Ajax Engineering Eyes 18% Growth After Market Debut

Ajax Engineering Ltd. is on track to clock a growth rate of up to 18% in the near term, said the company's management post its market listing on Monday.

Ajax Engineering made a lacklustre debut on the stock markets, as its scrip opened at Rs 593 apiece on the BSE, nearly 6% lower than its initial public offer price of Rs 629. On the National Stock Exchange, the shares listed at Rs 576, marking an 8.4% discount to the IPO price.

Commenting on where Ajax Engineering expects the growth to stand in the near term, the company's Managing Director and Chief Executive Officer Shubhabrata Saha told NDTV Profit that a 15% to 18% growth rate looks achievable.

He explained that the 50% year-on-year revenue growth seen in the last two financial years may not be sustainable. According to him, the sharp uptick was mainly due to a lower base post the Covid-19 pandemic.

"From 2014 onwards to 2024, the decadal growth of the company has been 18%. In the last couple of years, we are coming out of a lower base, post-Covid. Last year, again, was a pre-election year with lots of liquidity and impetus to complete the project which gave us a strong performance boost. Our near-term performance indicators are in the range of 15% to 18% as we move forward,” Saha explained.

Speaking about performance sustainability, Tuhin Basu, chief financial officer of Ajax Engineering, said that the company is poised to maintain Ebitda margins between 15-16% throughout the foreseeable period of financial year 2025-26.

The company’s Ebitda stood at Rs 171 crore in fiscal 2023, and jumped to Rs 272 crore in fiscal 2024.

On being asked about funding Ajax Engineering’s expansion plans considering that its IPO solely comprised an offer-for-sale of over 2 crore shares, Saha said the “strong financial profile" is indicative of the ability to fund the expansion through internal accruals.

Following the muted listing, shares of Ajax Engineering showed some momentum during Monday's trade. The stock rose over 5% from the listing price to touch an intraday high of Rs 609. It pared some of the gains, but ended the session 3.02% higher at Rs 593.4 apiece on the NSE, compared to 0.13% rise in the benchmark Nifty 50.