JNK — Q1 FY26 earnings call

Call held 11 Aug 2025

Management summary

JNK India reported a 13.5% YoY revenue growth in Q1 FY26, reaching ₹1,030 million, supported by a robust order book of ₹9,828 million. However, profitability was impacted by legacy projects and project delays, leading to an EBITDA margin of 7% and PAT margin of 1.1%. The company announced a joint venture to enter the green hydrogen and sustainable fuel technology segments, holding a 51% equity stake, and maintained its full-year guidance for revenue growth and EBITDA margins.

Highlights

  • Total revenue for Q1 FY26 stood at ₹1,030 million, reflecting a year-on-year growth of 13.5%

  • Company's order book stood at ₹9,828 million as of June 30, 2025, ensuring strong revenue visibility

  • Entered into a joint venture for green hydrogen and sustainable fuel technologies, holding a 51% equity stake, expanding into clean energy process infrastructure

  • Maintained full-year guidance of 40-50% revenue growth and 12-13% EBITDA margins

Concerns

  • EBITDA margin compressed to 7% in Q1 FY26, down from 13.4% in Q1 FY25 and 13.8% in Q4 FY25, primarily due to legacy projects under execution

  • Profit After Tax (PAT) margin was 1.1% for the quarter

  • Employee cost (net of ESOP) increased by 15.5% year-on-year

Key financials

  1. Revenue 1,030 Mn +13.5%YoY
  2. Operating Profit 242 Mn
  3. Operating Margin 23.5%
  4. EBITDA 72 Mn
  5. EBITDA Margin 7%
  6. Profit Before Tax 20 Mn
  7. PBT Margin 2%
  8. Profit After Tax 11 Mn
  9. PAT Margin 1.1%
  10. Employee Cost (net of ESOP) Growth 15.5% +15.5%YoY

What they filed

Q1 FY27: revenue up 65.7%, net profit up 1300.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue103 94 189 99 178 +73%179 +90%300 +59%164 +66%
EBITDA12 7 15 3 17 +42%25 +257%42 +180%17 +467%
Net profit7 3 13 1 14 +100%18 +500%32 +146%14 +1300%
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

  • Order Book Composition
    79.4% Heating Systems12.8% Process Plants7.8% Flares, Incinerators & Other Renewables
  • Order Book Geography
    90.9% Domestic Orders

Order book

high confidence

Total value

₹9,828 Mn

as of 2025-06-30 quantified

Execution

The current order book would get executed up to quarter 1 of next financial year, that is Q1 of '27.

Composition

Mix 3 products
  • Heating systems 79.4%
  • Process plants 12.8%
  • Flares, incinerators and other renewables 7.8%

Share of order book by product

Pipeline

L1 awaiting loa

2 finalizations expected in Q2 FY26 (including BPCL Bina), potentially ₹2,000-3,000 crores from JNK Global, with JNK India getting a share. 2 more finalizations lined up for Q3 FY26.

The company has a robust order book ensuring strong revenue visibility and expects significant order finalizations in the coming quarters, with execution of the current book extending into Q1 FY27.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed
    So far as capex is concerned, I would like to inform you that there would not be any additional capex required.
  • M&A New entity with Mr. Sunil Dhole and Mr. Tushar Wagh (founders of Chemdist Group) Joint venture · Signed · Consideration ₹[object Object] (mixed)

    Enhances entry into the emerging green hydrogen segment and chemical segment, enabling JNK India to expand its offering beyond conventional combustion equipment and into clean energy process infrastructure. Provides access to international expertise, support technology, co-development and creates potential for participating in upcoming green hydrogen projects.

    JNK India will hold a 51% equity stake. Initial equity is about INR 51 lakhs and initial investment is about INR 10 crores (preference capital). Working capital support of about INR 50 crores in the first year. Expected to contribute 8-10% of JNK India's revenue in FY26, growing to 15-25% in 5 years, with 10-12% EBITDA profitability.

    JNK India will hold a 51% equity stake in the newly formed entity. ... initial equity is about INR 51 lakhs and also the initial investment is about INR 10 crores in the company. ... By way of preference capital. ... So, the extent of working capital support could be about INR 50 crores or so in the first year. ... in this financial year itself, we would see a certain amount of revenue which could be about, say, around 8% to 10% of JNK India's revenue. ... So going forward, in 2 to 3 years' time, we look forward to a revenue growth in the new company, the new JV business, which is about 10% to 15% of JNK India's revenue. And maybe up to 5 years, we can look at something like 15% to 25% of JNK India's revenue in the new JV business... The likely profitability of EBITDA could be anywhere between 10% to 12%.
  • Liquidity Liquidity disclosed Current working capital facilities can be enhanced if new orders are received.
    See, Kamlesh, current working capital facilities can be enhanced if we get the orders.

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY26 · High confidence 40% to 50%
    The guidance for the yearly growth of revenue and the EBITDA margin remains the same. What you have mentioned, we still stick to that.

    — Pravin Sathe

  • JV Revenue Contribution Revenue · FY26 · Medium confidence 8% to 10%
    So, in this financial year itself, we would see a certain amount of revenue which could be about, say, around 8% to 10% of JNK India's revenue.

    — Arvind Kamath

  • JV Revenue Contribution Revenue · 2-3 years · Medium confidence 10% to 15%
    So going forward, in 2 to 3 years' time, we look forward to a revenue growth in the new company, the new JV business, which is about 10% to 15% of JNK India's revenue.

    — Arvind Kamath

  • JV Revenue Contribution Revenue · up to 5 years · Low confidence 15% to 25%
    And maybe up to 5 years, we can look at something like 15% to 25% of JNK India's revenue in the new JV business

    — Arvind Kamath

Profitability

  • EBITDA Margin Profitability · FY26 · High confidence 12% to 13%
    The guidance for the yearly growth of revenue and the EBITDA margin remains the same. What you have mentioned, we still stick to that.

    — Pravin Sathe

  • EBITDA Margin (post legacy projects) Profitability · post Q1 FY27 · Medium confidence 13% to 15%
    And the EBITDA margin guidance that we had given of somewhere between 13% to 15%, that we can consider once these legacy projects are over.

    — Pravin Sathe

  • JV EBITDA Profitability Profitability · Medium confidence 10% to 12%
    The likely profitability of EBITDA could be anywhere between 10% to 12%.

    — Arvind Kamath

Order Book

  • Order Finalization Order Book · this financial year · Medium confidence ₹3,000 crores
    It's difficult to guide the exact number in terms of the order book, but there is an order finalization expected in this financial year, which is about, say, INR 3,000 crores or so.

    — Arvind Kamath

  • Order Book Visibility Order Book · High confidence 1.5 to 2 years
    But what we have seen in last couple of years is we've been able to have a healthy order inflow and healthy order backlog as we are going, with the visibility of around 1.5 years to 2 years kind of a revenue.

    — Arvind Kamath

What to watch in Q2 FY26

Legacy Project Impact on Margins

Q2 FY26
Current Causing EBITDA margin compression to 7% in Q1 FY26
Target Resolved, margins stabilize to 12-13% as legacy projects conclude

Why it matters

Directly impacts the company's profitability and achievement of full-year margin guidance.

The impact of higher costs related to the earlier projects is likely to continue in Q2 FY26 as well. ... this legacy order book is likely to get over by the Q2 of FY '26.

Risks & concerns

  • Margin compression due to legacy projects

    medium

    EBITDA margin compressed to 7% in Q1 FY26, primarily due to higher costs and delays associated with legacy projects under execution, which are expected to continue impacting Q2 FY26.

    Management acknowledged

  • Lack of significant order inflows in Q1 FY26

    low

    Q1 FY26 did not see significant order inflows, though operational activities remained steady. Management expects large finalizations in Q2 and Q3.

    Management acknowledged

Q&A highlights

7 direct
Revenue and EBITDA Margin Guidance for FY26 Direct
The guidance for the yearly growth of revenue and the EBITDA margin remains the same. What you have mentioned, we still stick to that.

Confirms management's confidence in achieving previously stated full-year targets despite a weak Q1.

Asked by Kamlesh

Order Finalization Pipeline and Size Direct
And in quarter 2, there are 2 finalizations are expected any time, including the one which you mentioned, that is BPCL Bina and there's one more as well. ... these 2 projects roughly could be anywhere between INR 2,000 crores to INR 3,000 crores.

Provides specific details on upcoming large order finalizations and their potential value, crucial for future revenue.

Asked by Kamlesh

Impact of Legacy Projects on Margins and Revenue Recognition Model Direct
As we said earlier that this legacy order book is likely to get over by the Q2 of FY '26. ... So in order to iron out these variations, we already adopted the input or cost-based method for the projects that were awarded to us in FY '25. So going forward, you will see the impact on Q3 and Q4 revenues that majority of the revenue would come from these new projects and there will not be any volatility as such on the profit margin side.

Explains the reason for current margin compression and outlines the strategy to stabilize margins through a new revenue recognition model for future projects.

Asked by Kamlesh

Execution Timeline of Current Order Book Direct
The current order book would get executed up to quarter 1 of next financial year, that is Q1 of '27.

Clarifies the long-term visibility and execution schedule for the existing order book.

Asked by Jainam Doshi

Quantification of Q4 FY25 Spillover into Q1 FY26 Partial
Yes. The spillover from the earlier Q4 is the major portion in this Q1. And that is the reason the margin has also been impacted. ... We can get back to you one-on-one for this.

Confirms the significant impact of prior quarter spillover on current quarter's revenue and margins, but declines to quantify publicly.

Asked by Jainam Doshi

Joint Venture Details, Financials, and Strategic Impact Direct
JNK India will hold a 51% equity stake in the newly formed entity. ... So, the extent of working capital support could be about INR 50 crores or so in the first year. And initial equity is about INR 51 lakhs and also the initial investment is about INR 10 crores in the company. ... in this financial year itself, we would see a certain amount of revenue which could be about, say, around 8% to 10% of JNK India's revenue. ... The likely profitability of EBITDA could be anywhere between 10% to 12%.

Provides comprehensive financial and strategic details of the new JV, highlighting its potential contribution to revenue and profitability.

Asked by Paresh Raja

JNK India's Share in JNK Global Orders Direct
Yes, Kamlesh, the INR 2,000 crores to INR 3,000 crores order finalization is on JNK Global. And our share, we will have to derive exactly depending on which project and what will be our exact activities for that particular project. ... If the project is not in Korea, then it is 100%. But if the project is large and if it also involves a lot of BGs or the LCs and the foreign components, then it can range anywhere about 30% to 70%.

Clarifies the revenue sharing mechanism for large orders routed through JNK Global, indicating that JNK India's share can vary significantly.

Asked by Kamlesh

Jump in Employee Costs Direct
So basically, the increment is given in the first quarter of the financial year. So that indicates the jump. And also, we have added more manpower in terms of the execution and also to gear up to the new pipeline.

Explains the reasons behind the 15.5% YoY increase in employee costs, linking it to annual increments and strategic hiring for growth.

Asked by Akshit Gangwal

2 min read 5 chapters

Detailed narrative

Q1 FY26 Financial Performance and Margin Compression

JNK India reported a total revenue of ₹1,030 million for Q1 FY26, marking a 13.5% year-on-year growth. However, profitability saw a significant decline, with EBITDA at ₹72 million, translating to a 7% margin, down from 13.4% in Q1 FY25 and 13.8% in Q4 FY25. Profit After Tax (PAT) stood at ₹11 million, representing a 1.1% margin. This margin compression was primarily attributed to legacy projects under execution, which incurred higher costs and faced delays, a situation expected to persist into Q2 FY26.

Robust Order Book and Revenue Visibility

As of June 30, 2025, the company's order book was strong at ₹9,828 million, providing significant revenue visibility. The order book composition was dominated by heating systems at 79.4%, followed by process plants at 12.8%, and flares, incinerators, and other renewables at 7.8%. Domestic orders constituted a substantial 90.9% of the total order book, reflecting strong demand from India's refining and petrochemical industry. The current order book is expected to be executed up to Q1 FY27.

Strategic Joint Venture for Green Hydrogen and Sustainable Fuels

Post-quarter, JNK India entered into a joint venture with Mr. Sunil Dhole and Mr. Tushar Wagh, founders of Chemdist Group, to develop green hydrogen and other sustainable fuel technologies. JNK India will hold a 51% equity stake in this new entity, with an initial equity investment of ₹51 lakhs and a further ₹10 crores in preference capital. The JV aims to expand JNK India's offerings beyond conventional combustion equipment into clean energy process infrastructure, with an expected revenue contribution of 8-10% in FY26 and 10-12% EBITDA profitability.

Order Pipeline and Future Growth Prospects

While Q1 FY26 did not see significant new order inflows, management anticipates two major order finalizations in Q2 FY26, including the BPCL Bina project, potentially valued between ₹2,000-3,000 crores (for JNK Global, with JNK India receiving a share). Two more finalizations are lined up for Q3 FY26. Historically, JNK India's hit rate for finalized orders has been around 25%. The company maintains its full-year guidance of 40-50% revenue growth and 12-13% EBITDA margins, expecting stabilization from Q3 FY26 due to a new input-based revenue recognition model for newer projects.

Operational Efficiency and Employee Costs

The company is focused on disciplined execution, cost control, and aligning internal systems for timely delivery. Employee costs, net of ESOP expenses, increased by 15.5% year-on-year in Q1 FY26. This rise was attributed to annual increments given in the first quarter and the addition of manpower to support ongoing project execution and prepare for the new order pipeline. Management stated that employee costs would be optimally managed and kept within industry standards.

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