According to BSE data, Action Construction shares have delivered impressive returns with a 50% gain over the past six months and 32% year-to-date growth. The stock reached a 521-week high of ₹1,267.05 on 21 September and hit a 52-week low of ₹746.10 on 30 March. 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. On a monthly scale, the stock is up nearly 12% so far in September and is on course to extend gains for the fourth consecutive month.
Despite the stock's sharp recent gains, ICICI Direct believes the rally still has further room to run. 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. As reported by ICICI Direct, the company 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.
ICICI Direct 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. According to the brokerage firm, 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. The company's management expects to sustain operating EBITDA margins above 15% through calibrated price increases, operational efficiencies, and product mix improvement.
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 diversification strategy could provide incremental growth beyond the domestic construction equipment business, as noted by ICICI Direct.
