SYNOPSIS: India’s leading concreting equipment manufacturer, despite zero debt and 73 percent SLCM market share, trades 36 percent below its peak amid revenue decline, margin compression, segment concentration risks, and delayed capacity expansion concerns despite infrastructure-driven long-term optimism.
It is relatively uncommon for a company that carries no debt, reports healthy return ratios, and holds a leading position in its segment to see its stock trading significantly below recent highs. However, Ajax Engineering finds itself in that situation. Despite its strong presence in the self-loading concrete mixer market and a clean balance sheet, the stock remains well below its 52-week peak, raising questions among investors about the factors influencing current market sentiment.
With a market cap of Rs. 5,635 crores, shares of Ajax Engineering Limited tumbled around 1 percent to Rs. 487.55 on Tuesday, as against its previous closing of Rs. 490.10 on BSE. The stock is currently trading at a discount of around 36 percent from its 52-week high of Rs. 756.75 recorded on 14th May 2025.
Company Overview & Product Portfolio
India’s leading concreting equipment manufacturer, Ajax Engineering Limited, is engaged in the business of manufacturing self-loading concrete mixers, concrete batching plants and concrete pumps, being used across various sectors.
With a comprehensive range of concrete equipment, services and solutions across the concrete application value chain, the company commands a dominant market share of nearly 73 percent in self-loading concrete mixers (SLCMs).
Ajax’s product portfolio, which includes SLCMs, stationary concrete pumps, boom pumps, self-propelled boom pumps (SPBP – which is a patented product), concrete slip-form paver, 3D concrete printer, batching plants, and transit mixers, is sold through a wide network of 51 dealers having 111 touchpoints across 22 states in India.
In addition to its dealers in India, the company have expanded its global reach with 26 dealers and distributors across South and Southeast Asia, Russia, the Middle East, and Africa.
Financial Performance Under Pressure
For Q3 FY26, the company posted a revenue from operations of Rs. 434 crores, reflecting a sequential decline of over 2 percent QoQ compared to Rs. 445 crores in Q2 FY26. Likewise, on a year-on-year basis, revenue fell nearly 21 percent from Rs. 548 crores recorded in Q3 FY25.
The revenue performance was impacted by the strong base of the previous year. While secondary sales remained healthy throughout the quarter, indicating stable underlying demand at the dealer level, overall revenue was affected by extended monsoon conditions, the transition to new emission norms, slower project execution, and cash flow constraints faced by customers.
Net profit for Q3 FY26 stood at Rs. 38 crore, indicating a decrease of nearly 3 percent QoQ from Rs. 39 crores in Q2 FY26, as well as a year-on-year decline by around 44 percent from Rs. 68 crores reported in Q3 FY25. Further, profitability weakened notably, with the PAT margin declining by 360 bps to 8.8 percent in Q3 FY26 from 12.4 percent in Q3 FY25.
The decline in profitability was primarily driven by higher production costs associated with new CEV-5 machines, changes in product mix, and one-time marketing and promotional expenses incurred during Q3 and 9M FY26.
Operating performance also weakened during the quarter. Adjusted EBITDA fell to Rs. 47.7 crore, marking a decline of around 46 percent YoY from Rs. 88 crores in Q3 FY25, while EBITDA margins fell to 11 percent, reflecting a contraction of 510 bps YoY from 16.1 percent. The contraction was largely attributed to the higher cost of production linked to the shift to new emission norms, product mix changes, and higher marketing spends.
Management Comments
Commenting on the Q3 and 9M FY26 performance, Mr. Shubhabrata Saha, MD & CEO of Ajax Engineering, noted that the past few quarters have been transitional for the industry, impacted by extended monsoons, regulatory changes in emission standards, and slower project execution. He stated that while higher production costs weighed on margins during this phase, the company expects operating leverage, process efficiencies, and calibrated pricing actions to support profitability from FY27.
He further expressed confidence in the company’s long-term growth trajectory, citing continued government focus on infrastructure development and the structural shift towards mechanised construction as key demand drivers. The company remains focused on maintaining leadership in the SLCM segment while scaling up its non-SLCM portfolio.
However, the company highlighted that the Government’s push for infrastructure development, reflected in the recent budget announcements, can drive demand and support steady volume growth. Along with operating leverage, the management anticipates some price adjustments to further aid the profitability from FY27.
Revenue Mix & Key Financial Ratios
In Q3 FY26, the company reported revenue of Rs. 346.5 crore from the SLCM segment, reflecting a decline of about 26 percent YoY from Rs. 470.5 crore in Q3 FY25. Non-SLCM segment revenue rose nearly 13 percent to Rs. 49.3 crore from Rs. 43.6 crore, while Spares & Services segment increased around 11 percent to Rs. 37.8 crore from Rs. 34 crore.
In terms of contribution, SLCM accounted for roughly 80 percent of total revenue in Q3 FY26, down from about 86 percent in Q3 FY25, whereas Non-SLCM’s share improved to around 11 percent from 8 percent and Spares & Services rose to nearly 9 percent from 6 percent year-on-year.
In terms of financial ratios, Ajax Engineering has a RoE of 25.1 percent, ROCE of 33.6 percent, with zero debt-to-equity. Further, the stock is currently trading at a lower P/E of 25.2, compared to the industry average of 32.3, indicating the stock might be undervalued.
Manufacturing Expansion – With Execution Questions
AJAX Engineering has established a strong technology-led manufacturing footprint with three existing facilities located at Bashettihalli, Gowribidanur, and Obadenahalli, along with an upcoming unit at Adinarayanahosahalli.
The Bashettihalli plant, set up in 1992, manufactures SLCMs, concrete pumps, boom pumps, and pavers, and spans a total area of 19,340 square meters. It has an installed capacity of 96 SLCMs, 180 concrete pumps, 48 boom pumps and 3 pavers.
The Gowribidanur facility, operational since 2014, focuses on batching plants and transit mixers. Spread across 78,920 square meters, it has an installed capacity of 216 batching plants and 480 transit mixers.
The Obadenahalli plant, established in 2018 and recognised among the largest SLCM facilities globally, is dedicated to SLCM manufacturing. It covers 39,660 square meters and has an installed capacity of 7,200 units.
Further expanding its footprint, the upcoming Adinarayanahosahalli facility will offer fungible capabilities to assemble a wide range of concrete equipment. However, the commissioning timeline for this facility continues to be pushed out. In the earlier update, the company had guided that the plant would become operational by H2 FY26. However, in the subsequent quarter, the timeline was revised to Q1 FY27, suggesting shifting projections around the start date. The repeated adjustments to the commencement timeline raise concerns about execution clarity and project visibility.
Conclusion
Ajax Engineering operates with a dominant market share in the SLCM segment and maintains a debt-free balance sheet with healthy return ratios. However, recent financial performance indicates that the business is not immune to cyclical pressures. Margin compression, earnings volatility, and dependence on a single core segment highlight certain structural sensitivities.
While long-term infrastructure spending and mechanisation trends could support demand, near-term challenges, including profitability pressures and shifting timelines for capacity expansion, have weighed on investor sentiment. The stock’s correction from its peak reflects these concerns. Going ahead, improvement in margins, stability in demand, diversification beyond SLCMs, and execution on expansion plans will be key factors to monitor.
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