Action Construction shares have surged nearly 50% over the past six months. However, despite the stock’s sharp recent gains, ICICI Direct believes the rally still has further room to run.
On Tuesday, 22 September, the stock rose nearly 3% during the session to hit an intraday high of ₹1,262.90, looking set to extend gains for the seventh consecutive session.
As per BSE data, the stock has jumped 50% in the last six months, while year-to-date, the stock has gained 32%.
The stock hit a 521-week high of ₹1,267.05 on 21 September, while it hit a 52-week low of ₹746.10 on 30 March.
On a monthly scale, Action Construction share price is up nearly 12% so far in September and is on course to extend gains for the fourth consecutive month.
ICICI Direct says buy the stock, shares 12-month target price
The brokerage firm recommends a “buy” on Action Construction shares with a 12-month target price of ₹1,510, implying a nearly 23% upside potential from the stock’s 21 September close of ₹1,230.35 on the BSE.
ICICI expects Action Construction’s revenue and PAT to grow at 14.7% and 16.3% CAGR, respectively, over FY26-FY28E, citing the company’s strong leadership position in the mobile crane segment and sustained government infrastructure spending, which keeps it well placed to deliver healthy volume-led earnings growth.
ICICI underscored that after a period of subdued demand following the transition to construction equipment vehicle stage V emission norms, customer acceptance has improved, driving a recovery in demand for construction equipment.
ICICI said construction equipment volumes grew 17.2% YoY to 2,740 units in Q1FY27, while realisations increased 4.6% YoY to ₹27.1 lakh per unit, reflecting improving pricing power and a favourable product mix.
Moreover, while raw material costs have increased, the company’s management expects to sustain operating EBITDA margins above 15% through calibrated price increases, operational efficiencies, and product mix improvement, ICICI said.
The brokerage firm added that the company expects defence and exports to contribute 10–12% of FY27 revenue, supported by execution of a repeat defence order (more than ₹100 crore), commissioning of a dedicated defence manufacturing facility with nearly ₹500 crore revenue potential, and meaningful contribution from the KATO JV from FY28. This could provide incremental growth beyond the domestic construction equipment business, said ICICI Direct.
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Disclaimer: This article is for educational purposes only and does not constitute investment advice. The views and recommendations expressed are those of the broking firm, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
