ACE Q2 FY27 Results: Heavy Cranes Move to ACE KATO as Stock Builds

Action Construction Equipment’s July-September numbers carry two things a crane or backhoe buyer should note before the busy season. ACE has now handed its heavy cranes business to ACE KATO, its 50:50 joint venture with Japan’s Kato Works. And the company is sitting on Rs 228 crore more stock than it held in March, while what dealers and customers owe it has gone down.

What ACE reported

The board approved the results on 12 November and ACE filed them with the exchanges the same evening. Autocar Professional reported the numbers the same day, and they tie to the company’s own results document. The notes say the heavy cranes undertaking went to ACE KATO on a slump sale basis during the quarter, under the shareholders’ agreement the two companies signed on 11 March 2026. ACE and Kato each hold half. Because the JV depends on both partners to operate, ACE accounts for it as a joint operation, so its share still shows up in ACE’s own results.

Leaving out the one-time gain, consolidated profit before tax came to Rs 166.90 crore, up 34.9 percent from Rs 123.69 crore.

What moved against last quarter

Revenue rose about 12.8 percent over April-June, a solid rise in a monsoon quarter for a company whose biggest product is the pick-and-carry crane. The more telling change is on the balance sheet. Inventory went up about 38 percent in six months, and trade receivables fell from Rs 287.34 crore to Rs 242.57 crore. On ACE’s own figures, finished goods and work in progress account for Rs 120.24 crore of the increase, a little over half. Operating cash flow for the half year was a negative Rs 5.46 crore, against a positive Rs 6.39 crore a year ago.

Put simply, ACE built machines ahead of demand rather than pushing them onto dealer credit. Our reading is that a maker holding this much stock going into the October-March site season will usually prefer selling to stacking. That can mean faster delivery on common crane and backhoe loader models, and more willingness to talk on price or finance near quarter-end. Our October FADA read already showed ACE’s wheeled retail running well ahead of the market. None of this is a company statement. It is what the balance sheet suggests.

For truck, crawler and rough-terrain crane buyers, the change is about paperwork. ACE KATO now runs that business. Before you sign for one, ask which company issues the invoice, who honours the warranty, and whether service still runs through the ACE branch network. The results note mentions only the heavy cranes undertaking. ACE’s pick-and-carry cranes, which make up most of its crane volume, are not part of it.

FAQ

Does ACE still sell heavy cranes?

The heavy cranes business now sits in ACE KATO, which ACE owns jointly with Kato Works. Confirm which company sells, invoices and services the crane before you place an order.

Why does ACE’s higher inventory matter to a buyer?

A maker carrying more finished machines than usual tends to deliver faster and may negotiate harder to move stock. That is our reading of the balance sheet, not a company statement.

Are pick-and-carry cranes part of the transfer?

The results note names only the heavy cranes undertaking. Pick-and-carry cranes, ACE’s main crane line, are not mentioned in it.

Related on DesiMachines: ACE KATO’s Rs 200 crore plan to build high-capacity cranes in India

Source: Autocar Professional