2 days Ago
Shares of Ajax Engineering Ltd. gained as much as 5% in Thursday's trading session. The uptick in the stock price came Ajax Engineering received its first 'Buy' recommendation after its listing in February this year.
The 'Buy' recommendation comes from brokerage firm Nuvama Institutional Equities who initiated coverage with a 'Buy' rating and a price target of ₹800, which implies a potential upside of 18% from Wednesday's closing levels. The brokerage, in its note, wrote that Ajax is a reinforced play on the fast-growing mechanised concreting equipment (CE) industry —likely to expand at a 12% CAGR over FY25–29E. Ajax holds a dominant 75% market share in self-loading concrete mixers (SLCMs) and maintains a solid presence in other CE segments.
Nuvama mentioned that Ajax's competitive advantages like better cost efficiency, quality, and increasing mechanisation will build up its growth edifice. Ajax delivered a 20% topline CAGR over FY15–25E, with FY26E growth expected to moderate to 9% due to new emission norms. However, Nuvama reckons that medium-term uptrend remains solid.
Ajax introduced SLCMs in India in 1992 and still dominates with a 75% share. These SLCMs command the highest resale value versus global peers —Schwing Stetter, Putzmeister, KYB-Conmat—due to many factors: first-mover advantage, better quality, reliability, and service life of products, comprehensive product range and wide after-sales service. "Overall, we reckon a revenue CAGR of 13% over FY25–29E led by 12%/17%/18% growth in SLCM/non-SLCM/spares.
The medium-term outlook is robust; FY26 growth shall be moderate at 9% owing to emission norms’ changes," it said. Nuvama expects a 13% revenue and 14% EPS CAGR over FY25–29E. The brokerage argued that a high target multiple is justified by continued outperformance with high RoIC compared with peers.
Key risks, as per the brokerage, include slower-than-expected growth and margin pressures in FY26 due to emission changes and slow execution of infra/real estate projects; and market share pressures due to failure of new products or higher competitive intensity. Shares of Ajax Engineering Ltd. settled 3.
40% higher at ₹700.20. The stock has risen 11% from its IPO price of ₹629.
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