Jinkushal Industries Limited — Q2 FY26 earnings call

Call held 29 Oct 2025

Management summary

Jinkushal Industries reported strong profitability in H1 FY26, with PAT growing 89% to ₹11 crores and EBITDA margin expanding to 9%. This was achieved despite flat top-line growth, driven by a focus on efficiency, margin expansion, and increased sales of higher-margin used/refurbished equipment and the proprietary HexL brand. The company also significantly strengthened its balance sheet and liquidity post-IPO, positioning for future global expansion and a target of ₹800 crores revenue in 2-3 years.

Highlights

  • PAT increased by 89% to ₹11 crores in H1 FY26 compared to ₹5.7 crores in H1 FY25.

  • EBITDA margin expanded to 9% in H1 FY26 from 4.8% in H1 FY25, reflecting improved profitability.

  • Debt-to-equity ratio significantly improved to 0.36x in H1 FY26 from 0.63x in March 2025, indicating a stronger balance sheet.

  • Current ratio stood at 2.56x, up from 1.99x in March 2025, demonstrating a strong liquidity position.

  • HexL brand contributed 11% of total revenue in H1 FY26 with 72 units sold, showing successful strategic expansion and recurring revenue potential.

Concerns

  • Top-line growth remained steady at ₹121.6 crores in H1 FY26 compared to ₹119.6 crores in H1 FY25, indicating flat revenue growth.

  • Management acknowledged a 'global market fluctuation situation' which required actions to offset, suggesting external headwinds.

  • Rapid revenue growth in FY25 (₹240cr to ₹380cr) led to 'margin pressures', indicating potential trade-offs between growth and profitability.

Key financials

  1. Turnover ₹121.6 Cr +1.7%YoY
  2. EBITDA ₹16.2 Cr +57.3%YoY
  3. EBITDA Margin 9%
  4. PAT ₹11 Cr +93%YoY
  5. Debt-to-Equity Ratio 0.36×
  6. Current Ratio 2.56×

What they filed

Q1 FY27: revenue up 15.9%, net profit down 66.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue70 183 78 49 73 +4%44 −76%192 +146%57 +16%
EBITDA2 13 3 5 7 +259%-9 −166%13 +295%-1 −115%
Net profit2 12 1 7 4 +170%-10 −180%12 +1045%2 −66%
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

  • New Equipment (Other Brands)
    ₹51 Cr Sales2% PAT Margin
  • Used & Refurbished Equipment (Other Brands)
    ₹54.5 Cr Sales12% PAT Margin
  • HexL Brand
    ₹13.5 Cr Sales12% PAT Margin (Target)
  • Backhoe Loaders
    40% Share of Total Sales
  • Mexico
    50% Share of Total Sales
  • UAE
    28% Share of Total Sales
  • South Africa
    8% Share of Total Sales

Order book

low confidence
The company primarily operates on a sales and distribution model for construction equipment, including new, used/refurbished, and its own HexL brand, rather than a traditional project-based order book.

Source: Inferred

Capital allocation

high confidence
  • Debt Debt disclosed
    On the balance sheet front, debt-to-equity ratio improved significantly to 0.36x down from 0.63x as of March 2025. Current ratio stood at 2.56x, reflecting a strong liquidity position and increased from 1.99x as of March 31, 2025. Sales from our proprietary brand, HexL, accounted for approximately 11% of total revenue during the first half of FY'26, with a total of 72 units sold till date. This reflects a significant increase from the previous period, primarily driven by the successful launch of HexL backhoe loaders.
  • Liquidity Liquidity disclosed Current ratio stood at 2.56x, reflecting a strong liquidity position and increased from 1.99x as of March 31, 2025. The successful IPO has fortified our balance sheet and broadened our financial flexibility, building on the extraordinary 38-fold top-line growth of the past seven years. More working capital available post-IPO.
    On the balance sheet front, debt-to-equity ratio improved significantly to 0.36x down from 0.63x as of March 2025. Current ratio stood at 2.56x, reflecting a strong liquidity position and increased from 1.99x as of March 31, 2025. Sales from our proprietary brand, HexL, accounted for approximately 11% of total revenue during the first half of FY'26, with a total of 72 units sold till date. This reflects a significant increase from the previous period, primarily driven by the successful launch of HexL backhoe loaders.

Guidance & targets

Revenue

  • Total Revenue Revenue · next two or three years · Medium confidence ₹800 crores
    We are committed to expanding our global presence, strengthening brand equity, and creating long-term shareholder value, with an aspiration to cross around Rs. 800 crores of revenue in the next two or three years.

    — Abhinav Jain

  • HexL Turnover Revenue · right away · Medium confidence ₹300-400 crores
    So, from zero HexL sales currently, we can have about 1,000 HexL machine sales, which will add to about Rs. 300 crores, Rs. 400 crores of turnover right away, which is zero right now.

    — Abhinav Jain

Profitability

  • PAT Growth Profitability · near-term · High confidence more than turnover growth
    But the sharpest focus of ours remains on PAT growth more than turnover growth.

    — Abhinav Jain

  • PAT Margin Profitability · ongoing · High confidence 7% to 9%
    Well, 7% to 9% PAT margins is where we stand and this is the range that we ideally target and the growth stage company with vision to grow multiple fold in the coming years with penetration in the global market, increasing our revenue in top-line will definitely also be needed and we cannot just enjoy higher PAT percentage margins at a lower turnover base. So, we have to balance it out. And I would say, the range of 7% to 9% is where we are comfortable with, with absolutely zero CapEx involvement, I believe that is a PAT percentage level which gives us the real comfort.

    — Abhinav Jain

  • PAT CAGR Profitability · next three years · Medium confidence 35% to 40%
    Ultimately, what we focus on is how much money reaches home. And 35% to 40% of CAGR on PAT level is what we really intend to grow at in the next three years, on an absolute basis.

    — Abhinav Jain

Growth

  • Overall Growth Growth · next seven years · Medium confidence 8x to 10x
    And in the next seven years, of course, the whole purpose of IPO incremental working capital efforts and the launch of our own brand is focused on the used and refurbishment sector as well. And given the fact it's a Rs. 10 lakh crores market, we definitely aspire to be growing 8x to 10x, I would say, from our previous financial year in the next seven years.

    — Abhinav Jain

Distribution

  • HexL Distributors Distribution · ongoing · High confidence 50 globally
    But the entire aim is to achieve 50 distributors of HexL globally as opposed to currently 60 or 70 odd B2B customers that we have globally.

    — Abhinav Jain

Taxation

  • Steady State Tax Rate Taxation · ongoing · High confidence 20-25%
    Subsidiaries in Dubai and in the U.S., right? So, because of that addition of the subsidiaries, and Dubai has a different taxation than India, which is why you are able to see the differentiation in tax rates. Currently we do not really see any, unless the taxation changes in these countries, I do not see any reason to have the tax rate change. ... No, I mean, so it would be 20%, 25%, right? I mean, on a steady state basis. Yes, yes. I think so.

    — Abhinav Jain

What to watch in Q3 FY26

HexL Brand Revenue Contribution

next quarter
Current 11% of total revenue in H1 FY26
Target Increased share of total revenue

Why it matters

HexL is a key strategic growth driver and a focus area for future profitability.

A major focus area for us this year has been the strategic expansion of our HexL brand. HexL represents our vision of delivering world-class cost-effective equipment design as per global top standards and built for emerging markets.

Risks & concerns

  • Global market fluctuations

    medium

    A global market fluctuation situation was acknowledged, but management stated actions were taken to offset its impact on margins.

    Management acknowledged

  • Margin pressure during rapid growth

    low

    Rapid top-line growth in FY25 led to margin pressures, but the company has since refocused on profitability, improving PAT margins in H1 FY26.

    Management acknowledged

Q&A highlights

7 direct
Business scaling challenges and differentiation post-IPO Direct
We are the largest non-OEM exporter of construction equipment in the country, and we are a global company focusing on global markets. After the IPO proceeds, our objectives are to increase our top-line and bottom-line both in each of the product segments and categories that we cater to, and especially strengthen our brand HexL.

Clarifies the company's unique position as a non-OEM exporter and outlines strategic priorities for IPO proceeds.

Asked by Harsh M

Reason for margin decrease in FY25 and target PAT margins Direct
The top-line in March '24 was about Rs. 240 crores and the top-line in March '25 was about Rs. 380 crores, so such rapid increase in revenue and top-line growth was achieved due to the push that we did in the key markets... And in the current half year ended 30 September 2025, we have again pushed back on the profitability and margin percentage side. And from about 5% earlier, we are at about 9% to 10% on a PAT level margin basis.

Explains past margin pressure as a result of aggressive growth and highlights the current shift back to profitability focus with specific PAT margin targets.

Asked by Harsh M

HexL brand sales contribution and manufacturing model Direct
In March H1 '25, we had about eight machines sold of HexL, our own brand. And in H1 2026 basically September 2025 we have about 35 machines sold of our HexL brand... we do not import the HexL brand, we just get it contract manufactured from China and then sell it aboard to various countries all across the world.

Provides specific growth numbers for the HexL brand and clarifies its asset-light, contract manufacturing and direct export model.

Asked by Harsh M

Impact of product mix shift on margins (refurbished vs. own brands) Direct
We have actually increased our used and refurbished machine sales... Because on used and refurbished machine sector we earn about 12% to 14% on a PAT level basis and on other brand sector we earn a lower value than that... So, the profit has grown while the turnover has not because the used and refurbished machine sales has increased.

Explains the driver behind margin expansion despite flat revenue, attributing it to a favorable shift towards higher-margin used/refurbished sales.

Asked by Vignesh Iyer

HexL brand's USP and competitive pricing Direct
Our sales price is lower than our peers. But also the most important aspect is our spare parts cost is very, very low than our peers, because total cost becomes extremely low. And at the same time, feature rich and latest technology AI enabled machines... I would say 40% is the price difference when you compare apple-to-apple similar configuration, similar specs machine of any other popular brand.

Details the competitive advantages of the HexL brand, focusing on lower total cost of ownership through competitive pricing and affordable spare parts.

Asked by Raaj Macwan

Confidence in achieving ₹800 crores revenue target and capital requirements Direct
Having these numbers in March '25 with Rs. 380 crores in the last year with a lesser capital availability and with incrementally extra liquidity available with us, I do not really see a problem for us to achieve Rs. 800 crores of revenue in the next three years. For achieving Rs. 800 crores of revenue, we need about Rs. 300 crores or Rs. 350 crores of working capital overall, including equity, including working capital limits that we have from the bank.

Provides insight into the financial strategy and capital needs to achieve ambitious revenue targets, linking IPO proceeds and bank lines to growth.

Asked by Raaj Macwan

Domestic market opportunity for HexL Direct
Well, we are a global company, global market size is of around Rs. 10 lakh crores, and since we do earnings in dollars so it is promoted by the Government of India, it always gives you better margin because the cost of labor is cheaper in India. So, we are currently exporting our trust and engineering expertise from India. And when we are a globally large enough company, we will see India as one of our markets as well when we are that size. But currently we are focusing to cater the global demand, there's higher profitability like any other export business.

Explains the strategic rationale for prioritizing global markets over the domestic market due to higher profitability and export incentives.

Asked by Mangesh Kulkarni

3 min read 6 chapters

Detailed narrative

Company Overview and Strategic Positioning

Jinkushal Industries, rooted in a five-decade family legacy in mining and construction, has evolved into India's largest non-OEM exporter of construction machines, with a footprint across 35 countries. The company operates through an integrated multi-vertical business model, encompassing exports of new and customized machines, used and refurbished machines, and its proprietary HexL brand. This structure allows catering to diverse customer needs, from large infrastructure contractors to equipment rental companies, offering varied price points and performance standards.

Financial Performance H1 FY26

For the six-month period ended September 30, 2025 (H1 FY26), Jinkushal Industries reported a turnover of ₹121.6 crores, a slight increase from ₹119.6 crores in H1 FY25. EBITDA significantly increased to ₹16.2 crores from ₹10.3 crores in H1 FY25, with margins strengthening from 4.8% to 9%. PAT saw an impressive 89% growth, reaching ₹11 crores compared to ₹5.7 crores in the prior year. This improvement in profitability, despite steady top-line, reflects a strategic focus on efficiency and margin expansion.

Balance Sheet Strength and Liquidity

The company's balance sheet showed significant improvement, with the debt-to-equity ratio reducing to 0.36x in H1 FY26 from 0.63x as of March 2025. The current ratio also improved to 2.56x from 1.99x as of March 31, 2025, indicating a strong liquidity position. Management highlighted that the successful IPO fortified the balance sheet and provided enhanced financial flexibility, with more working capital available to support future growth initiatives.

HexL Brand Expansion and Product Mix

The HexL brand is a major focus area, contributing approximately 11% of total revenue in H1 FY26, with 72 units sold to date. This marks a significant increase from 8 units sold in H1 FY25. Backhoe loaders have become the highest-selling product, accounting for nearly 40% of total sales in H1 FY26, up from 25% last year. The remaining revenue is almost equally derived from new, customized equipment of other brands (₹51 crores) and used/refurbished equipment (₹54-55 crores). The average selling price of used equipment has increased due to improved product mix and stronger demand.

Global Market Strategy and Profitability Drivers

Mexico remains the largest revenue-contributing market at nearly 50% of total sales, followed by UAE at 28% and South Africa at 8%. The company maintains an asset-light approach, partnering with global manufacturers for contract production and refurbishment, while operating a 30,000 sq ft in-house facility in Raipur. The increase in profitability is partly attributed to a higher contribution from used and refurbished machine sales, which yield 12-14% PAT margins, compared to 2-4% for new equipment of other brands. HexL brand is targeted for 12-15% PAT margins.

Future Outlook and Growth Targets

Jinkushal Industries aims to cross ₹800 crores in revenue within the next two to three years, with a sharp focus on PAT growth over turnover growth. The company targets PAT margins of 7-9% and a CAGR of 35-40% on PAT level over the next three years. Long-term aspirations include 8x to 10x growth in the next seven years. Strategic initiatives include expanding the HexL brand globally, aiming for 50 distributors, and leveraging IPO proceeds for increased working capital and business development.

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