Nuvama Institutional Equities maintained a ‘Buy’ rating on Ajax Engineering with a target price of Rs 700, implying an upside of 23% from the current market price. Robust quarterly earnings, aided by strong market share and other factors, led the brokerage firm to retain the rating.
Strong quarterly performance
The company’s Q4FY26 EBITDA was 45% above estimates, driven by a revenue beat and improved gross margins resulting from a 2% price increase. While revenue was flat year-over-year at nearly Rs 760 crore, it was 16% higher than the brokerage’s estimates, primarily due to higher volumes in Self-Loading Concrete Mixers (SLCM).
Dominant market position
Ajax Engineering is a global leader in the SLCM segment, maintaining a 73.5% domestic market share as of FY26. The company is also successfully expanding its presence in the non-SLCM segment, where it currently holds a 26.5% market share. Its products command a 5–6% price premium over competitors due to perceived better quality, reliability, and service life.
Industry mechanisation tailwinds
A significant growth driver is the increasing mechanisation of the concrete equipment (CE) industry. The mechanised CE industry grew at a 17% CAGR from FY19 to FY24, far outpacing the 5% growth of concrete manufacturing. India’s mechanisation level has risen from 16% in FY19 to over 25% today, though it remains well below the 55–85% seen in developed markets, suggesting substantial room for growth.
Robust financial forecasts
Nuvama expects a strong uptrend for the company between FY26 and FY29, forecasting a revenue CAGR of 16% and an EPS CAGR of 14%. Additionally, the company is expected to maintain an exceptionally high Return on Invested Capital (RoIC) of approximately 66%.
“Furthermore, non-SLCMs are turning in robust growth due to an expanding product range, dealer network mining and a dedicated sales push. Over FY26–29, we forecast a strong uptrend with a revenue CAGR of 16% led by growth of 16%/16%/15% in SLCMs/non-SLCMs/spares,” said Nuvama.
Positive management outlook for FY27
The company’s management expects early double-digit volume growth in FY27, supported by recovering infrastructure activity across key states like Gujarat and Uttar Pradesh. They are also targeting 20–25% growth in exports and a significant 2–3x increase in volumes for their small SLCM product, “Udaan”.
Ajax Engineering share price performance
The share price of Ajax Engineering has risen 5% in the last five trading sessions. The stock has given a return of 14% in the past one month. However, it has declined 13% in the last six months. Ajax Engineering’s stock price has dropped 16% over the previous 12 months.
Ajax Engineering’s quarterly earnings
The company’s net profit for Q4 FY26 came in at Rs 95 crore, rising 4.5% from Rs 90.9 crore in the same quarter a year ago. It reported a revenue of Rs 757.7 crore in the fourth quarter of FY26, almost flat with Rs 755.8 crore posted in Q4 FY25. Its EBITDA for the quarter stood at Rs 114.7 crore, up 3.5%, with margins recovering to 15.1%, a 40 basis point improvement year-on-year. Gross margins in Q4 expanded 170 basis points to 25.8%.
For the whole of FY26, the company reported a total revenue from operations of Rs 2,102.5 crore, up 1.4% from Rs.2,073.9 crore in FY25. EBITDA came in at Rs 265.8 crore in FY26, down 16.4% YoY, with EBITDA margins compressing 270 basis points to 12.6%.