Strong Q2; outlook robust
Ajax’s Q2FY26 revenue surged 48% YoY to INR4.4bn, 18% above estimate due to higher-than-expected SLCM and spares revenue. SLCM revenue jumped 55% YoY, non-SLCM grew 12% YoY and spares spiked 26% YoY. A large contract order from Border Roads Organisation aided SLCM sales. EBITDA at INR453mn, up 16% YoY, beat estimate by 20%.
Ajax delivered a robust 20% top-line CAGR over FY15–25 led by mechanisation, dominant position in SLCM and a healthy presence in non-SLCMs. Over FY25–29E, we forecast a strong uptrend with revenue/EPS CAGR of 14%/13% at an RoIC of 50%-plus. Retain ‘BUY’ with an unchanged TP of INR850 on 30x Sep-27E core EPS plus cash of INR84/share. The stock is trading at FY25A/26E/27E PE of 26x/27x/22x.
Q2FY26 EBITDA notably above estimates
Revenue jumped 48% YoY to INR4.4bn (our estimate: INR3.8bn), above estimate due to higher-than-expected SLCM and spares & services revenue. Revenue for SLCM jumped 55% YoY to INR3.7bn and non-SLCM grew 12% YoY to INR339mn while that for spares & services jumped 26% YoY to INR371mn. A large contract order from the Border Road Organisation aided SLCM sales. EBITDA grew 16% YoY to INR453mn (our estimate: INR376mn), above estimate, owing to revenue beat. EBITDA margin contracted 280bp to 10.2%. All in all, adjusted PAT grew 15% YoY to INR391mn (our estimate: INR356mn), above estimate due to higher operating profit.
Concrete consumption and mechanisation: A built-out opportunity
Over FY19–24, the mechanised CE industry’s volumes compounded at 17%, outpacing concrete manufacturing’s CAGR of 5% owing to better cost economics and quality of concrete over traditional manual mixers. The mechanisation trend has taken root and we forecast mechanised CE volume shall expand at an 11% CAGR over FY25–29E (versus concrete manufacturing CAGR of 5%). The share of mechanisation rose from 16% in FY19 to 25% in FY24 and may increase further.
Self-loading growth: SLCM leader leveraging growth in other CE too
Ajax dominates the SLCM market. These SLCMs command the highest resale value versus global peers—Schwing Stetter, Putzmeister, KYB-Conmat—due to first-mover advantage, better quality/reliability/service life of products and a wide after-sales service. Furthermore, non-SLCMs are turning in robust growth due to an expanding product range, dealer network mining and a dedicated sales push. Over FY25–29, we forecast a strong uptrend with a revenue CAGR of 14% led by growth of 13%/15%/16% in SLCMs/non-SLCMs/spares.
