Multibagger Stock: This small cap stock rockets 18710% in 11 years, turns ₹1 lakh into ₹2 crore

Stock market investing is often seen as a journey of patience and strategy. Those who can spot potential in companies early on and hold onto their investments tend to be rewarded the most. Unlike the quick profits from short-term trading, long-term investors understand the value of sticking with companies that demonstrate strong fundamentals, growth prospects, and industry leadership.

In this context, Action Constructions Equipment (ACE) is such a stock in this lineup. It has rewarded its long-term shareholders with phenomenal returns by maintaining a steady upward trajectory with each passing year.

The company is India's leading material handling and construction equipment manufacturer, dominating the mobile and tower crane segments. Along with mobile cranes, the company offers a wide range of products, including tower cranes, electric cranes, crawler cranes, truck-mounted cranes, backhoe loaders, vibratory rollers, forklifts, warehousing equipment, and agricultural machinery like tractors and harvesters.

Wealth creation machine

Over the past five years, the company's shares have surged from ₹74 apiece to their current value of ₹1,398, delivering an extraordinary return of nearly 1,800 per cent. Looking even further back over the last eleven years, the stock has skyrocketed from ₹7.65 apiece to its present value, resulting in a phenomenal gain of 18,710 per cent.

To put this into perspective, if an investor had invested ₹1 lakh into the stock during this period, the investment would now be worth nearly ₹2 crore. What's more impressive is that in these 11 years, the stock only posted losses in two calendar years, with the rest yielding positive returns.

The standout years include CY17, with a remarkable gain of 219 per cent, and CY23, with a 173 per cent increase. In the current year alone, the stock has already risen 70 per cent, and in April, it crossed the ₹1,500 mark for the first time, hitting a new all-time high of ₹1,695 apiece.

Record-breaking performance in Q1

ACE achieved its best-ever first-quarter performance (April-June) in terms of revenue and margins. It demonstrated strong growth momentum, with operational revenue increasing by 12.82 per cent year-on-year (YoY). Additionally, EBITDA margins expanded by 212 basis points (bps) YoY, reaching 17.11 per cent.

This margin expansion was primarily driven by operating leverage, an improved product mix with better price realizations, and efficient cost control measures. ACE's cranes, construction equipment, and material handling volumes also saw significant growth of 20 per cent YoY, further contributing to the robust quarterly performance. The net profit for the quarter improved to ₹84 crore from ₹68 crore in the same period last year.

Meanwhile, the company is discussing with KATO Works, a Japanese global construction equipment manufacturer of mobile cranes and excavators, to establish a joint venture in India. 

The Joint Venture intends to produce medium—and large-sized cranes, mainly truck cranes, crawler cranes, and rough terrain cranes, for the growing Indian market. In the future, the JV also plans to utilize the technology cultivated by the expertise of ACE and KATO to introduce a wide range of value-added products for the export market.

Government initiatives driving construction equipment growth

The construction equipment industry in India is witnessing robust growth, driven by government initiatives such as the National Infrastructure Pipeline, the PM Gati Shakti Master Plan, and the "Make in India" campaign that prioritizes domestic manufacturing.

Looking forward, original equipment manufacturers (OEMs) are expected to invest between ₹1,400and1,500 crore in FY25. This investment will target debottlenecking, product development—including CEV-V compliant equipment and alternative fuel powertrains—and localization efforts. Ongoing projects under initiatives like the Pradhan Mantri Gram Sadak Yojana (PMGSY) are also boosting demand for construction equipment.

Moreover, the expansion of airports, railways, ports, and metro systems further underscores the construction market's growth potential, indicating a promising outlook for the industry.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.