Ajax Engineering

Ajax Engineering reported a modest revenue growth of 1.4% to ₹2,103 crores in FY26, up from ₹2,074 crores in FY25. This was achieved despite significant industry headwinds^🌐, including slower government capital expenditure utilization (only 55% of the revised ₹10.96 lakh crores till December 2025) and payment delays in key states like Maharashtra, Karnataka, and Uttar Pradesh. The transition to CEV5 emission norms also increased production costs, leading to an FY26 EBITDA margin of 12.6%, a decline from 15.3% in FY25.

Q4 FY26 saw a strong turnaround, with revenue remaining flat at ₹758 crores (vs ₹756 crores in Q4 FY25) despite a 7% decline in SLCM volumes. Gross margins improved by 170 bps YoY to 25.8% (from 24.1% in Q4 FY25), and EBITDA grew 4% YoY to ₹115 crores, resulting in an EBITDA margin of 15.1% (up 40 bps YoY from 14.7% in Q4 FY25). This improvement was attributed to a 2% price increase taken in Q4, effective cost reduction initiatives, and a favorable product mix.

After a dip in market share to around 70% in Q1 FY26 due to competitor practices, Ajax Engineering successfully recovered its market share to 73.5% for the full year FY26, and further to 76% in April. This recovery was driven by the company's premium product quality, strong brand, and effective navigation of the CEV5 transition, being among the first to deploy CEV5 products. The company's SLCM volume degrowth was limited to 4%, significantly outperforming the estimated industry decline of 11%.

The company demonstrated strong operational resilience, with EBITDA to operating cash flow standing at a robust 142% in FY26. Net working capital was reduced to 21 days, marking the lowest level in the past five years, primarily due to inventory liquidation. This focus on efficiency and disciplined execution contributed to a strong cash balance of ₹1,121 crores as of March 2026, with management expecting to generate an additional ₹200-300 crores annually, potentially reaching ₹1,500 crores in the next couple of years.

Management identified India's infrastructure sector, including highways, logistics corridors, and rural development, as key growth drivers. Specific states like Gujarat (due to solar, industrial units, Commonwealth Games) and Uttar Pradesh (pre-election spending) are expected to drive demand. While Maharashtra, Karnataka, and MP faced payment delays, a turnaround is anticipated in Maharashtra in H2 FY27. The company aims for mid and early double-digit overall growth in FY27, with export revenue targeted to grow 20-25%.

With a strong cash balance, Ajax Engineering is exploring inorganic growth opportunities, adhering to strict criteria: avoiding turnaround businesses, aligning with ethical practices, shunning sunset sectors, and ensuring strong return metrics. While the concreting equipment segment has limited scope for external M&A, the company is open to M&A in other areas that offer quick traction and align with its core competencies in design, engineering, supply chain, and assembly. The company also actively encourages trade-in programs for older machines, leveraging their high resale value as a growth driver.