JNK — Q2 FY26 earnings call

Call held 14 Nov 2025

Management summary

JNK India reported a robust Q2 FY26 with significant revenue growth and improved EBITDA margins, driven by strong performance in core sectors. The company secured its largest single order to date, boosting its order book to ₹1,849.9 crores and enhancing revenue visibility. A strategic joint venture was formed to enter the green hydrogen sector, diversifying the product portfolio and positioning the company for long-term success, alongside a notable improvement in cash conversion cycle.

Highlights

  • Total revenue for Q2 FY26 was ₹184.21 crores (Rs. 1,842.1 million), reflecting a 71.6% year-on-year growth.

  • Operating profit for Q2 FY26 was ₹45.4 crores (Rs. 454 million), a 34.6% year-on-year increase, with an operating margin of 24.6%.

  • EBITDA for Q2 FY26 was ₹22.34 crores (Rs. 223.4 million), reflecting a 44.7% year-on-year increase, and the EBITDA margin was 12.1%, up from 7% in Q1 FY26.

  • Order book expanded to ₹1,849.9 crores (Rs. 18,499 million) as of September 30, 2025, up from ₹1,311.6 crores (Rs. 13,116 million) in H1 FY25, providing strong revenue visibility.

  • Cash conversion cycle significantly improved to 76 days in H1 FY26 from 232 days in H1 FY25.

Concerns

  • Operating expenses increased by 88.5% year-on-year in Q2, though margins were maintained due to strong revenue growth.

  • Margin guidance is conservatively set at 13-16% due to the increasing complexity and site construction component of larger projects, which introduce more variables.

Key financials

2 periods

Q2 FY26

  • Revenue
    ₹184.21 Cr
    YoY +71.6%
  • Operating Profit
    ₹45.4 Cr
    YoY +34.6%
  • Operating Margin
    24.6%
  • EBITDA
    ₹22.34 Cr
    YoY +44.7%
  • EBITDA Margin
    12.1%
  • PAT
    ₹13.02 Cr
    YoY +68.1%
  • PAT Margin
    7.1%
  • Operating Expenses Growth
    88.5%

H1 FY26

  • Revenue
    ₹287.18 Cr
    YoY +44.9%
  • Operating Profit
    ₹69.63 Cr
  • Operating Margin
    24.2%
  • EBITDA
    ₹29.51 Cr
  • EBITDA Margin
    10.3%
  • PAT
    ₹14.15 Cr
  • PAT Margin
    4.9%

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

  • Heating Equipment (Q2 FY26 Revenue)
    80.3% Share of Total Revenue
  • Process Plant and Flares (Q2 FY26 Revenue)
    11.8% Share of Total Revenue
  • Incinerators and Others (Q2 FY26 Revenue)
    8% Share of Total Revenue

Order book

high confidence

Total value

₹1,849.9 Cr

as of 2025-09-30 quantified

41% YoY

Inflow this quarter

₹1,050 Cr

Execution

executable over next 2-3 years

Pipeline

other

opportunities pipeline in terms of the Middle East and Africa

Our strong order book ensures a clear pipeline for revenue recognition, while the new venture opens new avenues in the renewable energy market, positioning us for a long-term success.

Source: Prepared remarks

Capital allocation

high confidence
  • M&A JNK Chemdist Technologies Private Limited Joint venture · Formed

    focus on green hydrogen technology and sustainable chemical and fuel solutions; significantly enhance product portfolio and offer cutting-edge sustainable solutions.

    expected to add at least about 10% to 15% to our top line

    During Q2 FY26, we formed JNK Chemdist Technologies Private Limited, a joint venture with the founders of Chemdist Group. This company will focus on green hydrogen technology and sustainable chemical and fuel solutions. ... But definitely, this year and maybe 1 or 2 years, we are expecting that this JV will add at least about something like 10% to 15% to our top line.
  • Liquidity Liquidity disclosed Cash conversion cycle has significantly improved to 76 days in H1 FY26 from 232 days in H1 FY25, driven by conscious efforts, change in revenue recognition method, and phasing out of legacy projects.
    I'm also happy to report that our cash conversion cycle has significantly improved to 76 days in H1 FY26 from 232 days in H1 FY25. We remain committed to executing on our order book efficiently while also leveraging the opportunities arising from the green hydrogen sector.

Guidance & targets

Profitability

  • EBITDA Margin Profitability · ongoing · Medium confidence 13% to 16%
    The margins, we have always guided on our normal margins the company has always tried and performed is in the region of around 13% to 16%. So we kind of are confident of maintaining this margin.

    — Arvind Kamath

Revenue

  • JV Contribution to Top Line Revenue · this year and maybe 1 or 2 years · Medium confidence 10% to 15%
    But definitely, this year and maybe 1 or 2 years, we are expecting that this JV will add at least about something like 10% to 15% to our top line.

    — Arvind Kamath

Order Inflow

  • Middle East and Africa Pipeline Order Inflow · within a year to conclude · Medium confidence Rs. 2,000 crores to Rs. 2,500 crores
    See, the opportunities pipeline in terms of the Middle East and Africa is in the region of about Rs. 2,000 crores to Rs. 2,500 crores, but that might take about a year to conclude.

    — Arvind Kamath

What to watch in Q3 FY26

Conversion of Middle East and Africa pipeline into orders

Within a year
Current Pipeline of ₹2,000-2,500 crores identified
Target Quantifiable order wins from this pipeline

Why it matters

This pipeline represents significant potential for order book expansion and geographic diversification, crucial for sustained growth.

See, the opportunities pipeline in terms of the Middle East and Africa is in the region of about Rs. 2,000 crores to Rs. 2,500 crores, but that might take about a year to conclude.

Risks & concerns

  • Margin pressure from complex, large-scale projects

    medium

    Larger projects with significant site construction components introduce more variables, making it challenging to maintain higher margins, leading to a conservative guidance of 13-16%.

    Management acknowledged

  • Cyclicality of the oil and gas sector

    medium

    The company's historical dependence on the oil and gas sector exposes it to market cyclicality, which management is addressing through diversification efforts into green energy and other sectors.

    Analyst acknowledged

Q&A highlights

6 direct, 1 evasive
Order pipeline and future order inflow outlook Partial
Basically, we still have some part of the petchem job, which JNK Global is executing. So that order inflow would also be expected in next 6 months or so. And other than that, in terms of the bid pipeline, exports mainly and also to some extent on domestic, both are quite strong, even on a near term of, say, about 6 months to a year.

Analyst sought quantification of future order book, and management provided qualitative insights into the bid pipeline and expected inflows from ongoing projects.

Asked by Kamlesh Bagmar

Status and execution timeline of legacy orders Direct
Yes, the old pending orders are very, I mean, it's almost diminishing now because most of them we executed in last couple of quarters. And in terms of the, say, percentage, it could be around, say, 5%, 6% of the order book. That's it. And we would complete in next 1 or 2 quarters.

Clarifies that the majority of older, potentially lower-margin orders have been executed, allowing focus on newer projects.

Asked by Jainam Doshi

Products and addressable market for the new JV with Chemdist Direct
JNK Chemdist, basically, they are into manufacturing of some of the critical equipment like evaporators, separators, reactors and some of the specialized technologies like green hydrogen and sustainable chemicals and sustainable fuels.

Provides specific details on the strategic focus and product offerings of the new joint venture in the green energy and sustainable solutions space.

Asked by Jainam Doshi

Total order value from JNK Global and JNK India's share Direct
Basically, JNK Global received the contract value of around Rs. 2,600 crores. And what we have received till date is about Rs. 1,050 crores.

Clarifies the specific financial contribution of the recently secured ultra-mega order from JNK Global to JNK India's order book.

Asked by Mohit Kumar

Execution pattern and revenue recognition for the large JNK Global order Direct
I mean generally, this happens in like our other projects. So initially, for the first year, it would be a bit on the lower side because there wouldn't be more dispatches, and it would be a bit heavy on the second year because there will be a lot of dispatches. And again, it will taper down on the third year, depending on the site completion and construction that way.

Offers insight into the expected revenue recognition profile for large, long-cycle projects, indicating a ramp-up in the second year of execution.

Asked by Mohit Kumar

Reasons behind the significant improvement in cash conversion cycle Direct
Definitely, it was our endeavor to improve the cash conversion cycle. So it doesn't happen like that, but it is a conscious effort to reduce that. But definitely, the change in revenue recognition method and other things have also contributed. And since the legacy projects are getting over and more projects are towards the new revenue recognition method, this is also a positive effect on the cash conversion cycle.

Explains the operational and accounting factors contributing to the substantial improvement in working capital efficiency, which is crucial for cash flow.

Asked by Amitabh Vatsya

Quantification of PSU receivables and working capital pressure Evasive
Not readily available with me right now. I can get back to you later. ... Greater than 6 months is not significant.

Analyst attempted to get specific figures on PSU receivables, a historical source of working capital pressure. Management did not provide exact numbers, suggesting it remains a sensitive area despite claims of phasing out pressure.

Asked by Anshul Jethi

Outlook for large order inflows from JNK Global and Indian refineries Direct
Yes. Yes, definitely, Mohit, because as I said earlier, the opportunities in Middle East and Africa, so it would possibly be combined along with JNK Global. And any large order, any tender, large tenders you're expecting in the second half from the Indian refineries? Indian refineries, okay, there are 1 or 2 opportunities, but not very large, I would say, in the next half till March.

Provides a near-term outlook on potential large order inflows from both international markets (leveraging JNK Global) and domestic refineries, indicating continued business development efforts.

Asked by Mohit Kumar

2 min read 5 chapters

Detailed narrative

Strong Q2 FY26 Performance Driven by Robust Revenue Growth

JNK India delivered a strong Q2 FY26, reporting a total revenue of ₹184.21 crores (Rs. 1,842.1 million), marking a 71.6% year-on-year growth. This performance was supported by a 34.6% increase in operating profit to ₹45.4 crores (Rs. 454 million), with an operating margin of 24.6%. EBITDA also saw a significant rise of 44.7% year-on-year, reaching ₹22.34 crores (Rs. 223.4 million), and the EBITDA margin improved to 12.1% from 7% in Q1 FY26.

Record Order Book Expansion and Revenue Visibility

The company secured its largest single order to date during Q2 FY26, an ultra-mega order from JNK Global Company Limited for a cracking furnace package in a petrochemical project, contributing ₹1,050 crores to its order book. This expanded the total order book to ₹1,849.9 crores (Rs. 18,499 million) as of September 30, 2025, up from ₹1,311.6 crores (Rs. 13,116 million) in H1 FY25, reinforcing strong revenue visibility for the next 2-3 years.

Strategic Entry into Green Energy with New Joint Venture

JNK India strategically diversified into the clean energy sector by forming JNK Chemdist Technologies Private Limited, a joint venture with Chemdist Group. This new subsidiary will focus on green hydrogen technology and sustainable chemical and fuel solutions, leveraging JNK India's engineering expertise with Chemdist's technology. Management expects this JV to contribute 10-15% to the top line within the next one to two years.

Improved Operational Efficiency and Cash Conversion Cycle

Despite an 88.5% year-on-year increase in operating expenses during Q2, JNK India successfully maintained its margins through strong revenue growth and efficient project execution. The company also reported a significant improvement in its cash conversion cycle, which reduced to 76 days in H1 FY26 from 232 days in H1 FY25. This improvement is attributed to conscious efforts, changes in revenue recognition methods, and the phasing out of legacy projects.

Future Growth Outlook and Diversification Efforts

JNK India is actively pursuing a robust pipeline of opportunities, particularly in the Middle East and Africa, estimated to be in the range of ₹2,000-2,500 crores, expected to conclude within a year. Domestically, 1-2 large opportunities are anticipated in the petchem, fertilizer, and sustainable fuel sectors. The company is committed to diversifying its product lines and sectors to reduce cyclicity and ensure more uniform, sustainable growth, aiming to maintain EBITDA margins in the 13-16% range.

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