Jash Engineering Limited — Q2 FY26 earnings call

Call held 14 Nov 2025

Management summary

Jash Engineering reported a 12% YoY revenue growth in H1 FY26, reaching INR 293 crore, but faced significant margin pressure due to US tariffs and specific low-margin projects. The company revised its FY26 revenue and PAT guidance downwards, acknowledging global slowdowns and execution challenges. However, management remains confident in its long-term strategy, focusing on geographic and product diversification through acquisitions and capacity expansions in India, the US, and Saudi Arabia, aiming for INR 1000 crore revenue by FY27.

Highlights

  • H1 FY26 revenue reached INR 293 crore, marking a 12% YoY growth.

  • Consolidated order book stands at INR 890 crore.

  • FY26 revenue guidance revised to INR 825-850 crore, down from an initial INR 860 crore.

  • FY26 PAT guidance revised to INR 75-80 crore, down from an initial INR 100 crore.

  • H2 FY26 revenue is projected at INR 530 crore, with an expected profit of INR 75-85 crore.

  • Targeting INR 1000 crore revenue by FY27.

  • Planned Capex of INR 60-70 crore for FY26 in India, alongside investments in Houston (USD 4.5-5 million) and Saudi Arabia (USD 3-4 million).

  • Strategic acquisitions of WesTech (industrial process equipment) and Penstock UK (strengthening UK market) are underway.

Concerns

  • Tariff implications on US exports and overall margins.

Key financials

2 periods

Headline

  • Consolidated Order Book
    ₹890 Cr

H1

  • FY26 Revenue
    ₹293 Cr
    YoY +12%

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.

Guidance & targets

Revenue

  • FY26 Revenue Revenue · FY26 · Medium confidence INR 825-850 crores

    Previously INR 860 crores → INR 825-850 crores

    We feel INR825 crore should be okay in case of INR825 crore, we have not included the additional revenue which will come from the acquisition of WesTech as well as from Penstock UK. Both these are expected to happen sometime in December or January. If it happens in December, originally, we will be able to add certain contribution from there, based on which we may touch INR840-850 crores, but as of today INR825 crore is what we are targeting.

    — Mr. Pratik Patel, Chairman & Managing Director

  • H2 FY26 Revenue Revenue · H2 FY26 · High confidence INR 530 crores
    In the second half, we are expecting to achieve INR530 crore, which is like 1.8 times of what we have achieved in the first half.

    — Mr. Pratik Patel, Chairman & Managing Director

  • FY27 Revenue Revenue · FY27 · High confidence INR 1000 crores
    we should be able to be found on our targeted revenue milestone of INR1000 crore by FY27.

    — Mr. Pratik Patel, Chairman & Managing Director

  • Waterfront UK Revenue Revenue · in 4 years · High confidence 10-12 million
    Our target is very clear, we like to take Waterfront to 10-12 million revenues in 4 years' time.

    — Mr. Pratik Patel, Chairman & Managing Director

Profitability

  • H2 FY26 Profit Profitability · H2 FY26 · Medium confidence INR 75-85 crores
    However, it will still be in the range of INR75-85 crore, and I think we will still post relatively good results.

    — Mr. Pratik Patel, Chairman & Managing Director

  • FY26 PAT Profitability · FY26 · Medium confidence INR 75-80 crores

    Previously INR 100 crores → INR 75-80 crores

    We have given a guidance that at the level of INR860 crore, we are expecting around INR80 crore as PAT reduction from INR100 crore to INR80 crore because of all these tariff issues.

    — Mr. Pratik Patel, Chairman & Managing Director

Capex

  • India Capex Capex · this year (FY26) · High confidence INR 60-70 crores
    In unit one, unit two and unit three together, we are going to invest close to INR60-70 crores in this year, so that we have capacity in house for production and achieve revenue of INR1000 crore.

    — Mr. Pratik Patel, Chairman & Managing Director

  • Houston Plant Investment Capex · last year (funds raised) · High confidence USD 4.5-5 million
    So, for Houston, we have already raised funds last year, if you are aware. So, Houston investment we are targeting between USD 4.5-5 million of which most of the fund has been secured already.

    — Mr. Pratik Patel, Chairman & Managing Director

  • Saudi Arabia Plant Investment Capex · High confidence USD 3-4 million
    In Saudi Arabia, we are talking of USD3-4 million we are not talking of huge sum.

    — Mr. Pratik Patel, Chairman & Managing Director

Product Development

  • New Products Developed Product Development · every year · High confidence 5-6
    The target is to have 5-6 new products being developed every year.

    — Mr. Pratik Patel, Chairman & Managing Director

Margin

  • EBITDA Margin Margin · long term · High confidence 22-25%
    have EBITDA between 22-25% and PAT between 10-14% that is what we are aiming at, and I am quite confident that we will be able to achieve that.

    — Mr. Pratik Patel, Chairman & Managing Director

  • PAT Margin Margin · long term · High confidence 10-14%

    — Mr. Pratik Patel, Chairman & Managing Director

Market Share

  • Indian Business Revenue Mix Market Share · in time to come · Medium confidence 35%
    In time to come as I said, I want UK, which is within Europe and Africa, to grow more stronger and have something like 35% Indian business, 30% US, 15% from Europe, and 15-20% from rest of the world.

    — Mr. Pratik Patel, Chairman & Managing Director

  • US Business Revenue Mix Market Share · in time to come · Medium confidence 30%

    — Mr. Pratik Patel, Chairman & Managing Director

  • Europe Business Revenue Mix Market Share · in time to come · Medium confidence 15%

    — Mr. Pratik Patel, Chairman & Managing Director

  • Rest of World Business Revenue Mix Market Share · in time to come · Medium confidence 15-20%

    — Mr. Pratik Patel, Chairman & Managing Director

Risks & concerns

  • Tariff implications on US exports and overall margins.

    high

    Tariffs have prevented dispatch of higher-margin materials to the US, impacting H1 profitability, though legal efforts are underway to challenge duties on specific products.

    Management acknowledged

  • Global slowdown in capital investments and project deferrals.

    medium

    Unease due to tariffs and funding issues in many countries has slowed down projects, leading to delivery delays and impacting current year's revenue targets.

    Management acknowledged

  • Execution challenges and design issues leading to low/negative margins on specific projects.

    medium

    Specific projects, like screw generator projects due to design issues and the Kansas project due to execution challenges in the US, have resulted in lower margins or losses.

    Management acknowledged

  • Increased employee costs impacting profitability.

    medium

    Employee costs in India and the US have risen as a percentage of turnover, negatively impacting H1 profitability.

    Management acknowledged

  • Labor availability and operational challenges at the Orange plant.

    medium

    Management described getting labor near the Orange plant as a 'nightmare' and a 'difficult' situation, despite plans for expansion.

    Management acknowledged

Areas of evasion (1)

  • specific current profitability of WesTech before acquisition

Q&A highlights

3 direct
Impact of tariffs on order dispatches and strategy for existing orders. Direct
We tried in the beginning. Now we are fed up, and we are sending the material because we cannot delay too much, the clients are waiting for it. So now we have to take up little bit and absorb the losses and send the material.

Clarifies management's decision to proceed with dispatches for existing orders despite tariff-induced losses, indicating a shift from holding back.

Asked by Kunal

Recurrence of low/negative margin orders and risk management strategies. Direct
Every time we make a mistake, we try to learn from it and ensure that we don't make a mistake. But as the company is growing, sometimes decisions happen in which people go by their confidence and at a later date it is proved that they were wrong. We try to correct as much as possible... NPCIL where we lost lot of money, it was a strategic gamble you must be reading in the newspaper in India lot of nuclear power projects are going to come.

Addresses investor concerns about recurring margin hits, attributing them to specific project issues (design, execution challenges in new markets like Kansas) and strategic gambles (NPCIL), and outlining learning.

Asked by Sahil Desai

Rationale for new plants in Houston and Saudi Arabia, and associated initial operational costs. Direct
If I don't put up a new plant in Houston, in this current environment of Trump administration, where they want us to make it in America then I will have to forego all the American business in future. Can I do that as a company? No. So I have to set up a plan. But if I set up a plant, the initial cost would be high, which will then taper down as the production starts coming out.

Explains the strategic necessity of local manufacturing despite initial costs and challenges, particularly for the US market under current trade policies, and for new markets like Saudi Arabia.

Asked by Dilip Sahu

2 min read 6 chapters

Detailed narrative

H1 FY26 Performance and Margin Pressure

Jash Engineering reported H1 FY26 revenue of INR 293 crore, achieving a 12% year-on-year growth. Despite this revenue growth, bottom-line performance was significantly impacted. This was primarily due to tariffs preventing the dispatch of higher-margin materials to the US and specific projects incurring 'stretch low margins' because of design issues. Additionally, increased employee costs in both India and the US, as a percentage of lower-than-expected turnover, further eroded H1 profitability.

Impact of Tariffs and Mitigation Strategies

The company is grappling with substantial tariff implications, particularly affecting its US exports and leading to the absorption of losses on existing orders. Management noted that legal counsel in the USA suggests no duty should apply to casta and gate products, potentially allowing for claims on past tariffs paid. To reduce dependence on the US market and mitigate future tariff risks, Jash is actively strengthening its presence in the UK and exploring new international markets.

Strategic Acquisitions for Diversification and Market Penetration

Jash is strategically expanding its global footprint through acquisitions. The company is acquiring Penstocks (UK) Ltd. to bolster its position in the UK market, leveraging Penstock's location in Midlands and existing framework agreements. Concurrently, the acquisition of WesTech, an industrial process equipment business with strong technology and an estimated INR 55 crore revenue last year, is expected to significantly enhance Jash's process equipment segment and export potential.

Capacity Expansion and New Market Entry

To support future growth, Jash plans a capital expenditure of INR 60-70 crore in FY26 for capacity expansion across its Indian plants (Unit 1, 2, and 3). Furthermore, the company is investing USD 4.5-5 million in expanding its Houston plant and USD 3-4 million for a new plant in Saudi Arabia, slated for establishment by mid-2027. These initiatives aim to localize production, address specific market demands, and achieve a targeted revenue of INR 1000 crore by FY27.

Revised FY26 Guidance and Long-term Outlook

Jash Engineering revised its FY26 revenue guidance downwards from an initial INR 860 crore to INR 825-850 crore, citing tariff uncertainties and project delays. The FY26 PAT guidance was also adjusted from INR 100 crore to INR 75-80 crore. Despite these revisions, management anticipates a strong H2 FY26, projecting INR 530 crore in revenue and INR 75-85 crore in profit. The company maintains a long-term target of 22-25% EBITDA margin and 10-14% PAT margin, reflecting confidence in its strategic direction.

Product and Geographic Diversification Strategy

The company's long-term vision emphasizes a diversified product portfolio and global market presence. Jash aims for a future revenue mix of 35% from India, 30% from the US, 15% from Europe, and 15-20% from the rest of the world. Annually, the company targets the development of 5-6 new products, including high-pressure knife gate valves for Canadian oil sands and HDPE valves for chemical industries, to sustain its competitive advantage and cater to evolving market needs.

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