Value Ajax at 26.5x Mar’27 PE (ex-other income) + cash. We use the mid point of ACE and BEML’s PE multiples (25x/28x) to value Ajax. ACE’s revenue break-up: cranes 72%, construction equipment 13%, material handling 6%, agri equipment 8%. BEML revenue break-up: mining & construction equipment is ~43%, rail & metro is ~38%, and defense is ~19%. We expect 11% revenue CAGR for Ajax (FY25-28E) vs. 11%/24% for ACE/BEML (consensus).
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Downside risks to our TP: Increase in competitive intensity, difficulty in taking price hikes, slowing demand. Upside risks: Stronger than expected demand and volumes, industry consolidation, better prices on improved demand.
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