Ajax Engineering Limited — Q3 FY26 earnings call

Call held 13 Feb 2026

Management summary

Ajax Engineering reported a challenging Q3 FY26 with revenue and EBITDA margin decline, primarily due to external headwinds, customer cash flow constraints, and product mix changes. Despite this, the company maintained strong financial discipline and saw positive demand momentum in January. Strategic initiatives like the launch of CEV-5 machines and expansion of the dealer network are underway, with a new manufacturing facility expected by Q1 FY27.

Highlights

  • Modest revenue growth of 2% YoY for 9 months FY26, reaching ₹1,345 crores.

  • Non-SLCM revenue grew by 4.5% YoY for 9 months FY26 and 13% YoY for Q3 FY26.

  • Spares and services revenue grew by 14% YoY for 9 months FY26 and 11% YoY for Q3 FY26.

  • Strong financial discipline and efficient capital allocation maintained, with healthy cash balance of ₹810 crores.

  • Positive demand momentum observed in January, expected to continue in February and March 2026.

Concerns

  • Q3 FY26 revenue declined to ₹434 crores from ₹548 crores in Q3 FY25.

  • EBITDA margin for Q3 FY26 declined by 510 basis points to 11% YoY.

  • Impact on EBITDA due to increased cost of production and product mix change (absence of high-margin slip form pavers).

  • Cash flow constraints faced by customers, particularly from state governments, affecting purchasing decisions and work order acceptance.

  • New manufacturing facility commissioning delayed to Q1 FY27 due to tactical decisions.

Key financials

2 periods

Q3 FY26

  • Revenue
    ₹434 Cr
    YoY -20.9%
  • EBITDA
    ₹48 Cr
    YoY -45.5%
  • EBITDA Margin
    11%

9M FY26

  • Revenue
    ₹1,345 Cr
    YoY +2%
  • EBITDA
    ₹154 Cr
    YoY -25.6%
  • EBITDA Margin
    11.5%

What they filed

Q1 FY27: revenue up 1.7%, net profit up 5.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue301 548 756 467 445 +48%434 −21%758 +0%475 +2%
EBITDA39 88 111 61 45 +15%44 −50%115 +4%59 −3%
Net profit34 68 91 53 39 +15%38 −44%95 +4%56 +6%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

SegmentNon-SLCM Revenue GrowthSpares and Services Revenue Growth
9M FY264.5%14%
Q3 FY2613%11%

Order book

medium confidence

Cancellations & deferrals

  • deferred: Delay in acceptance of work orders due to cash flow challenges in some states.
  • deferred: Cash flow constraints faced by our customers have further influenced their purchasing decisions, thereby affecting demand and overall business performance.
Management noted that cash flow challenges in some states are delaying work order acceptance, impacting sales momentum.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed
    • New manufacturing facility
    Despite the impact on profitability and the ongoing capex on a new manufacturing facility, we continue to maintain strong financial discipline and efficient capital allocation.
  • Liquidity Cash ₹810 Cr Healthy cash balance including investments in debt markets.
    Cash balance is including let's say the investments which we have in the debt markets is INR 810 crores.

Guidance & targets

Profitability

  • Price Adjustments Profitability · FY27 · Medium confidence Aid profitability
    Along with the operating leverage coming from the volume growth, we also anticipate some price adjustments, which will further aid the profitability from FY '27.

    — Shubhabrata Saha

Manufacturing Capacity

  • Fifth Manufacturing Facility Commissioning Manufacturing Capacity · Q1 FY27 · High confidence Commissioned

    Previously H2 FY26 → Commissioned

    In line with that, we believe it is prudent to commission our fifth manufacturing facility in Q1 of FY '27.

    — Shubhabrata Saha

Sales Volume

  • UDAAN Sales Sales Volume · Current year (FY26) · High confidence 225 to 250 numbers
    By the end of this year, I think we would have done close to about 225 to 250 numbers.

    — Shubhabrata Saha

Market Share

  • Market Share Maintenance Market Share · For the quarter · High confidence Maintain market share
    And I think it's important that we sustain that momentum with grit and determination around this aspect, while ensuring that we maintain our market share at least for the quarter.

    — Shubhabrata Saha

Pricing

  • Price Increase Coverage Pricing · Q1 FY27 · Medium confidence Cover fair ground on price increase
    And I stand confident that FY '27, I think we should be able to have covered a fair ground as far as price increase is concerned. I wouldn't use the term whether it will be exactly commensurate with the overall cost increase, but as close as we can get to that sometime in the first quarter of FY '27.

    — Shubhabrata Saha

Dealer Network

  • Number of Dealerships Dealer Network · Next step up · Medium confidence Increase by about 15

    From Upward of 60 today

    overall, we're looking to increase in the range of about 15 dealerships, additional dealerships as we progress. We are already upward of 60 now, and that should get a bit better, or let's say a bit more in the next step up.

    — Tuhin Basu

What to watch in Q4 FY26

Fifth Manufacturing Facility Commissioning

Q1 FY27
Current Delayed to Q1 FY27
Target Commercial operations commenced

Why it matters

Timely commissioning is crucial for capacity expansion and supporting non-SLCM portfolio growth.

In line with that, we believe it is prudent to commission our fifth manufacturing facility in Q1 of FY '27.

Risks & concerns

  • Customer Cash Flow Constraints and Work Order Deferrals

    high

    Cash flow constraints, particularly from state governments, led to delayed acceptance of work orders and influenced purchasing decisions.

    Management acknowledged

  • External Headwinds and Operational Momentum Impact

    medium

    Prolonged monsoon, emission norm changes, and slower project execution created headwinds, impacting operational momentum.

    Management acknowledged

  • Product Mix Change Impact on Gross Margin

    medium

    Absence of high-ticket, higher-margin slip form pavers this year, combined with increased production costs, negatively impacted gross margins.

    Management acknowledged

  • Industry Cyclicality and Uncertainty

    medium

    The industry is cyclical, and the company operates in a world where it's difficult to predict future events, requiring adaptability.

    Management acknowledged

  • Competition and Pricing Pressure

    medium

    While the company aims to maintain pricing, there is pressure from competition and discounting in the market, though 'crazy discounts' have stabilized.

    Management acknowledged

Q&A highlights

6 direct
SLCM growth trajectory from FY27 Partial
I think we are witnessing certain demand drivers in specific states for the moment and there are certain states where there is likely to be pent-up demand because there is current existing demand challenges.

Analyst inquired about returning to 15-18% SLCM growth, and management provided a nuanced view on state-specific demand drivers and challenges rather than a direct confirmation.

Asked by Raghunandhan

Pricing environment and price hikes Direct
I think that is something that the organization has done to make sure that it stays on course at this stage. I think if you look at it, there are select customers given the lower volume opportunity right now because as I mentioned some of the larger states of Karnataka, Maharashtra Maharashtra was the number one state up until last year, Telangana, Rajasthan and MP have been muted and only a certain set of states are driving the volume.

Analyst asked about the ability to take price hikes, and management indicated confidence in holding prices and improving from January, linking it to market share and customer preference.

Asked by Raghunandhan

UDAAN product differentiation and applications Direct
And this particular product, I think by way of the design, by way of the performance, by way of its resilience and the width of applicability, is I think drawing some degree of customer interest, because I think we've been slow to position it across all states. But I can say this that where has it gone into right now, I think it has gone into wide range of lower-end applications wherein probably none of our Argos would potentially go.

Analyst sought clarity on the new UDAAN product, and management detailed its design, performance, and specific lower-end applications like brick making, precast walling, and CC roads in Gram Panchayats.

Asked by Vaibhav Shah

Full-year SLCM volume target for FY26 Direct
While we do see some improved momentum coming in into JFM of the final quarter of this year, I don't think we would be in a position to match up to the absolute number of 2,000 that happened last year.

Analyst asked about the full-year SLCM volume, and management indicated that despite improved momentum, matching last year's high Q4 base of 2,000 units is unlikely.

Asked by Vaibhav Shah

Cash balance Direct
Cash balance is including let's say the investments which we have in the debt markets is INR 810 crores.

Analyst asked for the current cash balance, and management provided a specific figure of INR 810 crores, indicating strong liquidity.

Asked by Raashi

Discounting, dealer footprint, and EXCON success Direct
I will take the last question first because we met each other at EXCON, Laxmi, and thank you for coming by and taking your time out to see our stall. I would have loved to have some feedback about the subject from you to begin with, but I can say this that we participated in the EXCON after a hiatus of the previous EXCON. And I can say this with the degree of confidence that I think for us, I think it was a reasonable success. All the products that were, let's say displayed from a domestic standpoint were all booked and have been supplied.

Analyst inquired about discounting, dealer network expansion, and the success of EXCON. Management confirmed EXCON success with all displayed products being booked and supplied, and discussed calibrated pricing and dealer network expansion plans.

Asked by Lakshminarayanan

New manufacturing facility delay Direct
I mean, there is no, let's say, operational delay. It's just tactical decisions. That was predominantly for the non-SLCM portfolio. We are seeing what is the right calibration, and it's a delay of few months, if at all we call it a delay. So nothing which is alarming or which needs to be thought through too much either on your side or ours. It's just a tactical decision-making, that's all.

Analyst questioned the delay in commissioning the new facility. Management clarified it's due to tactical decisions for the non-SLCM portfolio, not operational issues, and is a minor delay.

Asked by Vinil Shah

2 min read 6 chapters

Detailed narrative

Q3 & 9M FY26 Financial Performance Overview

Ajax Engineering reported a modest 2% YoY revenue growth for the first nine months of FY26, reaching ₹1,345 crores. However, Q3 FY26 saw a revenue decline to ₹434 crores from ₹548 crores in Q3 FY25. EBITDA for 9M FY26 stood at ₹154 crores (down from ₹207 crores in 9M FY25), resulting in an EBITDA margin of 11.5%. Q3 FY26 EBITDA was ₹48 crores, with its margin contracting by 510 basis points to 11% YoY, primarily due to increased production costs and an unfavorable product mix.

External Headwinds and Operational Response

The company faced several external challenges, including prolonged monsoon conditions, changes in emission norms, and a slower pace of project execution across key markets. These factors, coupled with cash flow constraints experienced by customers, particularly from state governments, impacted purchasing decisions and operational momentum. Ajax responded by focusing on resilience, introducing new CEV-5 machines, and expanding its dealer network to deepen market penetration.

Product Strategy and UDAAN Performance

Ajax launched its new CEV-5 machines in Q4 FY25, with a calibrated approach to evaluate real-time performance and gather customer feedback. The new 0.75 cubic meter UDAAN product is gaining customer interest in lower-end applications like brick making, precast walling, and CC roads in Gram Panchayats. The company anticipates selling 225 to 250 UDAAN units by the end of the current fiscal year, with testing underway for a pumping solution to expand its application.

Pricing Strategy and Market Dynamics

The company maintains a calibrated pricing strategy, aiming to sustain market share while anticipating price adjustments from FY27 to aid profitability. Despite some pricing pressure from competitors, Ajax believes its market share (ranging 78-82% in recent months) indicates product preference. Management expects to cover a 'fair ground' on price increases by Q1 FY27, aiming to offset cost increases.

Infrastructure Outlook and Demand Drivers

India's continued focus on infrastructure development, reflected in an 11% increase in budget allocation for government capital expenditure to ₹12.2 lakh crores for FY27, is expected to stimulate demand. Key end-use sectors like railways, roads, and real estate have received higher budgetary allocations. While some states (Gujarat, Rajasthan, Odisha, Uttar Pradesh, CG) are driving demand, others (Karnataka, Maharashtra, Telangana, MP) face cash flow challenges, which management expects to resolve, leading to renewed work order acceptance.

Capital Allocation and New Facility Update

Ajax Engineering continues to maintain strong financial discipline and a robust cash position, with a cash balance of ₹810 crores, including investments in debt markets. The commissioning of its fifth manufacturing facility, initially targeted for H2 FY26, has been tactically delayed to Q1 FY27. This delay is attributed to strategic decisions for the non-SLCM portfolio rather than operational issues, ensuring the right calibration for future growth.

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