Jash Engineering Limited — Q1 FY26 earnings call

Call held 8 Aug 2025

Management summary

Jash Engineering reported a mixed Q1 FY26, with consolidated revenue growth but a decline in standalone performance and increased losses at Rodney Hunt, primarily due to US tariff uncertainties and deferred deliveries. The company maintains a strong consolidated order book of ₹875 crores and is actively pursuing capacity expansion in the US and strategic acquisitions to mitigate tariff risks and drive future growth, targeting ₹860 crores in combined revenue for FY26.

Highlights

  • Consolidated revenue increased to ₹133 crores in Q1 FY26, up from ₹116 crores YoY.

  • Standalone Jash Engineering revenue declined to ₹82 crores from ₹92 crores YoY.

  • Consolidated order book remains strong at ₹875 crores as of August 1, 2025.

  • Rodney Hunt reported a Q1 loss of $0.9 million, an increase from $0.8 million last year.

  • Profit Before Tax (PBT) deteriorated from a minor loss of ₹0.4 crores last year to a loss of ₹6 crores this quarter.

  • US tariff on steel and stainless steel increased to 50%, impacting existing fixed-price orders.

  • New Houston plant planned for completion in 2026 to mitigate tariff risks and increase US output.

  • Acquisition of 90% stake in WesTech (₹55 crore revenue, ₹4 crore profit) expected by next month.

Concerns

  • US Tariff Uncertainty

Key financials

  1. Consolidated Revenue ₹133 Cr +14.6%YoY
  2. Consolidated PBT ₹-6 Cr
  3. Standalone Jash Revenue ₹82 Cr -10.9%YoY
  4. Rodney Hunt Q1 Loss 0.9 million $
  5. Waterfront Loss ₹0.4 Cr
  6. Consolidated Order Book ₹875 Cr

What they filed

Q1 FY27: revenue up 17.5%, net profit up 198.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue140 181 300 128 158 +13%161 −11%291 −3%150 +17%
EBITDA25 41 59 -4 20 −17%17 −58%69 +17%8 +297%
Net profit16 35 36 -5 11 −32%13 −62%57 +58%5 +198%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Revenue Composition
    69% Water Control Gates14% Screening10% Valve7% Hydro Power
  • Geographical Contribution
    42% India37% USA20% Rest of World

Guidance & targets

Revenue

  • Combined Revenue Revenue · FY26 · High confidence ₹860 crore
    If you remember, at the beginning of the year, I had said that we are looking for combined revenue of Rs.860 crore, which I am quite confident of achieving and also going a little bit above this.

    — Pratik Patel, Chairman & Managing Director

  • Process Equipment Division Revenue (WesTech + Shivpad) Revenue · 3 years · High confidence ₹200 crores

    Previously ₹100 crores → ₹200 crores

    We hope that with WesTech being merged with India we would be able to take the process equipment division from current Rs.100 crores to Rs.200 crores in 3 years time.

    — Pratik Patel, Chairman & Managing Director

  • Top Line Doubling Revenue · Next 4-5 years · Medium confidence 4-5 years
    It is not realistic to expect we are able to double it in next 3 years. It is not possible. It needs lot of infrastructure improvements and capability enhancement. So, selling such dream, I would say it is wrong. But yes, we do plan to double the top line in 4-5 years.

    — Pratik Patel, Chairman & Managing Director

Profitability

  • PAT Profitability · FY26 · Medium confidence ₹80-110 crore
    I gave a guidance that with Rs.860 crore revenue, our PAT profile would be within Rs.80-110 crore range, depending upon finally what happens at the tariff level.

    — Pratik Patel, Chairman & Managing Director

Capacity

  • Rodney Hunt US Plant Revenue Contribution Capacity · Coming years · High confidence 65-70%

    Previously 30-35% → 65-70%

    we have to increase our output from US plant in the revenue of Rodney Hunt from the current 30-35% to around 65-70% in the coming years.

    — Pratik Patel, Chairman & Managing Director

  • Total Production Capacity (Current) Capacity · High confidence ₹1000 crore
    With the current capacity, including all the ongoing expansions, we will be around Rs.1000 crore.

    — Pratik Patel, Chairman & Managing Director

  • Total Production Capacity (with US expansion) Capacity · High confidence ₹1300-1500 crore
    With the US expansion, this could go anywhere between Rs.1,300-1,500 crore, depending on how many shifts we are willing to operate.

    — Pratik Patel, Chairman & Managing Director

Project Completion

  • Houston Plant Completion Project Completion · 2026 · High confidence 2026

    Previously 2028 → 2026

    This plant was originally scheduled for 2028 but will now be completed in 2026.

    — Pratik Patel, Chairman & Managing Director

Acquisition

  • WesTech Acquisition Completion Acquisition · August 2025 · High confidence By next month
    The due diligence is at an advanced stage, and we hope to complete everything by next week and include this company as our subsidiary by next month.

    — Pratik Patel, Chairman & Managing Director

  • UK Company Acquisition Completion Acquisition · September 2025 · High confidence September
    another company in the UK, for which nearly the deal is done, the process of due diligence will start within August, and I would like to wind up that deal in September.

    — Pratik Patel, Chairman & Managing Director

  • Total Acquisition Cost (WesTech + UK company) Acquisition · High confidence ₹40 crore
    Acquisition, both the acquisition put together, we will be spending around Rs.40 crore

    — Pratik Patel, Chairman & Managing Director

Order Inflow

  • Monthly Order Booking Order Inflow · Every month · Medium confidence ₹50-100 crores
    I believe that our order booking would remain within the range of Rs.50-60 crores to Rs.100 crores every month.

    — Pratik Patel, Chairman & Managing Director

Capex

  • Total Capex Capex · This year · High confidence ₹40 crore
    And any capex amount guidance, sir. How much we are spending this year. Close to 40 crore.

    — Pratik Patel, Chairman & Managing Director

  • US Capex Capex · High confidence $6-6.5 million
    We may plan for $6-6.5 million capex in America, out of which we have already raised $4 million one year back.

    — Pratik Patel, Chairman & Managing Director

Order Book

  • Order Book Size Order Book · By 31 March 2026 · High confidence ₹1100 crore
    So, if this year we do Rs.860 crores and next Rs.1000-1050 crores, so we should have Rs.1100 crore order book by end of 31 March 2026.

    — Pratik Patel, Chairman & Managing Director

Risks & concerns

  • US Tariff Uncertainty

    high

    Additional 25% tariff on steel/stainless steel (total 50%) impacts existing fixed-price orders, leading to a potential $1-2 million hit on profit after tax.

    Management acknowledged

  • Labour Shortage & Key Management Issues in Orange, US

    medium

    Problems with availability of people and key management in the Orange facility, impacting production capacity and necessitating investment in Houston.

    Management acknowledged

  • Global Market Turmoil & Order Deferrals

    medium

    Order placements and overall economic activity have slowed down globally due to uncertainty, potentially leading to demand deferment.

    Management acknowledged

  • Execution Delays / Client Payment Issues

    low

    ₹28 crore worth of material dispatched but not taken in revenue due to US GAAP practice (not reaching site on last day) or client not opening LC, impacting revenue recognition.

    Management acknowledged

Areas of evasion (1)

  • Specific PAT impact due to tariffs (due to uncertainty)

Q&A highlights

3 direct
Impact of US tariffs on margins and new orders Direct
The tariff affects only the orders which we have already taken and which we are going to make in India. Tariff does not affect the new orders. The new orders we are already increasing, whatever is the tariff adding to it for India sourcing and quoting.

Clarifies that new orders factor in tariffs, but existing fixed-price orders are taking a hit, explaining margin pressure and the company's strategy.

Asked by Multiple analysts

Slowdown in order book growth and US capacity constraints Direct
See one of the biggest reason is in America. Now, my order book in America, as of today is $40 million. However, we do not have capacity to produce more than that present in America. So, I can take orders, but it would be like putting into a problem... So, one of the major reasons has been low intake of orders in America because of that.

Explains that the slowdown in order book growth, particularly exports, is a deliberate strategy due to US capacity constraints and tariff uncertainty, not a lack of demand.

Asked by Pariksit Kabra

US plant setup (foundry vs. machine shop) and BABA Act implications Direct
No, foundry in America. We have a big pressure to start the foundry, but we are not going to do it... We already have foundry in our campus, which we have closed down. Okay, sir, so there will only be like machine shop and assembly and testing unit, fabrication.

Clarifies the scope of the new Houston plant, indicating it will focus on machine shop, assembly, and testing, rather than a full foundry, which impacts capital intensity and supply chain strategy.

Asked by Kunal

3 min read 6 chapters

Detailed narrative

Q1 FY26 Financial Performance & Challenges

Jash Engineering reported a consolidated revenue increase to ₹133 crores in Q1 FY26, up from ₹116 crores in the prior year. However, standalone Jash Engineering revenue declined to ₹82 crores from ₹92 crores. Profit Before Tax (PBT) deteriorated significantly, moving from a minor loss of ₹0.4 crores last year to a loss of ₹6 crores this quarter. This decline was primarily attributed to US tariff uncertainties, which led to deferred deliveries, and increased losses at Rodney Hunt, which saw its Q1 loss rise from $0.8 million to $0.9 million.

US Tariff Impact and Mitigation Strategy

The company is facing significant pressure from the US tariff on steel and stainless steel, which recently increased from 25% to 50%. This directly impacts existing fixed-price orders from India, potentially leading to a $1-2 million hit on profit after tax. To mitigate this, Jash Engineering has accelerated plans to build a new plant in Houston, US, now expected to be completed in 2026 instead of 2028, with a planned capex of $6-6.5 million. This facility aims to increase Rodney Hunt's US-based revenue contribution from 30-35% to 65-70% in the coming years.

Strong Order Book and Market Diversification

Despite Q1 challenges, the consolidated order book remains robust at ₹875 crores as of August 1, 2025, with ₹574 crores from outside India and ₹301 crores domestically. Jash Engineering's standalone order book stands at ₹500 crores. The company is actively expanding into new markets such as Vietnam, Japan, and Israel, with plans for South Africa, aiming to maintain a healthy monthly order booking of ₹50-100 crores. Revenue composition is diversified, with water control gates at 69%, screening at 14%, valve at 10%, and hydro power at 7%.

Capacity Expansion and New Facilities

Jash Engineering has commissioned a new facility in Shivpad, which will improve output from the Chennai facility and support the upcoming WesTech acquisition. The company's current production capacity is around ₹1000 crores, with plans to expand to ₹1300-1500 crores with the US expansion. The new Houston plant will focus on machine shop, assembly, and testing, rather than a foundry, to align with the BABA Act requirements and address labour shortages in the Orange facility.

Strategic Acquisitions for Growth

The company is pursuing two key acquisitions: a 90% stake in WesTech India and another company in the UK. The WesTech acquisition, valued at approximately ₹40 crores, is expected to be completed by next month and will integrate a profitable company with ₹55 crore revenue and ₹4 crore profit. This acquisition, along with Shivpad, is projected to double the process equipment division's revenue from ₹100 crores to ₹200 crores within three years, expanding Jash's presence in industrial segments like mining, metals, and paper. The UK acquisition is expected to close by September, strengthening Waterfront's position in the UK sluice gates market.

Outlook and Long-Term Vision

Management remains confident in achieving a combined revenue of ₹860 crores for FY26, potentially exceeding it. The PAT for FY26 is projected to be in the range of ₹80-110 crores, contingent on the resolution of tariff uncertainties. The company aims to double its top line in 4-5 years, acknowledging that significant infrastructure and capability enhancements are required. They are also exploring setting up a plant in Saudi Arabia to secure orders in that region, reflecting a proactive approach to global market shifts.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Capital Goods earnings calls