. Encouragingly, the industry conditions improved progressively during the year, the demand momentum returned in Q4 FY2026, reinforcing our confidence in the medium-term outlook for the sector. For this division, we were able to maintain our expanded margin profile at 18.6% and recorded profit of INR 548 crores. The agri division registered a growth of 9%. Sorry.
Generated a revenue of around INR 251 crores with margin at 1%. Further, we are pleased to announce the finalization of a 50/50 joint venture between Action Construction Equipment Limited and Kato Works Co., Ltd., Japan, bringing together ACE's strong manufacturing and distribution capabilities with Kato's globally recognized leadership in heavy crane technology. The JV will serve as a dedicated platform for truck cranes, crawler cranes, and rough terrain crane businesses, strengthening our presence in the heavy crane segment. This partnership positions ACE to accelerate technology upgradation, deepen localization, expand export opportunities, and participate meaningfully in India's growing infrastructure and industrial CapEx cycling. Our strategic positioning in the core sectors of infrastructure, construction, manufacturing, logistics, and agri will provide necessary impetus to our growth ambitions. In the past year, we have successfully completed our capital expenditure as planned, expanding our capacities.
We have also enhanced our operational capabilities through modernization and automation initiatives aimed at strengthening our quality and capabilities while improving market competitiveness. Our blended capacity utilization for cranes, material handling, and construction equipment stands at around 60%, which provides us with enough headroom to capitalize on any immediate demand upticks in the future. On the macroeconomic front, the Indian economy continues to demonstrate resilience despite ongoing global uncertainties. We remain positive on the long-term outlook of the construction equipment industry, supported by sustained government emphasis on infrastructure creation, improving project execution, and rising investments across urban infrastructure and industrial sectors. At the same time, we remain mindful of the evolving geopolitical environment, which could lead to temporary supply chain disruptions and demand-side hyperinflation and input cost volatility.
Against this backdrop, we expect a steady start to the year and remain focused on delivering on our growth agenda. Steel, which is our biggest input material, remains volatile and at elevated levels. We will continue to look for all levers like savings, judicious and calibrated pricing actions whilst maintaining the right growth equation to protect and sustain our business model. Our focus remains on driving volume-led competitive growth with the right balance on pricing. We will continue to dynamically manage our EBITDA margins broadly in the existing range. We continue to closely monitor the inflationary environment, and our focus is to ensure the sustenance of our margin profile during the course of the year. We remain confident in the company's medium to long-term growth path.
Our strategic priorities remain unchanged, that is, driving operational excellence, improving cost efficiency, maintaining disciplined capital allocation, and investing in capabilities that enhance competitiveness and profitability. With a strong market position, a focused strategy, and continued execution discipline, we believe we are well positioned to create sustainable long-term value for our stakeholders. With this, I would now like to open the floor for the question-and-answer session. Thank you.
Thank you. We'll now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use a handset while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Mudit Bhandari from IIFL Capital. Please go ahead.
Hi, sir. Thank you for the question. Regarding our crawler cranes and truck cranes, there were discussions regarding implementation of AD and potential tapping of the market. What has been the status? Secondly, if we look at the other cranes like pick and carry and other products, has there been any price point change or capability of Chinese players, which are restricting them to enter, let’s say, pick and carry or any other cranes?
Your question is two, three-pronged. First is pick and carry cranes. The Chinese are really not doing pick and carry cranes, we do not have any competition as such in the pick and carry crane range, which is generally below 30, 35 tons capacity and is a pick and carry crane. What the Chinese are doing good is the slew cranes or the heavy cranes, which are, I would say, 40, 50 tons and bigger. They are different types of cranes. They are 360-degree slew and with outriggers. Wherein we had applied to DGTR with respect to the disabilities and the problems which the Indian industry is facing on price front or credit terms front, whatever these Chinese people are offering. The entire proceedings happened, everything happened. Last year in September, there was a DGTR order for anti-dumping duties.
Very unfortunately, for some good bad reason, it has not been notified by the Ministry of Finance. That is the situation as of date. Generally, it's a 90-day time bar. Ideally, within December, it should have been notified. Even we really do not know what is going to be the future fate of that anti-dumping order, wherein 25%-52% duties were put on Chinese manufacturers. Unfortunately, that order has not been implemented by the Finance Ministry.
Good, sir. Regarding the point that Chinese are not into pick and carry cranes, is any specific reason, like is there any capability which they don't have, or they are not able to meet our price point which we are able to supply or any other reason?
Just generally, basically the way how you are used to working within your countries or your territory. Chinese from day one, even for smaller cranes, less than I would say 40 tons, I would say let's say 10, 20, 30 tons, they have always been used to the concept of a truck-mounted slew crane. That is what they continue to use even today, and that is what they have mastered over the years, in the last 20, 30, 35 years. They really do not manufacture any pick and carry cranes. Pick and carry cranes are very popular and the mainstay of construction and lifting and shifting activity, even in the rural areas in our country. India, pick and carry cranes are very popular. Similar is the case in Australia, pick and carry cranes are very popular.
Even in Italy, pick and carry cranes are very popular. It is country specific. In China, they are used to slew cranes or truck cranes, 360 degree slew cranes. That's the main reason that they're not used to using pick and carry cranes, and that's why they don't manufacture pick and carry cranes.
Understood, sir. Regarding the geopolitical conditions and other things, is there any specific parameter of types of crane where the industry tracks, let's say, fuel price efficiency to check which product to be used or to be demanded further? Is there any such parameter or any of our customers or players use this type of thing which affects their decision?
Not really. See, the main parameter for using cranes and construction equipment is their capacity and capability. For cranes, it is in tonnage, and for other types of machines, it is more to do with the volume of aggregate material which they're handling. Fuel consumption with respect to which crane to use or which crane not to use is really not the criteria. It totally depends on the load which need to be handled.
Understood, sir. Just a bookkeeping question. How much percentage of our cranes would be, whoever customer is buying is financed, then how much would be approximately their own finances, not through any financial institution?
I think approximately about close to, I would say 85-90% of the cranes as well as construction equipment is generally financed through NBFCs and banks.
Got it, sir. All this would be the rental players or the EPC customers?
No, everybody. See, the entire market, which is split between rental as well as contractors. Most of them prefer to get it financed through NBFCs or the banks.
For our share of revenue, what percentage or any approx broad range would be rental customers and developer or EPC players?
I would say the ratio would be close to around 50/50%. Let's say approximately half or maybe a little over half are bought by rental players and balanced directly by end users, which are EPC players, as well as the manufacturing and the logistics industry per se. They also use a lot of pick and carry cranes for their lifting, shifting requirements. The engineering industry, manufacturing industry, logistics.
Understood, sir. Thank you. I have more question, I'll come up with the follow-up.
Yeah. Thank you.
Thank you. The next question is from the line of Nidhi Shah from ICICI Securities. Please go ahead. Mr. Nidhi Shah, please go ahead. Mr. Nidhi Shah, could you please unmute your line? Since there is no response from Mr. Nidhi Shah, the next question is from the line of [Akash Metalwala] from Nine Rivers Capital. Please go ahead.
Hi, am I audible?
Yes, please.
Hi. Comment on the guided numbers. My first question is that on the segment revenue, I see a line item mentioned others, which wasn't present in the previous quarters of the year, which is roughly INR 76.55 crore. Can you clarify what that segment other revenue is?
I think Mr. Luthra will take that question. If I'm not wrong, that is some miscellaneous exports and things which we send out of India. That is getting captured there because it has become significant. That's why I think we put it as a separate line item. Mr. Luthra, please.
Yeah, you are right that it is small, some export to a miscellaneous. That is as imported separately by the auditors.
I see. My second question is, in the financial report, can you clarify on the line item impairment losses on financial assets? What's the breakdown there and where it's coming from?
Basically, as a prudent accounting policy, we provide for expected credit losses. Depending on the receivables, as a prudent accounting policy, actually, this is not a real loss, but we have to provide, keeping in view any expectation or any risk going forward. This is the only provisions for payments which are slightly delayed.
Sorry. Those were my two questions. I will come back in the queue. Thank you.
Thank you. The next question is from the line of [Nil Shah] from [audio distortion] Investment Advisor. Please go ahead.
Hello.
Yes, please.
Yeah. Can you explain what the negative other income contains actually? I am not able to understand why the other income is negative.
I think it has more to do with mark-to-market losses with respect to the investments that we have made, the extra liquidity and the cash that we have. I think Mr. Luthra will explain.
Sir, you are right. Actually, we have investments because we have a surplus cash which has been invested. As a prudent accounting policy, we do a mark-to-market provisioning at the end of every month. This is a mark-to-market. As you're aware, the market was slightly on a negative side in the month of March, in the last quarter itself, which has resulted in mark-to-market provisional loss, not an actual real loss, which has been partly recovered in the month of April, as the market has slightly moved upward as compared to the March month.
Okay. what you mean to say is that in Q1, we can expect higher other income now that the loss has been reversed?
It really depends how the market behaves. If the market behaves good, definitely it will be recovered, definitely April month was slightly better as compared to March. Partially, we have recovered that losses, mark-to-market provisioning in the month of April. I'm hoping that if market remains static or has a slight improvement, we should expect a good number in this quarter.
Most probably, we should be hopeful that it should get back in the range of anywhere between INR 20 crore-INR 35 crore. Right, Luthra?
That's right.
I think it should be back on track within this quarter.
Okay. One more question. Since you have reported under other segments, in the segment revenue, can you also let me know the volume that pertains to this other segment, which means the volume that you exported, the miscellaneous exports?
The volume-
Because that will really help me.
To the best of my knowledge, I think Luthra can clarify. The volume will be very difficult to segregate because there were miscellaneous things that were exported out of the country, which we did. I don't think there is actually a volume number to it. It's more of a value number to it.
Yeah.
Fine. Okay. Can you please repeat? Did you say that there were cranes that were exported?
Some part of it was construction equipment, but I think generally it was miscellaneous items along with it. Some orders that were for division two.
Okay. Fine. Thank you.
Thank you. A reminder to all participants, please restrict yourself to 2 questions. The next question is from the line of Rochan Charan from Global Consilient Research. Please go ahead.
Sir, am I audible?
Yes.
Sir, my question was with regards to, does your existing clientele include any shipbuilding clients, sir? I am asking this question since there have been news of new clusters coming up. I just wanted to understand if you see any opportunity in this segment of customers.
Yes. We supply to more or less all the shipbuilding yards, whether in Goa, whether in other parts of the country. What I remember, recently, we supplied some three special tower cranes to even Garden Reach shipbuilding. Big tower cranes so that it can be used while building the ship, as well as placing material on the ship once it's ready. Other aggregate material which needs to be put on. We do work with all the shipbuilding yards, they require tower cranes, they require pick and carry cranes, they require everything.
Right, sir. With this expansion currently taking place, how much of your revenue do you expect to be contributed from these clients, sir, in the coming years?
Very difficult to put a number to it, but let's say out of the 700 odd tower cranes that we sell, so if 10, 15, 20 in a year, the bigger ones go to them. You can just put a number maybe around close to 1% or maybe less. Something similar I would imagine even for pick and carry crane.
Okay, sir. Thank you very much. That would be it.
Our market is very diversified. Wherever in the country there is any lifting, shifting, material movement required, whether it is infrastructure, whether it is construction, whether it is an industrial unit, engineering unit, or let's say, a shipbuilding unit, which I would call as an engineering unit, a big engineering unit. Wherever there is any lifting, shifting requirement of loads, their cranes are required of different types. Practically, we work with more or less everybody in the country who has a lifting, shifting requirement.
Understood, sir. Thank you very much.
Yes.
Thank you. The next question is from the line of Aditya, Old Bridge Mutual Fund. Please go ahead.
Hi. Thank you for the opportunity, sir, and congratulations on a good set of numbers. Sir, my first question is on tower cranes only. You said we did 700 units this year. What expectations should we keep for FY 2027 in terms of volume for tower crane, given the construction activity we have?
I think the tower cranes we did in the current year were slightly lower than 700. I think close to 680, 690, something like that. I think, obviously, the real estate market has been good in the recent past, and that is the trend that we are seeing. With respect to tower cranes, our order books are all full. Yes, it slows down a little in the monsoon season, but that happens every year. It has not happened so far. It starts to happen only by middle end of June. Hopefully, we should be looking at growth again in the tower crane segment. To put a number to it will be very difficult at this juncture because we have a capacity right now to do close to about 950-1,000 cranes.
We would definitely love that we are able to utilize it going forward. The overall sentiment, the economic scenario, how it is going to pan out, owing to the geopolitical uncertainty which is hanging around, and the imbalance in trade deficit, rupee depreciation, I do not know how the scenario pans out going forward, how positive it remains, or how neutral or on the other side it goes. We are reasonably confident that we should be doing more numbers than what we did last year.
Okay. Sure.
I can just give you Sorry, Aditya . I can just give you, let's say what's happening. See, we are nearly in the end of May, I would say. Nearly one and a half, two months have gone. The tower crane demand as of now is their full throttle, what I see. Even looking at our other products. We are looking at reasonable growth within quarter one itself, but that is quarter one, and things had started improving end of quarter three last year. Going forward, how the economic scenario pans out, how is the sentiment because, at the end of the day, all the machines that we make are capital goods.
We are first hit, last out, to be very frank with you. Traditionally, that is what has been. As of now, things are looking good. What happens in Q2, Q3, I think middle end of Q2 is a precise time we should be able to guide even on annual guidance. That's why we've also refrained from giving an annual guidance so far. We are looking at a good quarter. That I can tell you. Yes, there will be increase because of inflation with respect to our selling prices. That will add to revenue. That will happen. We will have some additional revenue coming in from defense because we have about a INR 575 crore order book pending in defense. That will happen. Some exports will also increase. To put a number to it at this juncture would not be prudent.
That's why we would like to wait till middle end of quarter two to put a number to it.
That's what my next question was leading pertaining to about defense. You have INR 575 crores of orders execution left, right? There, I think we have more visibility about the order execution, in terms of the deliveries. What kind of expectation should we have from that part?
Last year, there was a contribution of close to around 3% from default defense business in our overall revenue share. This year, we feel that it'll go up to anything between 5% and 6%, maybe slightly more, but yes, 5%, 6%. That should be upwards of INR 200 crores, INR 200, INR 220 crores, whatever it is, within this year. If we get a chance to execute more than that, we will definitely try to do it.
All right. Any kind of price increase or price hike expected in the upcoming quarters because of the cost inflation that we are seeing?
101%.
Yeah.
We've already increased our prices. I'll talk of the calendar year. In January, we took a 1 .5% general inflation price increase, and only on 1st of May, we again increased our prices by close to about 4%, maybe a little more. From 1st of June onwards, we are again pushing in a price increase of another 5%. This will bring the total to 9%-10%. I think looking at the overall cost increase, it could be anywhere between the range of 11%-14%.
11%-
11%-14%. We do not know where it will settle in the next one or two months, three months, because steel being the biggest contributor has increased by 20%, 22% from 1st January onwards. That is about 65% approximately of our cost. Let's say 20% of 65% means 12%. We will have to go to at least 12% price increase eventually. It could be slightly more than that.
Okay. Thank you. That's it from.
Thank you. The next question is from the line of Vedanta Bhadani from Canara Bank. Please go ahead.
Hello. Good evening. Am I audible?
Yes.
Sir, actually, I'm having two questions. The first question is regarding the non-current investment which we are doing. Like outflow of INR 831 crores of cash. Can you just throw some light on it? Why we are doing so much investments on like I've already seen that investments in some unlisted shares and debentures. Can you throw some light on it?
The extra surplus money which we are able to generate, we are putting it to use by investing it with respect to obviously not keeping it redundant. I think Mr. Luthra will be able to share more light on it. Luthra.
Sir, basically, the definition of non-current starts anything maturing after one year is considered as a non-current. As rightly said, we have been investing in surplus in some bonds, et cetera, where the maturity lies after one year. Most of my investment will be having a tenure of between one to 2 to 3 years only. That has been classified as non-current only. These are basically, although classified as non-current, but because of most of them are secured and listed and bonds, et cetera, the reality it can be sold in the market and can be converted into cash in a very short notice if required for any other use by the company.
What would be the amount, Mr. Luthra, in these non-current investments approximately, off the top? Non-current, sir, will be somewhere about. Basically, non-current is the accounting definition of non-current. Actually, it may not be non-current in practical, real sense. That I've understood that they're liquid, and they can be traded in the market or sold in the market. Just to get an idea. Sir, just give me a minute and I will let you know. I'm sure that was the next question of the gentleman. Yeah.
Okay. Okay, sir. The next question is regarding the anti-dumping.
How much, Mr. Luthra?
About INR 700 crores. About INR 500 crores.
Okay.
700 crores.
Understood. The next question is regarding the anti-dumping duty. Right now, all our competitors, earlier it was said that they are importing the high tonnage cranes kits to India and then they are selling it. Now, slowly and steadily, they are moving towards full-fledged manufacturing facility. With all these things happening, after this, how will this anti-dumping duty help us? Because now they are going to manufacture high tonnage cranes in India only. If applicable, how will this help us?
See, unfortunately, anti-dumping duties have not been implemented. Ideally, they should have been implemented within December. I really do not know the fate. As of now, it seems that because there is a 90-day bar, so I think it has become time-barred. There are government regulations and rules, and in the past it has been done after that also. I really do not know whether they will be put in place or not.
Yes, one or three of the manufacturers, out of the three main manufacturers or importers into India, Chinese company, because of the fear of anti-dumping duties coming in, they have started to at least assemble these machines in India, some of the models, and also trying to indigenize some of the components, which is definitely leading to a cost increase for them, which I understand very clearly because luckily I had a discussion with one of them three, four months back. Their costs are going to go up by 8%-10%, which will make us more competitive.
Their costs are going up because of trying to do local manufacturing, because earlier what they were doing, it was practically dumping off complete machines from China and at subsidized prices, whether being done by the company itself or eventually being subsidized by the government, which is a mystery to everybody who works with China. Yes, this will work in our favor eventually because their costs are going up by 8%-10%. That is what I understand.
Understood, sir. Thank you so much, sir. I will get back to the queue.
Yes.
Thank you. The next question is from the line of Nidhi Shah from ICICI Securities. Please go ahead.
Yeah. Am I audible this time around?
Yes, ma'am, you're audible.
Yes.
Yes. Apology for earlier. Thank you so much for taking my question. My question is that with the price increases that we have implemented and are going to implement, do you believe that there is enough appetite in the market in the cranes segment that we could see at least a 10% growth in crane volumes in FY 2027? Is that something that seems out of reach?
Nidhi Shah, to be very frank with you, I would not like to put a number to it at this juncture. As I mentioned, quarter one has been strong. Yes, even because the base in the quarter one last year was a little less. Because of the low base effect, we will be doing reasonably good, okay, in quarter one. Maybe we can even look at a growth of 15%-20%, or maybe slightly more, I don't know, within quarter one. Going forward, how it pans out, slightly difficult to answer at this juncture. In saying this, I would just like to say that last year when the new emission norms, BS-V/ CEV Stage V kicked in, there are two types of cranes mainly. One is the Hydra type, which is the old generation, and the new generation crane.
The old generation crane is primarily bought by retail hirers, used in a lot of industrial areas. They were very skeptical because those type of cranes were moving from Tier 3 straight to Tier 5 standard. For the first time, they were becoming electronic. They were scared of the technology, how they will be able to take care of it. Also the price increase there was the maximum between 12%-15%. That part of the market, let's say around 60% of the cranes, which are old generation cranes, that part of the market shrank in the last year because of skepticism or fear or whatever you say, which had come back on track in January, February. If that remains going forward, we should definitely, we can look at increase in crane numbers.
Looking at the current overall scenario, and let's say how the economy is going to pan out in the future, it is difficult to put a number to it. Yes, as a company, I think we should be able to grow because of the inflation giving us a 5%, 7%, 8% leverage in our revenue, additional 2%, 3% defense business giving us some leverage and certain other levers. We are definitely looking at growth in this year. To put a number to it, either in form of numbers or let's say in form of turnover or percentage, we would like to do that only in the second half of quarter two.
Thank you. My second question is on margins. Margins for the last three quarters have roughly been EBITDA margins ex other income has largely been in the 16% region for the last three quarters. Given the price increase that you have taken conversely with the increase in the material cost, do you believe that these margins will largely sustain, or can we see like a 50-60 basis reduction in the margin?
We are hopeful that we should be able to sustain our margin profile, EBITDA without other income, in the range of around 15%-16%. That is our primary target and aim, looking at what has happened in the last two, months with respect to commodity pricing and inflation. We will keep a very keen eye on this with respect to our costs wherever they're going up. Accordingly, we will take calibrated price actions wherever required to compensate for that. We are hopeful that we should be able to maintain our margins.
Thank you. Lastly, on the price increase, is the rest of the competitors within this segment also taking this proactive approach to pricing where they are updating prices regularly? My question mainly aims to get at, now, after all of these price hikes, is there a significant price difference between you and the competitors, or is largely the entire market in the crane segment running at similar prices?
See, the prices have been rising. That's what I've been given to believe from our sales department, that our competition has also increased their prices in the recent past. Because the input cost, whether it is steel, rubber, plastic, copper, oils, paints, or any other type of commodity that comes to your mind that goes into automotive type of product or engineering product, it has increased across the board for everybody. Our competition at segment level, I think they are at 8%-9% margin, whereas we are close to 18%-19% margin. I see no reason that if the input cost goes up by 12%, 13%, 14%, and if their company margin is at 8%-9%, that why they will not increase the cost unless and until they want to go into a 5%-6% minus type of scenario. So far, they have increased their costs.
That is what is our knowledge. Going forward, whether they increase or not is their prerogative, but we will definitely be increasing another 5% from 1st of June, and maybe we will have to follow it up by another 3%, 4% sometime later in quarter two.
All right. Thank you so much for taking my questions.
Yeah, thank you.
Thank you. The next question is from the line of Richa from Equitymaster. Please go ahead.
Sir, thank you for the opportunity. My question was related to this JV with Kato. Could you highlight what kind of opportunity can be seen in two to three years? What kind of revenue and margins are we targeting with this?
I would like to put it in two scenarios. Currently, where the anti-dumping duties have not been implemented. In the current scenario, I think in the next three to four years, we should be looking at a revenue of upwards of INR 300 crores from this joint venture. It could be slightly more, it could be slightly less. Yes, if the anti-dumping duties, and even in yesterday's newspaper, the main headlines in The Economic Times was, we should immediately curb non-essential imports. These machines are non-essential imports because if these machines can be made in India, why should India be importing them? If the government wakes up and the finance ministry puts anti-dumping duties, in that scenario, we could have looked at even upwards of INR 700 crores-INR 800 crores. Yes, currently I would say it is close to INR 300 crores.
Sir, currently, what would be the pricing difference between when it gets made in India versus when being imported?
Pricing difference with respect to the cost of the Chinese is slightly difficult to put it. Yes, it cannot be cheaper than what we are doing in India. If we talk of, let's say, the gross margin or the selling prices. What I can say is that the pricing at which the Chinese are selling needs to be at least higher by 25%-30% for them to make any money, because they have an additional barrier of 7.5% current custom duty. There is also the freight cost coming in from China. Now, even our currency has depreciated by more than 10%. Even in all this scenario, I think they're underselling by at least 25%-30%, if not more.
Okay. sir, could you also
Sorry. On top of that, they also offer a one-year, two-year credit period, which is again a 7%, 8% benefit per year for the customer.
Right. Sir, my next question is related to CapEx. Given everything that is happening on the macroeconomic front, although Q1 is doing well, you're also withholding guidance. What's the CapEx plan? What are the investment plans? Has there been any kind of change as compared to what it was last year?
In the current year, I think we will be spending close to around approximately INR 130-135 crores to complete the acquisition of a land parcel, which we have already contracted for about 1.5 Years back. That will happen for our land for future expansion. Apart from that, we are setting up a new plant within our existing complex, especially for the defense machines, defense equipment, and also for some new products, which we envisage that we should bring in in the next one or two years. That should be around INR 40-50 crores. Some maintenance CapEx, INR 20-25 crores put to it. I think including land, our CapEx for this year, should it all be put together, should be close to INR 200 crores.
We also intend to make a new tower crane factory where we envisage a CapEx of upwards of INR 400 crores. Currently we have capacity, so we will just wait and watch and wait for the momentum, and as soon as we see things, so maybe within this year, we'll start working on that. That is again, need-based.
Right. Sir, how much time does it take? Let's say we plan today to set up this factory for tower cranes. What kind of timeline-
For the tower crane factory, we will require at least, I would say 12-18 months, more towards 18 months, because it is going to be highly autonomous and robotic.
Okay. Thank you so much.
Thank you. The next question is from the line of [Akash Metalwala] from Nine Rivers Capital. Please go ahead.
Thank you for the opportunity. Is there any clarification on the defense NOC that was mentioned earlier, and has there been a reply from them?
Yes, we have got the required approvals from there, and if everything goes well regarding that big order of Rough Terrain Forklifts, actually a Telehandler. We should be starting execution in the next quarter.
Lovely. My second question is, last quarter you all had mentioned that you all have figured out something with respect to the JCB AGCO segment, and we should expect something in the future. Have we cracked that or is there any clarification there?
Yes, it is a work in progress. We have tasted some success. I think the proof of concept with respect to that should be there with us in June or July, and hopefully that will help us, aid us in increasing our numbers reasonably within this year itself, and then going forward, it should be much better. I think we are on track with that, yes.
Awesome. Thank you for your answers and good luck.
Yeah, thank you.
Thank you. The next question is from the line of [Ganesh Kupat] from [SS Family Office. Please go ahead.
Yeah, sir. Hello. My question would be on the guidance provided by you in Q2 FY 2026 for FY 2029 or FY 2030 of approximately around INR 6,000 crore-INR 6,200 crore. However, given the relatively muted industry environment currently, how do you expect us to the roadmap evolved originally versus any updates you would like to make now, and specifically which business segment would now expect to drive bulk of the incremental revenue?
Yes. The INR 6,000 crore-INR 6,200 crore by FY 2029 and worst case by FY 2030. If I am not wrong, that should have been our guidance.
Yes, sir.
Obviously, to do that, we need to add at least about INR 800,000 crore in revenue over the next three years, or maybe at the rate of INR 700-800 crore for the next four years. This year, really putting a number to the guidance will be difficult at the current juncture, but hopefully we should be able to do it in quarter two. Looking at a slightly medium to long term, we should be on track to attaining this INR 6,000 crore plus in FY 2029 or latest by FY 2030.
Sir-
Because there are certain other things.
Which segment will contribute mainly?
There are certain other things on the anvil which will also aid us in achieving this. Apart from, yes, in the last year, there was actually a drop in numbers of cranes and construction equipment, so they will also come back. In any case, the product mix and the price mix with respect to higher models has increased. Some inflation will also aid us and our increasing defense and export business, because last year combined, we did close to 9% for the first time, and our target is 10%-15%, more towards 15%, export and defense put together. Within this year itself, hopefully, we should be doing close to about 5%-6% revenue contribution from defense and about a 6%-7% from export. That will take us anywhere between 11%-13%.
With respect to within the cranes and construction equipment segment, even looking at our construction equipment part, we expect a decent growth within this year with all the endeavors and the things that have happened, coupled with exports, coupled with defense, coupled with some other initiatives which we have already started. I believe we are on track. Maybe a year here and there is maximum what we are looking at.
Sir, on follow-up on this, how does the potential for operating leverage look like on this guidance?
I'll be very frank and upfront, and I think I did answer a similar question in the last of the call before that. We are at 15%-16% EBITDA level, excluding other income, and about a 17%-18%, including other income. I believe that these are very healthy margins, and trying to expand our margins anything beyond this would be detrimental to our market shares eventually. I think we are reasonably satisfied at these margin percentages. Anything beyond this, we'll try to be more competitive.
Okay, sir. That's it from my side. Thank you and all the best for the future.
Yeah. Need lots of it in the current situation. Thank you.
Thank you.
Thank you. The next question is from the line of Jenil Bharad from Prudent Corporate Advisory. Please go ahead.
Hello. My question was regarding other expenses. In this year, our volumes have gone down by 18%-20% something, but our other expense has been flattish or has declined by close to 2%-3%. Can you throw some light on why it has not decreased materially?
Other expenses. Luthra, if you can take that question.
Other expenses
Mr. Luthra?
Yeah. Basically, if you look at the other expenses, most of the other expenses are not variable. They are of a fixed nature. That has got no direct relation with the revenue. That is the main reason for it.
Okay. My second question was regarding our realization per unit has decreased drastically in Q4 compared to what it was in nine months. How has the product mix changed, and how the demand is expected for each of the segment cranes, construction equipment, and material handling for next year, and how it has been in FY 2026?
The question is demand in FY26 and next year and price realization per machine. See, what is happening is definitely, especially within the crane segment, the market is moving more towards higher tonnages machines, whether it is the Hydra type of cranes or new generation type of cranes. That is the reason that realization per piece, you see there's an increase there. Apart from, obviously, cost increase also happening because of the emission transition, which we did last year. That also contributed, I think, 5%-7% to increase in cost per unit on an average blended basis. FY 2026, the demand was very tepid because of the emission norm change, especially quarter one quarter two. Second half of quarter three, things started to improve and quarter four was good. As a matter of fact, within quarter four, we could have done at least INR 40 crore-INR 50 crore more revenue.
Unfortunately, because of the war which started in the Middle East, some of our export shipments, which are still stuck with us and have not moved because they were meant for Middle East. Obviously, there was some moderation with respect to deliveries happening within the country in March. Some people become skeptical. That's what happened. Going forward, within this year, we feel that we should definitely be looking at a handsome growth with respect to especially backhoe loaders and construction equipment. Material handling, that is mainly forklifts and similar machines. Again, we should be looking at a reasonable growth in numbers. In cranes, because the Hydra Crane, which had lost sheen last year because people were skeptical because of the major technical change owing to the electronic engine. That has also come back in the last two, three months.
Hopefully, I think we should again see an increase in number of Hydra Cranes within the crane segment. Apart from increase in our market share in new generation cranes on account of special features, safety features, world-class advanced features, I would rather say, which are IoT enabled and AI enabled, which we have started giving in our cranes, along with our ACE Live app. All of this put together, I think we should be looking at increase in numbers within the crane segment also. Like I mentioned earlier in the call, the yearly guidance, we would like to give only sometime middle of quarter two.
Okay. no more questions from my side.
Thank you.
Thank you. The next question is from the line of Tushar Raghatate from Omega Portfolio Advisor. Please go ahead.
Yeah, thank you for the opportunity. Sir, I just wanted to know the guidance which you gave, like INR 6,000 crore-INR 7,000 crore for FY 2029 or 2030. Do that account the JV revenue in that?
Yes. Obviously, that will also contribute here.
Okay. In case if it's above INR 300, that would be a bonus, right?
Yeah, that will be a bonus. There is a possibility it can be above INR 300, yes.
Okay, fair enough. Sir, I could see that our average company realization per vehicle has reached to INR 25 lakhs-INR 28 lakhs, and the gross profit near about INR 8 lakhs-INR 9 lakhs. Post this high big size crane coming in, and you mentioned that the average ticket size is in INR crores. Do you see that the gross profit margin will increase going forward post the anti-dumping thing getting clear?
If the anti-dumping thing gets cleared, then definitely the margins will be better because currently they're practically nil margins on which we are working. Even if the anti-dumping does not distinguish, I think going forward, the margins, we would try that somewhere they are in line with our company's current margin profile. Especially to the machines which are going to get exported out of India. There, the margin profile will be much better.
Fair enough, sir. Sir, you mentioned that we'll be doing near about 200 this year and 400 for the tower crane, the CapEx, near about INR 600 crore. Considering the ROC of 30%-40% of your company, do you see that we'll be getting the same in the CapEx which you are doing?
Yes. See, the INR 200 crores is more or less certain that we will do in this year. The INR 400 crores, I really do not know whether it'll happen in this year or next year, because even if it starts to happen in this year, maybe INR 50 crores, INR 100 crores will go in this year, then the balance will go in the next year.
Sir, my question is for the FY 2028, 2029 perspective. Do you see that you'll be maintaining the ROC which you are currently working with?
Yes, definitely. That is one of also the main reasons why we will be doing it. That is why we are trying to time it so that we don't invest money before the actual demand arises. We will be timing it to perfection. In any case, our investment to turnover ratio is close to about 8x-10 x.
Got it, sir.
You can very well calculate that if we invest INR 400 crores, so we are looking at least eight times the revenue from there, or at least the capacity. That we will totally take care of ROC and ROE before doing any capital expenditure.
At least it won't dilute, right? That's my question.
If you see that in the last two years, our ROC from about 40% has gone down to I'll just open the page.
32%.
40%, it has gone down to 32%. This is on account that obviously the money is lying idle with us.
Yeah
In investments. That is why we are trying to put it to productive use so that this ROC can increase again. It is not our endeavor or intention so that the ROC goes below 30%-33%.
No, fair enough, Sir. on the defense side, any missile program, are you working with any some high-value product on defense? Any color on that? That, sir, would be helpful.
We have got a couple of orders. This is called QRSAM, Quick Response Surface-to-Air Missile. We are currently working on building protos for two different integration companies for the same program, who have been allotted to work on that. Which is going to have huge requirements in the next two, three years.
Yeah.
Tushar, here, I would just like to add that we are not into the firing systems. We are only into the logistics.
Sorry to interrupt, Mr. Tushar, sir. Could you please join the queue for more question?
No-
We'll just finish this one.
Yeah. I just wanted to clarify to that question that we are not into firing systems. We are only into the material handling requirement of the armed forces for the loading and the unloading of the ammunitions. We are nowhere involved in the firing mechanisms.
I think we'll take the next question.
Thank you. The next question is from the line of Puneet from Jhaveri and Company. Please go ahead.
Hi, sir, and thanks so much for the opportunity. I think you've answered a little bit on the joint venture with Kato, but is this a completely new product, the heavy cranes platform? Is this something that you were not present before, and you will be launching these new products, as you mentioned, some at least INR 250 crores or INR 300 crores of revenue that you're targeting? What's the competition like that currently in India for the heavy crane segment?
We are currently into truck cranes as well as crawler cranes, but up to limited tonnages. With Kato, we will be also making higher tonnages. The existing machines are going to be upgraded with the Japanese technology to make them world-class. That's why they'll also get sold in India as well as exported. There would be bigger crane models that will be developed and evolved within the joint venture. Thirdly, there would be some specific export models which will be made in India, which Kato will be distributing globally. That is where the main profitability will lie going ahead two, three years down the line, once we start doing the models which are meant only for export market, which are 100% identical to Kato Japan production. That is also one of the main aims here.
The competition currently remains the same three, four Chinese companies, which in the last 10, 15 years have made a very strong foothold within the Indian market because of the advantages and price leverage they were able to offer to customers, apart from extended credit terms of one to two years, even three years in some cases. That is our competition. Yes, with INR depreciating, with their own structures and costs within the country and subsidies reducing, and obviously with the premium attached to the Kato name and our pricing power, because customers are willing to pay a 15%-20% premium to a Japanese product. Going forward, I think we should be able to handle competition.
Sir, just in terms of, since you will be exporting a lot of this product as you mentioned as well, in the global markets, is it that the competition is more better in terms of pricing? Is it that the Chinese can impact that also? Is it more better market performance, which is not competitive on price and price reduction in that sense?
It's a huge market globally, much, much bigger than India market. The pricing of the Chinese in different countries, where they're competing primarily with the European and Japanese or American manufacturers directly, is more or less 50% to 150% higher than Indian pricing. I think it will be a very fair competition when Kato makes these cranes in India with us and takes them there. They should be able to sell at similar or higher prices than Chinese with a decent profitability. All those calculations and everything we have done. Another aspect of this JV which I would like to bring forth is that, as one of the side agreements, ACE will also be exporting a lot of material, components and whatever required by Kato Japan, because they don't only make cranes, they also make some other construction equipment like Excavators, et cetera.
They would like to outsource these components and things and materials and commodities from India, wherein ACE directly exclusively would be exporting this to that with Japan. That'll be an additional revenue stream going forward.
Got it, sir. Just in terms of, you gave some color that the guidance, of course, will be coming in quarter two and post that, point well taken. Just in terms of volumes, the cranes, construction equipment, and material handling last year was around 13,300, this year at 10,800. Even because this fall is the revenue has only fallen by 1%, and you spoke about the hike. Anytime the volume growth comes in, even if it's in the high single digit, can we expect revenue growth to be much, much higher than what the anticipation is?
I'm sure you can make the calculations. Yes, possible. That's a possibility. We are not banking on it because these are turbulent times. Our first focus is on sustaining profitability. Wherever possible in this scenario, again, trying to increase our market share. Plus, yes, if the market actually grows, which it should because last year the base was less. That will further add to the momentum. Yes.
Got it. Thank you so much, sir. Thank you for the opportunity, and wish you the best.
Thank you.
Thank you. The next question is from the line of [Rajat Ji] from Fortune. Please go ahead.
Yeah. Hello, sir. Good afternoon. We are basically market leaders having 60-odd% market share in mobile and tower cranes.
Would we be able to increase it by 5%, 10% this FY, considering the chaos that's occurring?
The question that you've just asked is a discussion we have been having internally. Yet, the current scenario of hyperinflation and we'll have to increase our pricing and all, I really do not know how easy it would be to increase market share. It is going to be very difficult, rather.
First of all, we have to hang on to the customers and make sure that we are able to get orders at a better pricing to compensate for the inflation effect. In saying this, yes, because of a lot of good things and features we have added in our cranes in the last six, eight months, there should be some impact, and we should be able to increase our market share to some extent. In the current scenario, very difficult to put a number to it again.
Sir, I was expecting that the smaller players must be struggling way more than us. That's why I was asking this.
Yes, all other players are smaller than us. Even our closest competitor is smaller than us, but obviously is a much bigger company with good numbers. Everybody is struggling in this scenario. Nobody knows what is happening, because nobody actually knows what is the actual inflation put together pricing that needs to be taken. Inflation is happening on the go, and there is generally a two, three-month lag, because some inventories are in process, some orders are in process, our supplier orders are in process. When exactly how much amount is going to hit? Yes, the ballpoint figure, like I mentioned earlier, is 11%-14% is the minimum increase that we will have to take to compensate for the inflation, or whether it is 12% eventually or 13%. I'm sure others are finding it difficult. More difficult, I'm sure.
Yes, sir. Chaos is a ladder, sir, we will come out stronger. Yeah.
Let's hope. We have climbed a lot of ladders in the past. We will also climb this one, I'm sure. Thanks.
Yeah. That's all from me, sir. Yeah. Thank you. All the best.
Thank you.
Thank you. The next question is from the line of [Ganesh Kupat] from SS Family Office. Please go ahead.
Hello once again, sir. Is it really safe to say from the past turbulent fiscal that the worst is really behind us?
Last year, yes, turbulence was because of emission norms, because of India-Pakistan geopolitical, Operation Sindoor, U.S. tariffs, extended monsoon. Right now, this year, we have entered with one of the most turbulent things for our country, which is crude oil price. There are different opinions, which I also get from some people. Somebody says $60 billion, $70 billion increase in oil bill will not affect a $3 trillion economy to that extent. It is being overhyped. The rupee depreciating is eventually going to help us be more competitive in the export market. All sudden then there is a war happening and a lot of crude oil going to different countries, coming to India alone is also, including LPG, is blocked. These are turbulent times, and really can't say how more turbulent it will get. It's anybody's guess.
I will have to become an astrologer to be very frank with you. Yes, we see some silver lining within this with respect to our endeavors of the past, whether it is the defense portfolio we are able to create or some part of the export portfolio we have been able to create. Luckily, the base last year got reduced, primarily because of the introduction of these CEV Stage V new emission norm machines and some segment of the customers were skeptical. We definitely expect to do slightly better, much better in the backhoe loader segment. tower cranes are holding up, the numbers will increase. It's anybody's guess. If there was a certain way to make it happen, we will try all that is possible to do it.
Most definitely, sir. Really appreciate the honesty. Thank you very much.
Yeah. Thank you.
Thank you. Ladies and gentlemen, we take this as the last question. I now hand the conference over to the management for the closing comments.
Yes. Like conveyed, we are in turbulent times, and a lot of turbulence has happened post this West Asia conflict. Inflation is increasing. Our rupee is depreciating. Business sentiment is getting affected. Maybe some consumer sentiment will get affected. But I'm sure as a company, we'll find ways and means, and our first priority going ahead is to maintain and sustain our margins, and then see how our numbers and our market share can increase further. And in saying all this, I can assure you that all our medium to long-term building blocks with respect to growth, innovation, automation, improvement, strategy, whatever can be thought of is in place, and all of us within our company are working hard on it. So I am hopeful we'll come out better out of this crisis, which our country is facing, and the whole world is facing.
Our country is facing it a little more because we import more than 80% of our crude. I'm sure things will be good going forward. Thank you.
Thank you, everyone.
Thank you.
Thank you. On behalf of 360 ONE Capital Market Private Limited, that concludes this conference. Thank you for joining us. You may now disconnect your line.