ACE H1 income grows 20% as normalised margin hits 19.89%

ACE reported H1-FY27 total income of Rs 1,772.5 crore, up 20.0% year on year, while its normalised EBITDA margin rose 77 basis points to 19.89% despite elevated raw-material costs and operating expenses. Normalised earnings before interest, tax, depreciation and amortisation (EBITDA) increased 24.9% to Rs 352.5 crore.

What did ACE report for H1-FY27?

ACE reported consolidated total income of Rs 1,772.5 crore for H1-FY27, compared with Rs 1,476.8 crore in H1-FY26. The company attributed the 20.0% increase to an uptick in the domestic capital-expenditure cycle. Total income includes other income, while normalised EBITDA excludes exceptional items.

Total expenses increased 18.9% to Rs 1,420 crore in H1-FY27 from Rs 1,194.5 crore a year earlier, growing more slowly than total income. Normalised EBITDA therefore rose to Rs 352.5 crore from Rs 282.3 crore, and the normalised EBITDA margin increased from 19.12% to 19.89%.

Why did ACE's H1-FY27 margin increase despite higher costs?

ACE said the 77-basis-point expansion in its H1-FY27 normalised EBITDA margin was led by calibrated pricing to offset commodity-price inflation, a favourable product mix and deepening cost efficiencies. A basis point is one-hundredth of a percentage point, so the reported increase equalled 0.77 percentage points from H1-FY26's 19.12% margin.

The presentation identifies elevated raw-material costs and operating expenses as the cost backdrop but does not quantify either separately. The reported result was Rs 352.5 crore of normalised EBITDA on Rs 1,772.5 crore of total income, compared with Rs 282.3 crore on Rs 1,476.8 crore a year earlier.

Reported profit after tax (PAT) rose 51.1% to Rs 283.7 crore, faster than normalised EBITDA. PAT included a Rs 50 crore exceptional gain from a slump sale to ACE KATO Pvt. Ltd.; profit before exceptional item and tax increased 29.4% to Rs 325.3 crore, while reported PAT margin increased 329 basis points to 16.01%.

How did ACE's second quarter compare with the first quarter and last year?

ACE reported Q2-FY27 total income of Rs 932.2 crore, up 20.5% from Rs 773.6 crore in Q2-FY26 and 10.9% from Rs 840.3 crore in Q1-FY27. Q2 normalised EBITDA increased 30.2% year on year to Rs 180 crore from Rs 138.3 crore in the prior-year quarter.

The quarterly margin comparison differed by period. Q2-FY27 normalised EBITDA margin was 19.31%, up 143 basis points from 17.88% in Q2-FY26, but down 122 basis points from 20.53% in Q1-FY27. Q2 total expenses increased 12.6% sequentially to Rs 752.2 crore, compared with a 10.9% sequential increase in total income.

Q2-FY27 PAT was Rs 164.3 crore, up 82.4% year on year and 37.5% sequentially. The quarter included the Rs 50 crore exceptional gain, whereas Q1-FY27 did not record that item; finance cost was Rs 4 crore in Q2-FY27, compared with Rs 5.9 crore in Q2-FY26 and Rs 5 crore in Q1-FY27.

What do ACE's segment volumes show?

ACE's cranes, construction equipment and material-handling equipment segment sold 2,812 units in Q2-FY27. That was 19.8% above 2,348 units in Q2-FY26 and 2.6% higher than the 2,740 units sold in Q1-FY27.

Agricultural-equipment volume moved in the opposite direction, with 436 units sold in Q2-FY27 versus 526 units in Q2-FY26 and 440 units in Q1-FY27. The year-on-year decline was 17.1%, while the sequential decline was 0.9%; the presentation does not disclose segment revenue, pricing or margin data.

The presentation cites favourable product mix among the reasons for H1-FY27 margin expansion, but does not identify the products or segments involved. Its disclosed volume data show a 464-unit year-on-year increase in cranes, construction equipment and material handling, alongside a 90-unit decline in agricultural equipment.

How does ACE's H1-FY27 profitability compare with earlier years?

ACE's normalised EBITDA margin increased in each full year presented, rising from 16.06% in FY24 to 17.68% in FY25 and 18.11% in FY26, before reaching 19.89% in H1-FY27. The half-year result is not directly comparable with full-year figures, but it was 1.78 percentage points above the FY26 margin.

H1-FY27 PAT of Rs 283.7 crore equalled 68.3% of FY26 PAT of Rs 415.1 crore, although the half-year result included the Rs 50 crore slump-sale gain. The presentation reported annualised return on capital employed of 33.81% for H1-FY27, compared with 32.71% in FY26.

Inventories stood at Rs 832.2 crore at H1-FY27, up from Rs 605.4 crore at FY26, while current borrowings rose to Rs 143.9 crore from Rs 10 lakh. ACE reported net debt to equity of negative 0.60 times at H1-FY27, compared with negative 0.66 times at FY26.

Conclusion

ACE's H1-FY27 results show total income rising 20.0% to Rs 1,772.5 crore and normalised EBITDA increasing 24.9% to Rs 352.5 crore, producing a 19.89% margin. Management attributed the margin expansion to pricing, product mix and cost efficiencies, while the Rs 50 crore exceptional gain also lifted reported PAT to Rs 283.7 crore.

The next results will indicate whether Q2's 19.31% normalised margin, below Q1's 20.53%, persists and whether higher cranes, construction equipment and material-handling volumes continue alongside lower agricultural-equipment volume. Management expects growth momentum to continue, citing infrastructure investment in roads, railways, urban infrastructure, manufacturing and logistics as the disclosed structural backdrop.