Ajax Engineering

Ajax Engineering delivered a strong FY25, achieving a 19% year-on-year top-line growth to ₹2,074 crores. This growth was primarily driven by volume, with SLCM volumes increasing by 19% to 5,506 machines, enabling the company to maintain a dominant 75.1% market share. Gross margins expanded by 40 basis points to 27.1%, and Profit After Tax (PAT) grew by 15.5% to ₹260 crores, showcasing operational resilience despite a challenging external environment.

The company is actively scaling its non-SLCM segment, which also recorded an 18% revenue growth in FY25. Products like concrete pumps and boom pumps demonstrated impressive CAGRs of 57% and 18% respectively between FY22 and FY25. A new manufacturing facility at Adinarayanahosahalli is slated for commissioning by the end of Q2 FY26, focusing on pumps, lower-end SLCMs, spare parts, and potentially pavers and transit mixers, with revenue generation expected from H2 FY26.

The industry's transition to CEV-5 emission norms, effective July 1, 2025, has led to increased material costs. Ajax successfully launched its CEV-5 machines in Q4 FY25, which contributed nearly one-third of its Q4 sales. However, management anticipates a phased approach to price increases starting from Q2 FY26, acknowledging that fully passing on the increased costs will be challenging in the short to medium term due to high market competition, potentially impacting FY26 gross margins.

Management noted a sluggish pace in on-ground infrastructure project execution and a mid-single-digit volume growth for cement players, indicating a softer market. Consequently, H1 FY26 is expected to be softer due to these macro factors, the early monsoon, and the emission norm transition. Momentum is anticipated to pick up in H2 FY26, aligning with the company's historical trend of generating approximately 65% of its annual revenue in the second half of the fiscal year.

Ajax is augmenting its go-to-market strategy by establishing a B2B channel for non-SLCM products, complementing its existing dealer network. This hybrid model aims to address both hinterland requirements and large buying quantum from EPC and RMC companies in top 8 markets. The company maintains a strong service commitment with an internal 6-8-24 hour response practice, achieving over 85% consistency in reaching, diagnosing, and repairing machines on-site.

The company maintains a strong financial position, remaining debt-free with a robust cash and liquid investments balance of ₹690 crores. While net working capital days increased from 24 in FY24 to 30 in FY25, and DSO from 17 to 22+ days, management attributes this to sales timing and expects no secular increase. The M&A strategy is disciplined, focusing on high-growth segments, strong governance, and avoiding turnaround situations, ensuring fiscal prudence in capital allocation.