We acted well in time to increase our capacity

01 Aug 2018 Editorial Team

With a consolidated presence in all major infrastructure, construction, heavy engineering and industrial projects across the country, Action Construction Equipment (ACE) is now making headway into the earthmoving and road machinery segments. Its equipment has been successfully used across infrastructure and building construction, power, ports and shipyards, dams, metro rail, roads, mining, steel, engineering, railways, cement, petroleum, defence, chemicals and fertilisers, warehousing, logistics, to name a few. Pradeep Sharma, President, Action Construction Equipment, shares more...

Highlight one major challenge faced in FY2017-18.
In 2017-18, we witnessed about 30 per cent growth in construction equipment demand across the country. To meet the surge in demand from customers and maintain our market share in such trying times is our biggest challenge. All the departments, from supply chain to production and marketing, have successfully delivered in such times. A well-established sales and service network has helped us.

What decision do you consider the biggest contributor to the company's growth in FY17-18?
Undoubtedly, the government's push for infrastructure, especially in the subsequent Budget, with a focus on roads, railways and irrigation, helped us increase our numbers. And, a greater push on safety induced sales of our next-gen cranes to an all-time high numbers. Infrastructure segments such as roads, railways, ports and real estate, where earthmoving construction activity dominates, are the main catalysts for our equipment. Similarly, increased focus by the government on rural development is helping our industry immensely.

Please share a decision you avoided, which could have otherwise impacted the company's top-line and bottom-line.
We acted well in time to increase our capacity by strengthening our supply chain, vendor capacities and our own manufacturing capacity, while we did not have to do much in terms of capex. But to put in place the required skilled manpower in time is the biggest challenge.

Particulars	Net sales	Adjusted PBDIT	Reported PAT
FY2018 (Rs billon)	10.86	1.00	0.53
Growth over FY 2017 (in%)	44.63	113.00	264

This helps us keep the delivery schedule of our products in check. By meeting the demand-supply requirement in balance, we could manage to keep our market share intact.

What are your plans for the company's growth in FY18-19?
We expect a revenue growth of over 25 per cent and are fully geared up with a wide range of products to cater to customer requirements. Overall, we are only at about 40-60 per cent of installed capacities. With the market turning around, we hope to be at 80 per cent capacity utilisation in the coming years.

This will help us increase our revenues exponentially without much capex. Also, ACE continuously develops and introduces new product lines in the market as per the demand on a yearly basis. In 2018-19, we were able to establish our backhoe and road equipment and we expect these two products to contribute significantly to our growth in the coming years.