Event Participants
Executives
2 Ketan Pendse, Shubhabrata Saha
Analysts
9 Aditya Shroff, CA Garvit Goyal, Parth Thakkar, Prolin Nandu, Raghunandhan NL, Rahul Kumar, Raashi Chopra, Sanyam Shah, Shubham Borade
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Total Revenue | ₹475 crores | +1.7% YoY; flat volume environment with favorable product mix and Q4 FY26 price hike benefits |
| SLCM Revenue | ₹388 crores | Marginal YoY growth; lower volumes offset by price increase and product mix |
| Non-SLCM Revenue | ₹48 crores | +6.4% YoY; led by healthy concrete pump growth, partially offset by June rainfall delays |
| Spares & Services Revenue | ₹39 crores | +6.2% YoY; focus on expanding AMC share of growing installed base |
| EBITDA | ₹59 crores | Down from ₹61 crores YoY; margin 12.5%, -70 bps YoY on adverse operating leverage |
| PAT | ₹55.6 crores | +5% YoY despite lower EBITDA; tax/other income support |
| SLCM Retail Market Share | 75.1% | Up from ~69% Q1 FY26 and 73.5% FY26 full year; achieved despite price premium over peers |
| Cash Balance | ₹1,100+ crores | As of June 2026; available for inorganic opportunities |
| Export Share of Revenue | 9% | Includes third slip-form paver export; Algeria, Morocco, Nigeria ~38% of shipments |
| SLCM Volumes (Non-SLCM) | 129 machines | vs 153 in Q1 FY26 (-16%); June rainfall shifted some deliveries to Aug-Sep |
| Industry Registrations | -27% YoY | Ajax down 21% YoY, gaining ~+6pp market share during industry decline |
Geographic & Segment Commentary
SLCM (Self-Loading Concrete Mixer): Industry registrations fell 27% YoY in Q1 while Ajax declined only 21%, driving market share to 75.1% from ~69% a year ago. States like Gujarat (+40% volumes), Karnataka, and Odisha (+13%) showed strong traction, while Maharashtra volumes collapsed from ~950 to ~430-440 range over two years and MP declined ~50%. Roads remain the largest application at 40-43%, but urban infrastructure and building work has grown from 15-20% to 35-40% of the mix, offsetting muted government spending.
Non-SLCM (Pumps, Batching Plants): Revenue grew 6.4% YoY to ~₹48 crores with 129 machines sold vs 153 in Q1 FY26; June rainfall delayed some shipments to Q2. Management targets 10-15% full-year growth on the low base. New customer wins with UltraTech, JSW, ACC, and J. Kumar through the B2B channel initiative are expected to convert to meaningful orders over the next 2-3 quarters, with dealers increasingly participating in non-SLCM distribution.
Exports: 9% of Q1 revenue, boosted by the third slip-form paver export. Algeria, Morocco, and Nigeria account for ~38% of shipments, with repeat buying and some price increases achieved. SLCM-to-non-SLCM mix is 65:35 in export shipments. Management guided to 30%+ CAGR over the next three years driven by distribution arrangements and pavers, while remaining prudent on country and currency risk.
Spares & Services: Grew 6.2% YoY to ₹39 crores. Management sees significant headroom by increasing AMC penetration across the growing installed base, with initiatives to raise share of spares and services business underway.
Company-Specific & Strategic Commentary
Product Portfolio Expansion: UDAAN Series sold 121 units in Q1 (vs 202 units in all of FY26), with June-July adding 35-40 more; market activation via demos and customer meets continues. The new ARGO 4000 fills a portfolio gap and is planned for Q2 FY27 launch, strengthening the product-ladder strategy.
Pricing & Cost Management: A ~2% price increase taken in Q4 FY26 is being followed by another calibrated hike planned within Q2, timed to market conditions. Direct material costs are rising on fuel and steel; strategic inventory built for certain imported components, while design-engineering and supply chain cost initiatives have been accelerated to mitigate impact.
Organizational Alignment: All manufacturing brought under a single leader; Obadenahalli plant head now oversees procurement and supply chain, while services and spares aligned with strategy and product planning. SAP ECC 6.0 to SAP HANA migration underway, costing ₹16 million in Q1.
Inorganic Pursuits: Cash balance above ₹1,100 crores provides flexibility; management confirmed actively pursuing inorganic opportunities with clear guardrails on returns and fit, without providing specifics or timeline.
Market Share Discipline: Despite industry headwinds, Ajax gained market share in nearly all key states including Maharashtra, MP, Gujarat (71%→82%), Rajasthan (66%→86%), Odisha (61%→88%), and Chandigarh (73%→91%), reinforcing the premium-priced brand positioning.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Q2 FY27 EBITDA Margin | 12-12.5% challenging | Expected seasonally soft quarter with input cost pressure; calibrated price hikes and cost optimization to partially offset |
| FY27 Revenue Split | ~60% in H2 | Business seasonality (40:60 H1:H2); H2 expected to benefit from improved government spending, monsoon outcome, UP election, and state-level traction in Gujarat, Odisha, Karnataka, AP |
| Non-SLCM Growth (FY27) | 10-15% YoY | Low base, concrete pump momentum, B2B channel wins; H2 expected stronger than H1 |
| Exports CAGR (3 years) | 30%+ p.a. | Driven by distribution arrangements, SLCM repeat buying in Algeria/Morocco/Nigeria, additional paver sales; prudent on country/currency risk |
| Long-Term EBITDA Margin | 13-15% corridor | Achievable when demand recovers; Q4 FY26 demonstrated ~15% capability on volume upswing |
| New Product Launch | ARGO 4000 in Q2 FY27 | Fills portfolio gap; strengthens value proposition and competitive positioning |
Risks & Constraints
| Risk | Context |
|---|---|
| Government Infrastructure Spending Shortfall | Actual spending remains well below budgeted allocations for over a year, slowing project execution across India and dampening contractor order appetite. Management expects improvement in H2 FY27 but cannot quantify timing or magnitude. |
| State Government Payment Delays | Contractors face cash flow constraints from delayed payments in specific states (notably Maharashtra, MP), reducing fresh equipment investment. This has been a two-year issue, with Maharashtra volumes declining from ~950 to ~430-440 annualized. |
| Input Cost Inflation | Direct material costs rising on steel (E250/E350) and fuel in late Q1; geopolitical environment may keep commodity prices elevated through calendar 2026. Management has accelerated cost initiatives and is evaluating a second price hike. |
| Q2 Margin Pressure | Management explicitly flagged 12-12.5% EBITDA margin as challenging for Q2, due to seasonal softness and cost pressures; full-year margin outcome uncertain if steel prices don't soften. |
| Competitive Share Loss in Pick & Carry Segment | Listed peers ACE and Escorts grew volumes ~17% in P&C cranes, a segment Ajax does not participate in, creating optical pressure on relative growth comparisons. |
Q&A Highlights
State-wise Demand and Market Share
- Question: How do you see demand improvement in Gujarat, UP, Rajasthan, Odisha, Andhra on a full-year basis? (Raghunandhan NL, Nuvama)
- Answer: Market share improved across nearly all top states despite industry decline of 27% and Ajax decline of 21%. Gujarat volumes +40% with share 71%→82%; Rajasthan share 66%→86% on -21% volumes; Odisha share 61%→88%; Karnataka ~85%, MP ~80%. Growth expected in Gujarat, Odisha, AP, Karnataka; Maharashtra and MP likely to remain muted near-term. Application mix shifting to urban infra and buildings (35-40% combined), offsetting weak roads/govt irrigation. (Shubhabrata Saha)
Non-SLCM Growth Trajectory
- Question: What growth should we target for non-SLCM, given it's meant to diversify SLCM cyclicality? (Prolin Nandu, Edelweiss)
- Answer: Management rejected the framing of non-SLCM as an offset to SLCM; it's incremental diversification. Target is 10-15% growth for FY27 on the low base, with H2 stronger than H1. New customer wins (UltraTech, JSW, ACC, J. Kumar) and dealer participation will drive conversion over next 2-3 quarters. Q1 volumes were 129 machines vs 153, impacted by June rainfall. (Shubhabrata Saha)
FY27 Volume Outlook
- Question: Given flat SLCM volumes and seasonally soft Q2, what's the full-year volume expectation? (Parth Thakkar, JM Financial)
- Answer: Too early to call full-year volumes; H1:H2 revenue split is ~40:60. H2 should be better on government spending recovery, UP election, monsoon outcomes, and strong state performance in Gujarat, Karnataka, Odisha, AP. Margin will be supported by market share protection and cost initiatives, but 12-12.5% is challenging for Q2. (Shubhabrata Saha)
UDAAN Product Ramp
- Question: How is UDAAN traction and what are volumes? (Parth Thakkar, JM Financial)
- Answer: UDAAN sold 121 units in Q1 (vs 202 units in all of FY26), with another 35-40 units in June-July. Traction is reasonable given the environment; demos, customer meets, and distribution expansion will continue to drive acceptance. (Shubhabrata Saha)
Inorganic Opportunities
- Question: Are you aggressively chasing inorganic opportunities with the strong cash position? (Shubham Borade, ICICI Securities)
- Answer: Yes, actively pursuing opportunities with defined guardrails on returns and strategic fit. No specifics provided; management will communicate when clarity is achieved. Cash utilization will be prudent, focused on good returns. (Shubhabrata Saha)
Pricing Power & Margin Outlook
- Question: How challenging is it to take price increases, and how does steel procurement work? (Raashi Chopra, Citigroup)
- Answer: A calibrated price increase is being evaluated and may begin within Q2; Q1 did not see a hike on top of the ~2% taken in Q4 FY26. Steel (E250/E350) prices have risen; strategic purchases made for imported components but general spot purchases not attractive at current levels. Q2 EBITDA margin of 12-12.5% will be challenging; recovery to that corridor expected in Q3-Q4 as volumes improve. Geopolitical softening expected Sep-Nov could ease steel. (Shubhabrata Saha)
Other Expenses Increase
- Question: Other expenses rose ~17% on flat revenue—what drove this? (Aditya Shroff, Bandhan AMC)
- Answer: Two primary drivers—freight outward costs increased on diesel price hikes and export volume growth; SAP ECC 6.0 to SAP HANA migration cost ₹16 million in the quarter. (Ketan Pendse)
Growth Stagnation Concerns
- Question: Revenue has been flat for two years with margins below IPO levels—when will this reverse, or is it structural? (CA Garvit Goyal, Serene Alpha)
- Answer: Management emphasized 16-17% revenue CAGR over the last decade, including navigating COVID (revenues fell from ₹1,150 crores to ₹750-760 crores) and rebounding with 36% CAGR vs industry 26% during FY23-25. Current headwinds are cyclical, not structural; Ajax's asset-light model, lower breakeven, and strong working capital discipline position it to outgrow peers when demand recovers. Cash-buying optionality for inorganic growth adds ammunition. (Shubhabrata Saha)
Long-Term Margin Recovery
- Question: Can EBITDA margins return to 15% over the next couple of years, and what gives confidence? (Sanyam Shah, Solidarity Advisors)
- Answer: Q4 FY26 already demonstrated ~15% EBITDA margin despite the weak year—when demand improves, price premiumization and operating leverage deliver. Long-term corridor of 13-15% remains intact; cost initiatives (design, engineering, supply chain) are ongoing, not event-driven, and have consistently contained direct material costs. (Shubhabrata Saha)
Maharashtra/MP Weakness Duration
- Question: When did Maharashtra and MP weakness start, and how prolonged is it? (Rahul Kumar, Vaikarya)
- Answer: The decline has persisted through most of FY26. Maharashtra volumes fell from ~750 to ~950 two years ago, then to ~430-440 last year—a substantial drop driven by payment delays and muted government spending. Market share has improved despite lower volumes. (Shubhabrata Saha)
Key Takeaway
Ajax Engineering reported a resilient Q1 FY27 with revenue of ₹475 crores (+1.7% YoY) and PAT of ₹55.6 crores (+5% YoY), yet EBITDA margin slipped 70 bps to 12.5% on adverse operating leverage from industry-wide demand weakness—registrations fell 27% while Ajax declined only 21%, lifting SLCM market share to 75.1% from ~69% YoY. Management countered a tough macro with market share gains across states (Gujarat 71%→82%, Odisha 61%→88%), UDAAN scaling (121 units in Q1 vs 202 in all FY26), non-SLCM B2B customer wins (UltraTech, JSW, ACC, J. Kumar), and export traction (9% of revenue, targeting 30% CAGR over three years). A second calibrated price hike is expected within Q2, alongside accelerated cost initiatives to counter steel/fuel inflation; Q2 margins of 12-12.5% are flagged as challenging but recoverable into H2 as the ~60% H2 revenue seasonality plays out. With ₹1,100+ crores cash, management is actively pursuing inorganic opportunities while guiding to a 13-15% long-term EBITDA corridor, contingent on demand recovery, input cost softening, and government spending improvement in H2 FY27.