Ajax Engineering Limited (NSE: AJAXENGG) Q1 2026 Earnings Call dated Aug. 04, 2025
Corporate Participants:
Unidentified Speaker
Shubhabrata Saha — Managing Director and Chief Executive Officer
Tuhin Basu — Chief Financial Officer
Analysts:
Unidentified Participant
Mohit Kumar — Analyst
Raghunandhan NL — Analyst
Shankara Narayanan — Analyst
Vaibhav Shah — Analyst
Mayank Bhandari — Analyst
Balasubramanian A — Analyst
Rashi Chopra — Analyst
Kurupanchu — Analyst
Pritesh Chheda from — Analyst
Rahul Kumar — Analyst
Nidhi Shah — Analyst
Presentation:
operator
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Ladies and gentlemen, you’ve been connected to the ajax engineer in Q1 FY26 earnings conference call. Please stay connected, the conference will begin shortly. Ladies and gentlemen, this is for the Ajax Engineering Q1FY26 earnings conference call. Please stay connected, the conference will begin shortly. Thank you.
operator
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Ramir.
operator
Ladies and gentlemen, good day and welcome to the Q1FY26 earnings conference call of Ajax Engineering Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions once the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star and zero on your Touchstone phone. Please note that this conference is being recorded. Before we begin, I would like to point out that this conference call may contain forward looking statements about the company which are based on the beliefs, opinions and expectations of the company as on the date of this call.
These statements do not guarantee the future performance of the company and it involves risk and uncertainties that are difficult to predict. I now hand the conference over to Mr. Shubha Brita Saha, Managing Director and Chief Executive Officer of Ajax Engineering Limited. Thank you. And over to you, sir.
operator
Thank you.
Shubhabrata Saha — Managing Director and Chief Executive Officer
Good afternoon everybody. Thank you for joining us on AJAC Engineering Limited’s Q1FY26 earnings conference call. Along with me on the call we have our CFO, Mr. Tuhin Basu and SGA, our investor relations partner. We have uploaded our result and investor presentation on the stock exchanges and on our website. I hope everybody has had an opportunity to go through the same. Before we dive into this quarter’s performance, I would like to take a moment to reflect on on Ajax’s journey. Spanning over three decades, Ajax has demonstrated remarkable resilience and adaptability through multiple business cycles and challenging phases.
The first 22 years laid a solid foundation and over the past 1011 years we’ve successfully navigated critical disruptions that included demonetization, introduction of GST, COVID 19, pandemic election cycles in the center and the state, changes in emission regulations, and of course, sector cyclicality. Through this last decade, Ajax has delivered an impressive 18% revenue CAGR which is a testament to our unwavering focus on operational preparedness, precise execution and financial discipline. These qualities continue to empower us to not only withstand adversity, but emerge from.
Shubhabrata Saha — Managing Director and Chief Executive Officer
It stronger than before. We had the last emission transition in FY21 22. Over the next three years between FY22 to 25, we delivered a robust CAGR of 40%. This strong trajectory underscores the same foundational qualities I had mentioned earlier, which is about operational preparedness, executional precision and financial discipline that define who we are and continue to drive our success. The last fiscal has been no different in terms of the external challenges we faced, but true to form, AJAX has continued to navigate this headwind with focus and resilience. In the given context, we delivered a healthy performance in FY25, clocking 19% revenue growth driven by our volumes.
Our core segment that is SoCMS performed well. A key highlight was the successful launch of our new CEV5 emission compliant machines in Q4FY25. At the same time, our spares and services business is gaining steady traction and showing promising progress. In line with our strategic focus, we’re consistently working to scale up our non SLCM segment which is also gaining positive momentum. I’d like to highlight some of the recent initiatives we’ve taken to strengthen our capabilities and build organizational competency. Number one, the launch of the CEV5 compliant SLCM portfolio with enhanced value proposition. In addition to the expansion of our dealer network, we’ve been augmenting our go to market strategy by building a B2B channel in the top eight metro cities where we are operational.
Our focus is in the non focus or value proposition in the non SLCM business is to offer better reliability, reduced downtime, lower operating costs and ready availability of spare parts and machine Service. A strong B2B channel combined with a dealer channel will be a key growth driver for our non SLCM business. We also have our new facility coming up in Adi Narayana Hosahalli which is very close to our Upadanahalli plant which produces SoCMS. This we expect to commission in the second half of FY26. Let me now take you through the current business landscape and outlook.
We observe that the on ground execution of infrastructure projects have had a slowdown. For example, in case of PMGSY, the length of road constructed has reduced by 37% from FY24. The pace of construction of highways similarly has reduced by about 9% from 24 to 25. Additionally, the unseasonal rainfall in the month of May in many parts of the country and cash flow delays experienced by our customers did not help with the industrial demand. Our business anyways is skewed towards the second half of the fiscal with around 65% of our annual revenue coming in the second half.
The unseasonal rain, the transition to the new emission norms and a slow pace of project execution have all had an impact on the business in Qi FY26 I’d like to highlight some pertinent aspects of the regulatory transition of emission norms. The shift from CB4 to CB5 emission standard effective 1st of July 2025 has had a notable impact on the industry in the last few quarters. Regulations permitted the manufacture of CV4 compliant machines until December 2024 with sales and associated registration allowed until 30th of June 2025. Riding on our situational awareness, operational preparedness and technology driven manufacturing capabilities, we were ready ahead of the curve and as a result we had a promising launch of our CV5 machines in in the last quarter.
The CB4 inventory which we had built up until December 2024 was largely cleared in Q4FY25 and the balance was completely sold out in Q1FY26. With the 30 June deadline looming for the sale of CEB4 machines, we witnessed some highly unsustainable business practices in the industry during Q1. However, we continue to maintain our financial discipline during this period. Also, we continue to see reasonable momentum in our CV5 portfolio during the quarter. We believe that the decline in the overall market share in the SLCM segment that you see in this quarter is only a temporary phase driven by the reasons which I just mentioned.
In the CV5 portfolio, our market share remains broadly in line with the historical levels seen in the overall SLCM segment previously. With only CEB5 machines permitted to be sold now onwards, we expect our overall market share in SOCMs to revert to the erstwhile range as we go deeper into the year. An example of this is clearly a strong performance in terms of market share. Demonstrated in the month of July. The implementation of the new emission norms has also led to an impact on the cost front. The transition to CV5 standards has led to an increase in the material cost leading to an impact on the gross margin on a yoy basis. Our pricing strategy will be very carefully calibrated after taking into account the market response and elasticity to the new CEV5 compliant machine. During FY26, both CV4 and CV5 sorry during Q1 FY26, both CV4 and Cv5 models were available in the market. However, starting Q2 FY26, only CV5 machines will be on offer. The transition will allow us to gauge customer response more clearly.
We expect to gain a better understanding of the adoption trend and pace of the pickup of CD5 machines while entering the third quarter after the peak monsoon period. That will be crucial in taking an informed decision on the pricing strategy. Short term road bumps like these are typical in our industry and AJAX has consistently demonstrated the ability to navigate such phases while maintaining steady performance. As we’ve emphasized in the past, the business is best viewed on an annualized basis rather than quarterly. Structurally, we remain fully confident in the longer term growth trajectory of our business.
India’s substantial infrastructure development needs coupled with the shift towards mechanized construction and concreting equipment will continue to drive steady demand which positions Ajax well for sustained growth. Our long term outlook on both growth and profitability remains firmly intact. We remain committed to maintaining our leadership position in the SLCM segment while also building strong capabilities in the non SLCM space. Operational excellence and financial discipline remain central to our strategy. We continue to have a robust cash position ensuring considerable financial muscle to pursue our growth ambition. With this, I’d like to hand over the call to Tuhin to take you through the operational and financial performance.
Thank you and over to Tuhin.
Tuhin Basu — Chief Financial Officer
Thank you Shubhu Good afternoon and a warm welcome to Everybody on our Q1 FY26 earnings call. I’ll see from the quarterly numbers. Revenue from operations for Q1FY26 stood at 467 crores and remains flat as compared to the 469 crores in Q1FY25. Volume and Revenue in SLCM segment was flat on a year on year basis with revenue standing at 385 crores in Q1FY26 versus 386 crores in Q1FY25. On the non SLCM front the volumes grew by 25% on year on year basis. However the revenue declined by 8% due to the product mix change. It is important to note that we had sale of our script form pavers in Q1 of last year which is a high ticket size product and that was absent in Q1 of FY26 resulting in the decline of revenue.
Revenue from spares and service business has seen a growth of 8% on year on year basis and stood at 37 crores in Q1FY26. Exports contributed 5% of the total revenue in Q1FY26. Gross margin for Q1FY26 stood at 25.8% compared to 30.3 in Q1FY25. Considerable portion on the year on year decline is gross margin on account of the product mix which I just mentioned and Pavers played a big part given our big ticket size and a relatively high margin product. There was also some impact due to the increase in production costs for the CEV5 machines which were not manufactured in Q1 of last year.
And as Shubhu mentioned, that pricing is something which we will monitor on a close call and take decisions thereof as we progress during the year. On a year on year basis, the impact on the gross profit and margin has percolated down to EBITDA as well. EBITDA for the quarter stood at 61 crores compared to 80 in Q1FY25, a decline of 23%. EBITDA margin this quarter stood at 13.2% versus 17.1 in Q1FY25. Looking at EBITDA margin sequentially would not be justified due to the inherent quarterly seasonality of the business which also impacts operating leverage for us.
Profit after tax for the quarter stood at 53 crores versus 67 crores in Q1 FY25. We again reiterate what Subho mentioned, that our business has to be looked at an annualized basis instead of a quarterly basis at a point in time on the balance sheet front, we continue to remain debt free and have a very strong cash position. With that I’ll open the floor questions. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press STAR and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mohit Kumar from ICICI Securities. Please go ahead.
Mohit Kumar
Good afternoon sir and thanks for the opportunity.
Mohit Kumar
My first question is is it possible. To help us with the mix of non SLCM in the quarter? This is last quarter, the base year and what explains strong volume growth? Qualitatively, this segment grew faster in the quarter. Now you have to the development of B2B channel.
Shubhabrata Saha
Mohit, your voice was not completely clear, but I’m just paraphrasing what we heard at our end. You want to understand the Q1 FY26.
Mohit Kumar
Let’S say revenue mix on the non SLCM portfolio, right?
Shubhabrata Saha
Absolutely.
Shubhabrata Saha
As I mentioned in my opening remarks as well that favors last year played a significant part and that had a contribution to the revenue. This time. Volume growth has been driven by batching plants and associated transit mixes and that kind of also cements. Let’s say what we have been consistently mentioning that we will continue to have specific focus on the non SLCM portfolio and the volume growth that you see this year of about 25% is coming from those batch implant associated products like transit mixers which are sold alongside the batch implants.
Mohit Kumar
Understood sir. My second question is what was the mix of CEV4 and CEV5 in the quarter?
Shubhabrata Saha
So CEV5 in Q1 contributed, let’s say 300, roughly 300 plus crores of revenue versus CEV4 of around 25 crores. So that kind of gives you that 9010 broadly is the revenue mix of CEV5 to see and CEV4 in Q1.
Mohit Kumar
Understood. Thank you. Thank you sir. That’s it.
operator
Thank you. A reminder to the participants, please press Star and one to ask a question. The next question is from the line of Raghunandan from Nuama Research. Please go ahead.
Raghunandhan NL
Thank you sir for the opening remarks and for clarifying on market share for Q1. So firstly on the acceptance of smaller SLCM where you had been doing pilot projects, how do you see the initial feedback by when do you see the product available across the country? How do you see that as being a market share trigger in the future?
Shubhabrata Saha
You have lots of question and one question, Raghu. But I’ll still try to attempt answering each of them. Happy to say that I think the initial test validation and the feedback mechanism seems to have gone reasonably well from the product point of view which gives us some confidence. And we’ve started doing some kind of very soft launches with some select dealers in specific markets. And this is as you know, is the rainfall season. So obviously the quantum of work that these machines will do will be limited. But I think it’s important for the dealers to have a good look and feel, understand the product, start looking at these segments which have been hitherto unaddressed by them in terms of building contractors and people who would actually lay roofs and so on and so forth.
So I think this is at an early stage. I think come the second half of the year we would definitely want greater proliferation of these machines across the country. Once we have done this test with at least the first 2530 dealers to begin with. As far as the market share trigger is concerned, I think let this phase of the dealers getting used to this machine working out the customer segments that they need to work with which were not the same segment that possibly they would have been used to as far as sale of Argos is concerned, I feel reasonably confident as time moves along.
Raghunandhan NL
Thanks for that sir. Secondly, in terms of CE5 so gross margin has broadly come off by about 400 bits. I am assuming that is the quantum of under recoveries because of CE5 time permitting, would you look at taking that 3, 4% kind of a price hike over next few quarters based on market conditions or would you partially try to manage it by cost reduction activities?
Shubhabrata Saha
So Raghu, two things I’ll maybe I’ll start the clarification on the gross margin first. See if you look at Q1 versus Q1 then you see roughly a 5% or 4.5% shape which is what let’s say you’re referring to the 33, the 30.3 versus the 25.8 this year whereas paver did play a significant part. So if I look at the full year of FY25 which was in the range of 27 and we have got 25 plus let’s say for the quarter so we price increase or rather the cost increase is not the only driver in terms of the dip in the gross margin which you experienced which we see in Q1 FY26, the 450 basis points, I will attribute roughly 50, 50 or 60, 40, 60% to the DMC or direct material cost change for the CEV5 and the paver kind of having a significant contribution as well in terms of the gross margin decline.
In terms of the pricing increase, I think we have been transparent and consistent over the last several conversations with all of you that we will have a closer look at the pricing as we progress in the year. We anticipate that we will be able to start start nudging the pricing up towards end of Q2. The reason being that Q1 both the type of machines were available in the market, CEV4 and CEV5 and that obviously impacts or impinges our effort in terms of increasing the pricing. When both the variants are available July August, we expect to be more tempered in terms of demand and once the market kind of gets back to demand, let’s say after Janmashtami Ganesh Chaturthi, which is more towards the end of Q2, that’s when we would be able to push the pricing up as we progress into the market.
So while we would not be able to give a very sacrosanct view of how much we will be successful, all we can say is that we will try to bring the margin back to the corridors which we have experienced previously.
Raghunandhan NL
Thanks for that sir. And any thoughts you can share on the dividend payout policy and utilization of the large cash reserves and also any thoughts on using the cash for M.
Shubhabrata Saha
And A so on the dividend, I.
Shubhabrata Saha
Think the Company has declared dividend only twice in almost a decade. One was in 2018-19 time period and one was in 25. So sorry, one was in 24, we paid out in 25. And it’s a topic which we obviously keep in our mind. We have a dividend distribution policy at the current time. The board has not decided to go forward with the dividend for a reason that we are in the growth phase and they believe that the management and collective with the company should reinvest the money to funnel their growth phase, whether it’s organic or inorganic.
And I’m using the word inorganic a bit broadly because it need not be a plain manila old school acquisition. It could be a different corporate development structure and hence we are of course looking at options. We have looked at options in the last six months. Few of them do not match our expected guardrails and corridors and hence we are also not going forward with them. So it’s an active topic for us. It’s a topic which we are seeking, let’s say advisement from different people. But we are also very clear in terms of what we will not do from a financial and business student standpoint and hence you do not see the cash getting deployed yet.
But we are in the lookout and we will of course keep you posted once let’s say there are things more sacrosanct which we have been able to button down and we believe that’s the right thing for the company to do.
Raghunandhan NL
Thank you sir. I’ll get back to the queue.
Raghunandhan NL
Thank you.
operator
Thank you. The next question is from the line of Pritesh from Lucky Investments. Please go ahead.
Pritesh Chheda from
Yeah, hi Tilleed, just a clarification first. So based on your comments and now this quarter where 90% of the SLPM revenue is from CE5 machine and when you mentioned that the GP way to look at is half GP impact is because of the product mix of non SLPM. So you know when you adjust that basically from this quarter your margin is similar to what you did in last full year with this quarter having a full SLPM largely a full SLCM based revenue for the GCE5 based SLCM revenue. Is this correct in our understanding?
Shubhabrata Saha
So not, not completely there. So if I see last year it was 27% and a full year, you.
Shubhabrata Saha
Know the impact of pavers obviously get diluted 1/4 it had a over, let’s say a disproportionate impact for one quarter but for the full year the 27% which was there in FY25 is, let’s say the baseline gross margin. If I ignore the paper, I think we would still be about 150 to 200 basis points short on the gross margin. So from that standpoint, Ritesh, we have eroded the gross margin for the quarter selling the new machines where we have not been able to push the pricing up. And then as we progress during the year, we will see how do we adjust the pricing so that we are able to claw it back as much as possible.
So I wouldn’t say that if the pavers are not there, we are exactly at that corridor. We are of course lower by about 150, 200 basis points.
Pritesh Chheda from
Fine. Okay.
Shubhabrata Saha
Just that you’re a lean quarter and I just added the 200 bits back to the EBITDA margin of this quarter. So as soon I adjust that 2 to 225 basis points to the EBITDA margin reported, I am at 16% which is similar to what we did last year. Now this is after a fact that from that.
Pritesh Chheda from
Understood. So on the EBITDA I think yes.
Shubhabrata Saha
As we progress, the volume will play a part. If you see our employee cost as a percentage of sale, just as a proxy which I wanted to call out, it’s in the range of 6 plus percentage which will normalize more towards what FY25 was. So yes, to that extent you can say that, you know, the EBITDA was. EBITDA will start getting closer to the 15%. That’s correct.
Pritesh Chheda from
The other question is it is closer to 15% even this quarter actually adjusting for the product mix.
Shubhabrata Saha
It is, yeah. And the volume. Correct, Correct.
Pritesh Chheda from
Okay.
Pritesh Chheda from
Now my second question is with SLC, with the C5 machine already being larger portion of this quarter, I could understand the 3% price decline in SLCM. So if you could throw some light there.
Shubhabrata Saha
So that is purely because of the volume mix. We have a very wide range of SLCM capacities. Argo 2 series, Argo 4 series are very different price points given just the throughput they have. So that obviously plays a part in terms of, you know, when we just divide the quantity and the value. So that is essentially because of that it’s not a secular decline of 3% across all models we have experienced in this quarter. That’s not the case.
Pritesh Chheda from
Okay.
Pritesh Chheda from
And can you quantify the extent of cost increases on account of the C5 emission change on a blended level?
Shubhabrata Saha
It’s just above 400 basis points. Direct material. Yeah.
Pritesh Chheda from
Okay.
Pritesh Chheda from
And my other question is, what is the progress now on the machine with voice which you are supposed to introduce in the market?
Shubhabrata Saha
Pritesh I just answered that question in a previous conversation where I had mentioned that we took up a beachhead market. We did test and validation, we took consumer feedback and stuff like that, which gave us a degree of confidence for us to have a soft Launch with about 15, 20 dealers based across various locations in the country. Given the fact that we are in the thick of the monsoon season, the quantum of throughput to be done through these machines will be limited. But I think it’s important for the dealers to start understanding and conversing with a completely new set of, let us say target audience in this category to be ready to be able to push out volumes in the next few months when the second half of the year begins, which is when we see greater traction in these activities.
Pritesh Chheda from
And my last question is what kind of revenue growth or volume growth do you see for FY26 considering the transitions on emission, the market is playing out? Do you see yourself closer to your long term CAGR of 18% which you mentioned earlier?
Shubhabrata Saha
I think we don’t typically give a forward looking sacrosan statement. But Pritesh, just to call it out that we, we don’t anticipate the volume growth to be 18% this year. We expect it to be more, let’s say in the early double digits. But yes, I mean the 18% was also not every year clockwork. It was block off years. So these some years of low double digit and some years of high double digit or let’s say high teens will cover the CAGR to 18% in a block of few years.
Shubhabrata Saha
On a lighter note, Pritesh, I think the onset of Ganpati and his arrival will augur for good times if you will hopefully.
Pritesh Chheda from
Sir.
Pritesh Chheda from
Thank you very much. Yeah, please do it sir. He wanted to mention something, sir.
Shubhabrata Saha
I mean no, I think, I think Shubhu mentioned in his opening remarks as well that we do see a slight rapidness in the, in the progress of some of the the infra projects and that obviously impacts the cash flow for the contractors as well, which is also representative of sorts in terms of the volume which we experienced in Q1 of FY25. So considering those aspects and the volume upswing only expected more towards end of Q2. I think early double digit is what we will expect on the volume front. This.
Pritesh Chheda from
Okay, thank you very much.
operator
Thank you.
operator
Thank you. Ladies and gentlemen. In order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. Should you have a follow up question, we would request you to Rejoin the queue. The next question is from the line of Shankara Narayanan from. I thought pms. Please go ahead.
Shankara Narayanan
Good evening sir. So my first question is regarding the customer acceptance of our latest CEV5 machines and how well our customers are accepted accepting and is there any price difference compared to CEV4 missions? My second question is that apart from emission changes that you have done, have you done any other modifications in the latest missions?
Shubhabrata Saha
Okay, so I think. Let me take. There are two parts to this actually three questions in the same as far as acceptance is concerned. I think I did mention about the fact that in Q4, FY25 itself a third of our volumes came from the CV5 category. We believe Antohen has also spoken about the volume mix of CV4 and CV5 in the first quarter of FY26 as well. So clearly we’ve done our homework very well in terms of our operational preparedness and getting the machine right when we put it out in the market. And the best way to compare this is did we receive any significant complaints, did customers have any challenges, was the machine not operating to its specs and so on.
And so was happy to report back that that the strong test and validation mechanism that we had put out based on our learning from the previous transition that took place in FY21 and 22.
Shankara Narayanan
The machine performance has been quite good so far.
Shubhabrata Saha
So that is the first part. I think Tuhin has also spoken about the pricing and the impact of pricing on the margins in the first quarter between all that was sold, both for CV4 and speed. As far as the product value proposition is concerned, clearly the product value proposition is stronger. We worked very strongly with all the suppliers. For example, if you look at the product nomenclature, the nomenclature has also shifted in certain cases. Our old 4300 has become 4500. We’ve introduced a 3000 and so on and so forth, which actually addresses some of the gaps that may have existed in the portfolio and the way customers will look at it in terms of the throughput that the machine provides and the value therefore to them on a cubic capacity basis every time that they use these machines.
And this so far has turned out to be good. If you look at it in terms of machine performance, many of the machines initially that were put out in the marketplace have already completed 500 hours and that’s a good number to have in terms of operational capabilities of the machine retention or anything that has arisen. We haven’t seen anything very significant to upset our sleep.
Shankara Narayanan
Got it, sir. And still we maintain a premium compared.
Shubhabrata Saha
To other competitors SLC and so our intent has been that and our intent will continue to be that.
Shankara Narayanan
Got it sir, thank you and best of luck.
Shubhabrata Saha
Thank you.
operator
Thank you. A reminder to the participants to please limit your questions to two participants. Should you have a follow up question we would request you to rejoin the queue. The next question is from the line of Vaibhav Shah from JM Financial. Please go ahead.
Vaibhav Shah
Firstly, what was the Paver revenue in Q1 last year? In FY25.
Vaibhav Shah
It was more 140 million plus.
Shubhabrata Saha
Okay, okay. The second you mentioned that we have switched from 4300 to 4500 and we introduced AGO3000 so replaced any older machine or we have other machines as well. Yes, it has. So. So 2800 has moved to 3000. So now we have reached 23 and. 3045 and 48 for 2000-2500-3000-4040, 500, 4800. Okay. Okay. Enter any. What is our market share right now in SLCM and how do we see it maintaining it?
operator
Can you come back again our SLCM.
Vaibhav Shah
Market share right now?
Shubhabrata Saha
Yeah, so I think as far as July is concerned, I think we’ve returned back to the very strong number upwards of 75%. So that is something good to have especially during a quarter where we did see some unsustainment sustainable business practices and we didn’t want to walk down the path.
Vaibhav Shah
Okay. And sir, lastly, how do you see the realizations moving forward especially for the SLCM business in Q1? It was flattish so it should be a similar trend for the entire year or there may be some cuts or for the year.
Shubhabrata Saha
So I think, I think we called it out during our initial. I think pricing is something that we will follow through very actively. We need to look at the current demand scenario in the marketplace and basis that I think we will take prudent calls to make sure that our financial position continues to remain strong. I think financial discipline at Ajax has remained the cornerstone of how we’ve done business and we’ll continue to make sure that we do that.
Vaibhav Shah
Lastly on the Argo mix, so it should be similar to 5050 for the lower end and the higher end in terms of sizes, drum sizes.
Shubhabrata Saha
See there are two parts to it. It’s very early to call out anything at this stage. We’ll also have to look at very clearly. There are states which are two series states. There are states which are driven more by the 4 series. Etc if you see that, you know certain States are not doing as well as the other states. I mean who knows how it will all pan out. We are only hoping and expecting that the government’s emphasis on putting infrastructure back on track, getting cash flows on track will be a more secular trend in terms of growth across all states.
Vaibhav Shah
Okay.
Vaibhav Shah
Okay, thank you sir. Those are my questions.
operator
Thank you. The next question is from the line of Mayang Bhandari from Asian Market Securities. Please go ahead.
Mayank Bhandari
Yeah, thanks for the opportunity sir. Just checking you’ve given a very diverse customer base in your presentation which in which you categorized five categories. Individual contractors, small, mid sized, contracted firms. Is it possible to give any breakdown around that?
Shubhabrata Saha
So I think in the past we’ve given a broad breakdown but I think this is too early for us to really call out as to how the whole structure will pan out from a CV5 perspective. But I think on a very broad basis we used to call it out of 30, 30, 40 kind of a scenario depending upon how it kind of plays out. So I think it’s too early for us to even say anything at this stage with these new products being on the Anvil.
Mayank Bhandari
So this mix, what was it earlier if I may.
Mayank Bhandari
So you can assume roughly about 40% coming in from the first time buyers, about 30% coming in from people who are small and mid sized contractors and about 30% coming in from rental companies which we believe is a very good mix. And Mayank, just to clarify, the government.
Shubhabrata Saha
Construction agencies do not directly buy from us.
Mayank Bhandari
That’s quite helpful. And secondly sir, you highlighted about spending in Pradhan Mantri grams going down by 30%. So you are referring to which period.
Shubhabrata Saha
Last couple you’re talking about 24 and 25.
Shubhabrata Saha
And I had put that very clearly during my initial conversation. The PMJSY length of road construction between 24 and 25. FY24 and FY20.
Mayank Bhandari
Okay. Okay. And like. So there’s not much visibility around that for next two years or how is it?
Shubhabrata Saha
I can’t comment on what will happen in the last two years but very clearly this is data from the past which has had some kind of an impact in terms of the absolute quantum of work available with contractors.
Mayank Bhandari
Okay, okay. So just one thing, one clarification. If I see one data and if I see July month data we are seeing very sharp fall in July month for as well as for the transport category of construction vehicle which is, I mean even yui it is declined by almost 50% kind of. So we’ll be able to comment on that for the July month.
Shubhabrata Saha
Q1 was a special quarter and I’m using the word special quarter in literally. See in ordinarily you will have a. Time lag when you do your first sale which is a wholesale from us to the dealers. And the final registration of the machine. In this quarter it had the registrations. Of what happened in Q4. So let’s say the March vehicles for sure the Registration happened in Q1 this year and then given the regulations are. Coming through, Most of the CEV4 machines. Not most all actively registered within this quarter itself. That’s why you see the that the. Lag effect which is there typically experienced. In the industry is not as wider in the Q1. So Q1 had both the April, May. June, all the CEV4 machines and the. CEV4 machines which was sold previously and CEV5 machines also which were sold previously.
Mayank Bhandari
Now for the sales of CEV5 then that natural cycle of 30 to 45 days of registration time kicks in and hence that will happen over time.
Shubhabrata Saha
So I don’t think we need to have a very, let’s say excited view on the. On this particular registration number of June or Q1 given the special circumstance we and the rest of the industry was in.
Shubhabrata Saha
Okay, I was referring to the July number. I know, but that’s the reason I’m. Saying that June will have June, April. May, June and March and July will. Have only one month because CEV4 machines all would have been sold in. Ordinarily you will have those machines percolating through every month. No, now it is only CEV5 and. CEV5 whatever we have sold we see that the registrations have not happened for the full stock in any case. So that will happen over time. So once we are end of the quarter of let’s say the Q2 and then the Q2 when we publish our results you will see the number of machines etc getting more in sync with the Bahan registration as was there in, you know, previous quarters and years.
Mayank Bhandari
I see, I see. Okay, so basically registrations were front loaded in both the categories and. Thank you sir. Thank you very much.
operator
Thank you. The next question is from the line of Balasubramanyan from Arihanta Capital Markets limited Please go ahead.
Balasubramanian A
Good afternoon sir. Thank you so much for the opportunities. Sir, my first question regarding this hybrid dealer, B2B model covers eight market eight markets. How will balance channel conflict and what’s the revenue contribution target from B2B from FY26 onwards?
Shubhabrata Saha
So I think clearly the B2P in is there in only the top eight markets, number one. Number two, typically these buyers are substantially larger and they typically would like to deal with the company directly. Right. The third facet is that our dealers provide the installation, the support services whenever and wherever there is required. So there is no real conflict of interest in those areas because these are customers that would want to deal directly with the company. As far as the rest of the customer base is concerned, clearly that there is enough opportunity for the dealers to take advantage of.
So there is no real conflict of interest between the two channels that we have.
Balasubramanian A
Okay, sir. Some exports around 5 percentage of the sales which are the regions we are prioritized for scalable growth. Example, Africa, Russia. And secondly, 3D concrete printers and slip foam pavers are niche innovations. What are the revenue contributions and how they are scalable?
Shubhabrata Saha
Okay, so since you asked about exports first, clearly our markets are South Asia, Southeast Asia, Africa, Middle East, Central America, Caribbean, etc. The progress across those markets will continue. You also mentioned about Russia, because that’s the market where we sold our favors.
Shubhabrata Saha
Right?
Shubhabrata Saha
And that was last year. So our focus across these geographies will continue to happen. We are living in a world order where the current the country risk and the currency risk is something that we need to continuously evaluate when we do business. We’ve seen in the past that when we identify strategic markets, the markets don’t turn out to be as strategic as we would like them because of the nature of the world economics and geopolitics around us. So we are very clear that we don’t take either current risk or country risk and look at suitable opportunities when we do the business from an export standpoint.
So that’s the first part. As far as pavers is concerned, clearly we are on a continuous lookout on opportunities to do paver business on a slightly more consistent basis as time goes along. So we would definitely like to report back whenever that arises. As far as 3D printing opportunity is concerned. Again, I think our products are well received. The project that we did with one of India’s largest engineering companies was also very well received. I think this will see its own inflection point as time goes along. And as you know that Ajax school of concrete is working extensively in the area of material science.
We’re trying to out quite a few things. Incidentally, it is quite possible that when we inaugurate our Bosahalli plant, you might see a structure which is made out of our own 3D printed piece. So that will be the most efficient way of discussing proof of the pudding, so to say.
Balasubramanian A
Got it. Sir, thank you.
operator
Thank you. The next question is from the line of Rahul Kumar from Vikarya. Please go ahead.
Rahul Kumar
Yeah, hi.
Rahul Kumar
So the question is how much of the cost increase of this transition from.
Rahul Kumar
CEV 3 to 5 and 4 to 5 has been passed to the end consumers.
Shubhabrata Saha
I think we spoke at length on this. At this point in time, given both the machines were there in the market in Q1 and also in Q4 when we launched our first lot of CV. The pricing shift has not started to happen in the manner which we expect. We will look at it towards the end of Q2.
Rahul Kumar
Okay.
Rahul Kumar
Okay. And second question is again, I’m sorry if you have already answered this but what percentage of your sales was CEV5 this quarter?
Shubhabrata Saha
The question was answered but happy to repeat it. We had 310 crores of CEV5 sales and CEV4 sales were 25. So 90 10.
Rahul Kumar
Okay. Okay, thank you. Thank you.
operator
Thank you. The next question is from the line of Nidhi Shah from ICICI Security. Please go ahead.
Nidhi Shah
Yes, thank you so much for taking my question. While we have discussed, you know, the possibility of a question, I just wanted.
Nidhi Shah
To know other than.
operator
We are unable to.
Rashi Chopra
Your voice is kind of coming in and out. We are unable to hear you clearly. If you can just repeat your question.
Nidhi Shah
Am I audible now?
operator
Yes, better please.
Nidhi Shah
Yeah. So while we have discussed, you know, the possibility of a price Raika at length, I just wanted to understand that other than the customer appetite and you know, our input cost, what other factors would we be looking at when we would be deciding the price hike strategy? That is. That’s my first question.
Shubhabrata Saha
We have to also see how the competition is. Right. We are selling at a premium. Subho mentioned it in one of the questions asked him. And if the competition, for whatever reason and we have seen bizarre behavior in the first quarter, we don’t anticipate the competition to behave in the same way but in a situation they do, we will also be mindful as to how much of price delta we have versus our competition and that will drive certain decisions at our end. So it will be a balanced approach and then we will see where it lands. That’s going to be a driver for sure.
Shubhabrata Saha
Secondly, you mentioned that 90% of our sales in Q1 were coming from the CEV5. So I wanted to understand what was, you know, what were some of the reasons why this happened is that because we had lower inventory of CEV4 on, on our end as the customer would prefer to stick with assets and move to another player for Their need Or is it that CV5 was from our end coming, I took the same price that Kobly CV4. So what was, you know, from your understanding what. What led to the fact that we were able to make 90% of our sales CV5 regardless of the fact that the deadline was actually in June.
Shubhabrata Saha
I think we have to kind of go back to Q4. Q4 already 30% was sold of CEV5. And that was done with a strategic view that we get into the market earlier. The customers and the end consumers start to experience the machine. And that obviously allowed US to push CEV5 also with equal earnest in Q1. And that contributed of course, let’s say the stickiness with the customer because they trusted the machine, they’ve seen the machine in action. And of course our customers also go with the brand name which has been created over years. So combination, combination of these two resulted in CV5 being the dominant machine.
Nidhi Shah
All right. Thank you so much.
operator
Thank you. The next question is from the line of Raghunandan from Nuama Research. Please go ahead.
Rahul Kumar
Thank you. Sir, again one question. On other expenses there was a dip of 17%. Yoyo, what factors led to this decline? Any cost saving benefits which can be sustained.
Shubhabrata Saha
So Raghu, in Q1 of FY25 we.
Shubhabrata Saha
Had let’s say a one time expense on certain business promotional activities which in Q1, FY of 26 we do not have. If needed to have a separate specific business promotion, we will do it on the merits of his business case. But in Q1, FY26 we didn’t feel that there is a need for it. Hence we have not spent the money. Whether it’s sustainable or not. I think in the Q2 after Q2 we will definitely be able to tell whether we need to spend this secularly or not this year.
Raghunandhan NL
Sure, sir. Thank you.
operator
Thank you. The next question is from the line of Rashi Chopra from Fitigroup. Please go ahead. Hello Rashi, your voice is not audible.
Rashi Chopra
Can you hear me now? Yes, it’s okay. Yes, Rashi, So just a couple of questions on the cost side. You’ve taken the hit on gross margins now. But are there any incremental costs beyond this for the transition or is this something that we’re going to work with at a constant?
Shubhabrata Saha
I think because of transition.
Shubhabrata Saha
Answer is no, Rashi. I think we have maintained that it will be in the range of 400 basis points. It’s in that range. So there is no, no change which we expect because of the transition. The commodity pricing of course is an impact which we can’t foretell and I will not like to speculate on it. But if that changes that can have a bearing but that is not because of transition. That would have probably had an impact even outside transition.
Rashi Chopra
Right. And in order for you to kind of recover the market share would you need to go back to like additional expenses like you did last year in terms of branding, marketing, etc.
Shubhabrata Saha
Well at least we have not spent.
Kurupanchu
That money in Q1.
Kurupanchu
And Shubho mentioned that July we are already back at 75 plus percentage. So hopefully let’s say actions on the ground should push it through. But if there is something which specific which we need to do to increase customer engagement and entrenchment, we will take that business call based on the specific matrices as well that time.
Rashi Chopra
Understood.
Rashi Chopra
And just last what it’s important for. Sorry Rashi. It’s important for the activity level as far as project execution on ground is.
Shubhabrata Saha
Concerned to come back stronger.
Shubhabrata Saha
As much as we expect cash flows to the contractors to be provided in certain cases, the overdues in certain cases on time.
Rashi Chopra
Understand? Okay. And cash balance as of June.
Shubhabrata Saha
Cash balance as of June we have. I mean the investment portfolio was about 650 crores and we had about 30 crores which was in sweeping account.
Rashi Chopra
Okay, thanks.
operator
Thank you. The last question is from the. The last question is from Kurupanchu from Think Wise Wealth. Please go ahead.
Kurupanchu
Yeah, thank you for the opportunity. Just a few data keeping questions. So could you give us the volume figures for CE5 and CE4 SLCM machines? And also in the non SLCM mix you mentioned that batching plant and transit mixers was majority of our mix. But even for that could you break it top please in revenue and volume terms. Thanks.
Shubhabrata Saha
So as we have disclosed previously we will not give segmental volumes for the non slcm. This is not an identified KPI by the company. So we will report it the way we are doing it for as part of our earning presentation on the CV5. CV4 I can lay out the volumes. CV5 we sold 883 machines and CEV 493.
Kurupanchu
Okay, thank you.
Shubhabrata Saha
Thank you.
operator
Thank you ladies and gentlemen. Due to time constraints we will take that as the last question. I now hand the confidence over to management for closing comments.
Shubhabrata Saha
Thank you all for joining us on today’s call. We hope that we’ve been able to address all your questions. For any further queries or clarifications please feel free to connect with us or SGA which are our investor relations partner. Thank you once again.
Rashi Chopra
Thank you. Ladies and gentlemen, on behalf of Ajax Engineering Limited, that concludes this conference. Thank you for joining us. And you may now disconnect your lines.