About the Company:
Ajax Engineering stands as India's leading concrete equipment manufacturer, bringing over three decades of expertise to the construction industry. As of September 2024, the company has established itself as a dominant force in the concrete equipment sector, particularly in the self-loading concrete mixers (SLCM) segment, where it commands an impressive 77% market share in India.
The company's comprehensive product portfolio spans the entire concrete application value chain, with more than 141 concrete equipment variants developed over its 32-year journey. Ajax Engineering's product range includes essential construction equipment such as self-loading concrete mixers, batching plants for concrete production, transit mixers for transportation, boom pumps, concrete pumps, self-propelled boom pumps for concrete placement, slip-form pavers, and innovative 3D concrete printers.
Particularly noteworthy is Ajax Engineering's dominance in the SLCM market, where their machines processed approximately 12% of all concrete produced in India during Financial Year 2024. The company's SLCM sales have shown remarkable growth, achieving a CAGR of 45.70% between Financial Year 2022 and the six months ended September 30, 2024. These self-loading concrete mixers are sophisticated machines equipped with advanced features, including self-loading arms with hatch buckets for minimal spillage and concrete batch controllers for precise ingredient measurement.
The company's equipment finds applications across diverse infrastructure projects, including:
1. Transportation infrastructure, such as roads, railway lines, underground tunnels, elevated tracks, flyovers, and bridges
2. Irrigation projects, including reservoirs, canals, check dams, and aqueducts
3. Large-scale infrastructure developments like airports, power plants, factories, and oil and gas terminals
The graphic below illustrates their concrete equipment portfolio and their uses, as of September 30, 2024:
Revenue from different business segments:
Ajax Engineering's revenue structure reflects its strong market position in the concrete equipment sector, with self-loading concrete mixers (SLCMs) forming the backbone of its business. Let's examine the revenue distribution across its key business segments for Financial Year 2024:
Self-Loading Concrete Mixers (SLCM) have emerged as the company's primary revenue generator, contributing 85.13% to the revenue with a remarkable growth, a YoY increase of 51.28% from FY 2023 to FY 2024. The robust performance in the SLCM segment underscores the increasing adoption of these versatile machines in India's construction sector.
Non-SLCM Products form the second major revenue stream for the company contributing 8.85% to the revenue, recorded a 55.03% increase from the previous fiscal year.
The Spare Parts, Services and Others segment has proven to be a steady revenue contributor, bringing in ₹1,048.48 million during FY 2024 & contributing about 6.02%. This segment saw substantial growth of 42.78% compared to FY 2023.
The diversified revenue streams, combined with the dominant market share in the SLCM segment, provide Ajax Engineering with a robust business model that balances growth with stability.
Revenue from Exports:
Industry Context:
India is the fastest-growing economy amongst the G20 countries, with the secondary sector as one of the key drivers of growth. Construction activity has grown faster in recent years given the inflow of significant public and private investments.Infrastructure and real estate development have been at the forefront of these investments
Key industry growth projections include:
● Construction activities in India have grown faster in recent years, driven by significant government investments towards infrastructure development, a favourable regulatory environment, successful public private partnerships, and rising private investments through FDI.
● Growth in construction activity has led to an increase in the domestic cement consumption in India which has risen from INR 28 trillion (US$ 333 billion) in FY 2019 to INR 41 trillion (US$ 490 billion) in FY2024.
Financial Performance
Total Income:
Total income has grown at a CAGR of 51.86% from FY 2022 to FY 2024.
EBITDA and EBITDA Margin:
EBITDA has grown at a CAGR of 74.51% from FY 2022 to FY 2024.
Profit after Tax (PAT) and PAT Margins:
PAT has grown at a CAGR of 84.4% from FY 2022 to FY 2024.
Key Risks:
● Some of their Promoters do not have adequate experience in the line of business and have not actively participated in the business activities they undertake, which may have an adverse impact on the management and operations of the Company.
● They face significant competition from domestic and international construction equipment manufacturers which may lead to a reduction in their market share, which in turn may adversely affect their business, results of operations, financial condition and cash flows.
Valuation and Peer Comparison:
The company’s FY24 price-to-earnings (P/E) ratio at the upper price band is 31.12. The industry average P/E is 45.36.
Objects of the Offer:
The objects of the Offer are to:
(i) achieve the benefits of listing the Equity Shares on the Stock Exchanges
(ii) carry out the Offer for Sale of up to 20,180,446 equity shares.
Further, the company expects that the proposed listing of its Equity Shares will enhance visibility and brand image as well as provide a public market for the Equity Shares in India. The company will not receive any proceeds from the Offer as it 100% OFS.
IPO Details:
