Action Const.Eq. (ACE)
CyclicalFairStock Score: 69/100 — STEADY
Score breakdown: P/E: 1/3 · ROCE: 2/2 · Growth: 1/2 · Dividend: 0/1
Key Financials
| Current Price | ₹1,085.6 |
| Market Cap | ₹12,921.67 Cr |
| P/E Ratio | 29.59 |
| ROCE | 40.11% |
| ROE | 26.18% |
| Dividend Yield | 0.19% |
| Profit Growth | 22.47% |
| Debt/Equity | 0 |
| Sales Growth | 18.94% |
| Free Cash Flow | ₹29.62 Cr |
| Promoter Holding | 65.42% |
| 52-Week Range | ₹745.1 — ₹1,196 |
| Sector | Agricultural, Commercial & Construction Vehicles |
| Book Value | ₹168.99 |
Strengths
- Virtually debt-free with D/E of 0.01 and Altman Z-Score of 4.70
- Excellent return ratios: ROE 26.18% and ROCE 40.11%
- Strong promoter skin in the game at 65.42%
- Piotroski F-Score 7/9 points to solid overall financial health
Concerns
- Rich valuation: P/E 24.92, P/B 6.76, while sales growth is a meagre 0.31%
- Negative margin of safety: Graham Number ₹329.01 and DCF value ₹31.00 vs market price ₹917.25
- Low cash conversion: FCF ₹30 Cr is far below net profit ₹116 Cr
- Weak shareholder income: dividend yield just 0.23%
AI Analysis
At ₹917, Action Const.Eq. looks like a good business but not a good investment. The balance sheet is conservative: debt-equity is 0.01, Altman Z is 4.70, and Piotroski score is 7/9. Promoter holding at 65.42% also aligns ownership with minority shareholders. I admire the returns on capital—ROE of 26.18% and ROCE of 40.11% are far above what most companies earn. But Graham taught me to pay for value, not quality alone. Sales growth is only 0.31%, profit growth 8.65%, and the resulting PEG is 4.33. At a P/E of 24.92 and P/B of 6.76, I am being asked to pay a rich price for a very modest growth outlook. The Graham Number is ₹329.01, the DCF value is ₹31.00, and the margin of safety is deeply negative at -168.90%. Those numbers do not support ₹917.25. Free cash flow of ₹30 Cr is also far below net profit of ₹116 Cr, so earnings quality needs questioning. A dividend yield of 0.23% means I am not being compensated to wait. Construction vehicles are inherently cyclical, yet the market seems to be pricing this as a steady compounder while topline is flat. I would wait for a much better price, or for evidence that volume growth and cash conversion have genuinely improved. In investing, you do not need to swing at every pitch; this one does not offer enough margin of safety.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer