Ajax Engineering Limited (AJAXENGG) Q1 25/26 earnings summary

Executive summary

• Q1 FY26 was impacted by unseasonal rains, new emission norms, and slower project execution, resulting in flat revenue at INR 4,665 million and stable SLCM business, while non-SLCM volumes grew 25% year-over-year.

• Gross margin declined to 25.8% from 30.3% year-over-year, mainly due to product mix and higher material costs from CEV-V transition.

• EBITDA fell 23% to INR 614 million, with margin at 13.2% versus 17.1% last year; PAT was INR 529 million, down from INR 669.9 million.

• CEV-V machines comprised 90% of SLCM revenue in Q1, with 883 CEV-V and 93 CEV-IV units sold.

• Management remains confident in long-term growth, focusing on operational excellence and financial discipline.

Financial highlights

• Revenue from operations for Q1 FY26 was INR 4,665 million, down 0.5% year-over-year.

• SLCM segment revenue: INR 3,848 million, nearly flat year-over-year.

• Non-SLCM volumes grew 25% year-over-year, but revenue declined 8% to INR 448 million due to absence of high-ticket paver sales.

• Spares and service revenue grew 8% to INR 369 million.

• Exports contributed 5% of total revenue.

Outlook and guidance

• Volume growth for FY26 expected in early double digits, below long-term 18% CAGR.

• Pricing strategy for CEV-V machines to be reassessed after Q2, with potential for price hikes as market stabilizes.

• Management anticipates near-term margin pressure but expects recovery through operational efficiencies and pricing.

• Focus remains on maintaining SLCM leadership and expanding non-SLCM capabilities.

• Long-term growth and profitability outlook remains positive, supported by infrastructure demand and mechanization trends.