Jinkushal Industries Ltd (NSE: JKIPL) Q3 2026 Earnings Call dated Feb. 13, 2026
Corporate Participants:
Abhinav Jain — Whole-time Director
Sumeet Kumar Berlia — Executive Director & Chief Financial Officer
Analysts:
Aniket Madhvani — Analyst
Madhur Rathi — Analyst
Jayesh Bendale — Analyst
Praneet — Analyst
Hemant Abar — Analyst
Chandni Chande — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Jinkushal Industries Limited Q3 and 9 months FY26 results earnings conference call hosted by Equibrojects Advisors Pvt LTD. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. Before we begin a brief disclaimer. This conference call may contain forward looking statements about the company which are based on the beliefs, opinions and expectations of the company as on date of this call.
These statements do not guarantee the future performance of the company and may involve risk and uncertainties that are difficult to predict. I now hand the conference over to Ms. Chani from Equibriges Advisors Pvt. Ltd. Thank you. Thank you. And over to you Ma’.
Chandni Chande — Analyst
Am. Thank you. Palak. A very good evening to everyone. Welcome to the Q3 and 9 month FY26 earnings call of Jenkushan Industries Limited from management team. We have with us today Mr. Abhinav Jain, Whole Time Director. Mr. Sumit Bailia, Executive Director and CFO. We will have opening remarks from the management team post which we will open the floor for Q and A. With that I would like to hand over the call to Mr. Abhinav Jain for opening remarks over to you sir.
Abhinav Jain — Whole-time Director
Good evening ladies and gentlemen. The first nine months of FY26 mark an important milestone for Jinkushal Industries. Standalone revenue grew 27% year on year to around 184 crore reflecting sustained export demand across our markets. During the same period, we strategically positioned our 70/3 of overseas inventory, the highest in our history. Strengthening our distribution reach and supporting a shift towards deeper customer engagement and improved realization. These actions reflect our focus on disciplined expansion, improved revenue quality and building a globally competitive export business. Since our incorporation in 2007, Jinkushan Industries has steadily evolved into India’s largest non OEM exporter of construction and mining machinery.
Over the years we have built a differentiated and asset light business model that integrates sourcing, refurbishment, customization, logistics and international distribution. Today, our presence spans more than 35 countries supported by a diversified supply network and an in house refurbishment infrastructure in dry food which acts as a hub and spoke model along with a designated partner facilities in India and overseas market. Our operating model continues to rest on three complementary verticals. Exports of new and customized equipment, exports of used and refurbished machines and the development of a proprietary brand Hexel. Each of these verticals reinforce the orders allowing us to provide end to end solutions across price points and customer segments.
During our current quarter. We undertook a. Deliberate and strategically important step in our evolution. Historically, our overseas inventory levels were modest around 10 to 15 crores reflecting a predominantly wholesale B2B export model. In current period, inventory at our overseas subsidiary level has increased Approximately to around 70 crores, the highest level in our history. This was not incidental, but it was a conscious decision which enabled. The position. Of the company with strengthened liquidity position of our ipo. By positioning inventory closer to end customers, we aim to shorten delivery timelines, expand direct end user and retail sales, increase the share of higher margin refurbished machines and enhance revenue realization over time. While this approach involves a relatively longer operating cycle aligned with retail led execution, it represents a structural shift towards building a stronger and more resilient global brand and global distribution network. During early December, certain clarification in Mexico, which has historically been one of our most significant export markets, led to temporary purchase difference by some importers at the end of the calendar year.
It is important to emphasize that this was a timing related development alone rather than a structural demand issue. On the contrary, as for our insights for the customer engagement in Mexico, the demand this year and the years to follow is supposed to increase in Mexico. Given the promoted strategy of the government for various reasons, Their accumulator remains healthy and high in demand. We expect conversion into revenue and profitability in the normal course of business. In response, we proactively have strengthened our execution across markets. The strengthened presence in markets such as UAE, South Africa, etc. Support diversification and reduces concentration risks across geographies and have enabled US to grow 27% on a standalone basis compared to the same period.
We have continued to invest in our. XL brand which represents an important long term growth potential for the company. XL products are designed to our specifications and supported through our global distribution network, enabling us to participate more deeply in branded equipment sales while maintaining our asset light operating philosophy. Investments in international exhibition marketing initiatives and distributor partnerships are being undertaken to build durable brand presence and strengthen market access. The strengthened capital base following the IPO has enabled us to expand overseas inventory, reinforce export execution and accelerate brand and distribution initiatives in a disciplined manner. These investments are directed towards building long term business strength and sustainable growth.
The decision to utilize current liquidity towards. Marketing exhibitions and strengthening our global execution has been taken which will reflect in the current period and the quarters to come which shows and reflects our confidence in emerging business opportunities for our company. While these investments are expense in the current period, but they’re intended to enhance distribution depth, brand visibility and long term profitability along with recurring revenue. From an industry perspective, the global used construction equipment market continues to benefit from structural change wins infrastructure development across emerging markets, cost advantages of refurbished machinery compared to new equipment, growing rental ecosystems, sustainability driven reuse trends all support the long term demand environment in which we operate.
Our positioning across three foraged exports and emerging geographies aligns well with these drivers. Our competitive advantage is built on execution excellence, a strengthening product mix, scalable export operations and prudent capital discipline. These foundations enable us to compete effectively on a global scale while delivering sustainable long term growth. And as we enter the final quarter. Of FY26 our priorities remain disciplined and focused. We are committed to monetizing overseas inventory efficiently, strengthening our margin mix through higher contribution from refurbished equipment and excel, maintaining prudent working capital management and continuing geographic diversification. Our near term focus remains on maintaining financial prudence while pursuing sustainable and most importantly profitable growth. Our aspiration to achieve a multiple times growth on revenue over the next 23 years remains intact but supported by the expansion of overseas distribution, growth of refurbished exports and scaling the excellent. At the same time, our sharpest focus continues to be an improving pattern and revenue quality rather than pursuing the turnover growth alone.
Overall, the strategic steps taken during this period strengthens our global execution capability, improves our balance sheet strength, improves revenue quality and the position of the company for sustainable and profitable growth over the coming years. I will now request our CFO Mr. Sumit earlier to take you through the financial highlights for the quarter.
Sumeet Kumar Berlia — Executive Director & Chief Financial Officer
Thank you. Good evening everyone. Let me take you through the financial performance for the quarter and nine months ended 12/31/2025. Starting with standalone performance for Q3FY26, total income stood at 9179 lakhs as compared to 4437 lakhs in Q3 of the previous year reflecting strong year on year growth. Profit after tax for the quarter was 417 lakhs compared to 311 lakhs in the corresponding quarter last year, representing healthy growth of approximately 34%. For the nine months period, standalone total income increased to 18,429 lakhs from 14,884 lakhs in the previous year, marking growth of around 24%. Profit after tax for the nine months stood at 1148 lakhs.
This performance demonstrates continued export execution strength and scalability. Moving to consolidated performance for Q3FY26, total income stood at 4,535 lakhs. The group reported a loss after tax of 987 lakhs for the quarter. It is important to view this consolidated number in context. In H1 FY26, the group delivered consolidated PET margins of approximately 9% reflecting the underlying operating capabilities of the business. For the nine months period ended December 31, 2025, consolidated total income stood at 17,094 lakhs and profit after tax stood at 108 lakhs. The consolidated results reflect the impact of strategic overseas inventory positioning and standard intercompany elimination.
Under accounting standards, margins embedded in overseas inventory are recognized upon sale to external customers while associated operating costs continue to be expensed as incurred. This results in a timing difference between cost recognition and profit realization at the consolidated levels. As overseas inventory is monetized, consolidated revenue and profitability will progressively reflect this conversion. From a capital structure standpoint, we remain comfortably positioned post IPO with continued focus on working capital, discipline, margin quality and sustainable growth. With that, we conclude our financial review and are happy to take the questions.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may please press STAR and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press STAR and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Aniket Madhwani from Step Trade Capital. Please go ahead.
Aniket Madhvani
Yeah, Hello.
operator
Yes sir.
Abhinav Jain
Yes.
Aniket Madhvani
Yeah. So firstly I just want clarification on the numbers. So as you said, you are still intact to achieve around 800 crores in three years. So as we see the numbers in this quarter, you are seem to be going in a downtrend kind of business. So this quarter has seen a significant. Dip in top line as well as bottom line. So I just want the clarification what what was the major, major reason behind it and are you facing any challenges in Achieving any orders from the clients.
Abhinav Jain
Yeah. So I would like to clarify not seen a downward trend. In fact we’ve seen an upward trend. Of 27% of standalone export turnover growth, right? From about 140 crores to about 185 crores something. And on a consolidated level, the intercompany. Profit elimination which essentially removes your profit of the inventory which has been exported. From India, however has still had overseas. Overseas inventory on a books consolidated level. Is reflecting the profit and turnover elimination. But if you actually add 185 crores plus let’s say we have about 70. Crores of inventory where we had earlier, let’s say 10, 15 crores of inventory. So 185 crores plus around 70 crores. Of inventory which is at purchase cost, plus that they’re paying reform at sector expenses. So 80, 90 crores of turnover you added. So we are very much at approximately the same numbers where we were earlier. And 285 to 300 crore could be. Very eligible if we just had sold this inventory. Right. But it was a conscious call of. The company to maintain inventory other than just wholesale. We just sell machine. Moreover, our debt utilization as well has not been increased as per the increase in the revenue. I would say so. And that is only working capital as well. So all the parameters, if you actually look at it other than, you know, just mainly looking at the consolidated numbers will show you that performance has actually. Increased as opposed to decrease. Moreover, it has only been. So it has only been a short period of two or let’s say some two odd months where we were able. To actually see the IPO proceeds, etc. So there’s all working cycle for our. Business which has always been there, which. Can be concluded in a matter of two or three quarters, something like this, and a short time frame of 1/4 or 2 months. And calendar cutoff date cannot adequately represent what is, I mean it cannot translate into sales conversions because the sales conversion cycle is simply normal and that’s what inventory is being affected. And it can be anyone’s guess whether 70 crores can win here. So how much would that get realized? And that is the whole thing. And your other question about the long term revenue growth, we are still intact on that. We have the adequate working capital and. We are here for the long term, right? For calendar cutoff date. We are not here to present numbers, but we are here to build a business and we are doing so effectively, I believe. And I don’t see anything which is stopping us at all, especially in the. Current Balance sheet itself with such a strong inventory to achieve that kind of number. And in fact these steps are in. Towards that only to achieve those kind of numbers and especially focused that.
Aniket Madhvani
Sir. 50. Hello. Hello.
Abhinav Jain
Yes.
Aniket Madhvani
So the 50% the export is attributable to the Mexico. Right? And if you look at the recent news of the Mexico. So Mexico has also put 50 percentage tariff on the Indian export. Right. So how do you see and what, how, what will be the company. Hello. Hello. How do you see the future outcome that tariff and do we have any diversification strategy from the Mexico?
Abhinav Jain
A large part of our revenue was coming from Mexico in the previous quarter. However, in the current quarter itself we. Started diversifying and even forever. We have had presence in more than 30 countries selling machines in various countries including UAE, Australia, South Africa, Netherlands, Europe. Mexico had taken a larger share of the revenue in one of the previous years. But we still have presence in multiple countries across the uae. And especially there are two things. First of all, our product is not explicitly covered and it’s still not clarified whether our product is covered or not. So far what the news is that our product is not covered in, you know, the tariff scheme of Mexico government. So during the end of that period on 31st of December, basically it was not exactly clarified whether you know, our product will be covered or not because the tariff was actually being implemented from the new year.
So as on the reporting date, the purchasers and importers deferred their purchases to the new E hub. But as of date there are no coverage on tariffs and we are expecting actually higher demand in Mexico because they. Have launched some schemes where they are promoting sales of commercial equipment and construction machines and agriculture machines wherein the depreciation accelerated depreciation is being allowed by Mexican government to boost the change of these machines. So actually on the contrary, it’s a. Positive news for us rather than.
Aniket Madhvani
Okay,
Abhinav Jain
that 31st of December was a. Reporting date, which is where the numbers are.
Aniket Madhvani
Okay, so it means Q3 deep in. Revenue is not on account of the tariff of the Mexico. Correct?
Abhinav Jain
Correct, exactly. Is it just the difference of sale? We have a higher inventory. That’s where the consolidated revenue is looking at. If the same inventory was sold on the exact same date of 31st of December, it would have reflected in the similar turnover level.
Aniket Madhvani
Okay.
Aniket Madhvani
Okay. And could you just give me the of your revenue? I mean, is there any increase in your brand in H1FY26 we have seen. Around 11% of your revenue comes from Hexel. So is there any increase in this. Quarter.
Abhinav Jain
So capital goods and production takes time. So there is no quarter on quarter. Numbers increment like this. However, these orders are for Hexel and. We are getting orders for Hexel. There are some new developments as well. Which we cannot share due to compliance. Purpose and they are not publicly disclosed information yet. But we are continuing to expand dealers and distributors. And as I said in this quarter particularly there is no particular change in. The number as which was given in the previous period.
Aniket Madhvani
And same for your new and used refurbished. The same proportion of.
Abhinav Jain
I mean the business itself is assessed that you know, it takes as I. Said to Mexico, let’s say 60 to 90 days of shipment time alone. Then refurbishment time, customization time, procurement time, the whole cycle. So there is 120 to 150 days. Of cycle itself which cannot be covered in one quarter. So any one quarter cannot give you. Any clear picture about what has translated. It can show indicators and record buildup of inventory itself is the indicator. So that will take time. That’s why it is 70 crores of. Record inventory build up as on reporting date. You know, the next phase of the cycle will go. You know, sales and shipment and realization. So all those will start reflecting.
Aniket Madhvani
Okay. Okay. That’s it from.
operator
Thank you sir. The next question is from the line of Madhurati from Countercyclical investment. Please go ahead.
Madhur Rathi
That I’m new to the company. So if you could just take me through your business model. How do we. From where do we buy used construction machinery? Is it that we only buy used construction machinery in the country and export them Or. Or we buy used construction machinery globally and where do we refurbish it and from where do we export it? And also the. Who. Who are our principals in China from whom we are buying and why can’t they sell their machinery themselves? Why do they need Jinkuchal to sell the machinery?
Abhinav Jain
Okay. Would you like to answer that question?
Sumeet Kumar Berlia
Hello. Hi Mr. Madhu. So explaining about the business verticals which we are operating in. We are primarily working in three business verticals. One is new and customized accessorized machines of other brand. Secondly, refurbished machine, used and refurbished machine. And third is our own Hexel guide. So the whole business model is exports of construction and mining equipment where we are providing a one stop solution to our customers. The use the refurbished machine is our primary model and the Hexel is our. Own brand which we are developing now. So this provides a value addition to the customers in terms of cost saving and readily available of machines to them. Whenever project is start. They need A complete mix of products. So we intend to become a one stop solution for global supply.
Madhur Rathi
So all that I already know, that you sell used machine under your own brand and you certainly you export new machinery also. What I’m asking you from where do you buy used machines?
Abhinav Jain
All right, so we buy used machines all across India and the world. We refurbish them across either our own. Refurbishment center in Raipur in India or our partner refurbishment centers or in our. Partner refurbishment vendors or contractors elsewhere around the world. That is our first vertical where we buy used machines and then refurbish them and sell them. Second vertical is we buy new machines. Of other brands, customize them, add value. And then sell them in a similar model in either one of the locations. That I told you about earlier. The third vertical is Excel, our own brand. And the question why can’t the Chinese people themselves lies in the same aspect. Why Apple or Hyundai or Caterpillar or any other Samsung lg? So why do brand? In most engineering companies and engineering goods. Business, the design R and D engineering, marketing is retained by the brand and the company. And manufacturing is always outsourced to either. Because it’s a recurring simple, mundane task of assembling products, sourcing them from various ancillaries, fabricating, manufacturing some of the things and assembling them. So it is always, it’s a recurring thing again and again. So that is always outsourced to either Chinese or Indian or any other cost advantageous players. And that is the predominant global model we work in. Why can’t all of these manufacturers not start something in their own? I mean that is how the whole global supply chain economy works. Because some people are good in manufacturing. Some people are good in marketing, some people are good in design R and. D. So I think that’s how it works, right?
Madhur Rathi
So basically what I understood, that we are buying secondhand machinery globally and refurbishing the machines in India as well as in other countries. And then do we sell, do we have distributors or we send to the sell to like the end customer directly?
Abhinav Jain
We don’t sell to the end customers. We primarily have distributors in various countries. And we supply machines in more than 30, 35 countries. And these distributors are the importers in their countries. And then they further supply to end customers in their time zone in their. Language, in their geography, which is easier. For them to cater.
Madhur Rathi
So now for example, if we buy a secondhand Caterpillar machinery and refurbish it and sell it under our brand, or we sell it under Caterpillar only
Abhinav Jain
Our. Brand is only Hexel and that is. Our own brand, own design machine. We are competing with Caterpillar on that. And when we are buying other brand machines which has been a historic business model, we do not change the brand. It is just like sale of used car or used mobile phone. No one changes the brand when they are selling used capital goods or used. Mobile phone or used car. Right. If you are buying a Hyundai i20, it will still remain to be Hyundai i20.
Madhur Rathi
So will we be able to match last year’s revenue of 380 crore roughly this year FR26?
Abhinav Jain
It will remain to be seen. And we can comment on the current quarter. But as I said, we are confident on, you know, building a business for us. All the right tick boxes have been. Checked with record inventory buildup in the. Right direction, evaluating and assessing of building. Teams, senior leaderships from other OEMs, etc. To drive growth to make our business organized. So rather than quarterly number focus, we’re really focusing on the next two, three. Years targets that we have set for ourselves. And we’re confident to achieve even. I mean it’s still early on, it’s first quarter after our ipo. Roughly two months have passed after the IPO on this date. But I think all the parameters and the initial indicators seem to point in. The right direction for us.
Madhur Rathi
Right? Sir. Also, our current liabilities have increased from 5.9 crore at FY25 N to 26.1 crore in H1. So why was that?
Sumeet Kumar Berlia
Sir, can you please repeat the question? And from the source which we are referring.
Madhur Rathi
Yes. Yes, sir. So our other current liabilities have increased from 5.9 crores to 26.1 crore between FY25N and H1 of FY26. So if you help us understand why it has increased so much.
Sumeet Kumar Berlia
Okay, you are to H1 number. Let me check once.
Madhur Rathi
Yes.
Sumeet Kumar Berlia
Yeah, please. Please give me a second.
Madhur Rathi
Yes, sir. In the meantime I had another question. Sir. So what, what we understand from some of the component manufacturers of these off highway vehicles and construction and mining equipment is these Chinese players are like top five out of the top 10. Top five would be Chinese and off highway market and the construction market. So is that why we have introduced this Hexel brand where we are just assembling these machinery for Chinese and selling it in India. Is that understanding correct?
Abhinav Jain
We are not the contract manufacturers for anyone. We are actually the brand owners of Excel. We are the brand who is getting it made from one of the Chinese factories for us. As per Our design, our design engineers. Are from our USA office in Florida and we aspire to become one of the top 10 brands in the world. For sure in the long run.
Madhur Rathi
Right sir. So my. Right sir. Got it sir. On the other current revenue, other current liabilities, you could help us understand.
Abhinav Jain
Hello?
operator
Yes sir. Hello.
Abhinav Jain
Yes sir. Come back up to the question or something. Meanwhile we can take up the other questions as well. We’ll get back to you.
Madhur Rathi
Okay. Okay, so what’s our total capex going forward?
Abhinav Jain
We are an asset light model. We don’t really, you know, have a. Clear in line with the objects of the issue. We don’t really have a fixed capex. Or something like that. We’re an asset light model. That’s why we’re getting, you know, the machine itself manufactured by another company just like Boat or Samsung or lg, whatever. And I don’t see any, I mean. As of now, as of this date. We don’t have any plans of that.
Madhur Rathi
And sir, what is our working capital cycle like? What is the credit period that we give to our distributors? We buy machines on credit from our suppliers and how much inventory on a steady state basis do we keep? So if you could just explain us the steady state working capital days in our business.
Abhinav Jain
All right, so the inventory question, we have increased our inventory which is down. You know the. Agenda that we have highlighted today. So the inventory has been increased to 70 crore. So whatever we did earlier has changed. Now the working capital cycle was earlier, I believe 120 to 150 days, something. Like that, which will now again remain to be clean since we have increased. Our inventory at overseas level and planning retail execution. And the credit days is 60 to. 90 days is the delivery period and logistics cycle that we have to countries. Like Mexico and probably 60 days to South Africa, etc. And usually the credit period that we give is 30 days or something like this after delivery. So the logistics period gets recorded and in the delivery time. And basically even when the control of the DL and the goods are in. Our hand, the logistics period gets recorded as credit period in our books or. Referables in our books. However, in the books of the customer, you know, they, in a practical basis they would essentially consider credit only when the goods have received in their goods. Have been received in their hand. So that is there. So even at 120, 120, 150 days. Of credit in our book, essentially 90 days is just the logistics period and delivery time. It’s just like if someone is delivering goods from Pune to Bombay that one day of transit time does not count. But if someone is delivering goods from Kashmir to Kanyakumari, there will be a considerable transit time. So the credit period may not be. Considered by the customer unless you get the delivery approach. So this is the essence and I would request you, I mean if you can focus the questions more towards this quarter and this earnings call would be. More fruitful for everyone’s time. And we can happily take one on. One questions from you and connect directly with us or our team or our IHR team for the basic questions which have been covered.
Madhur Rathi
Right sir, I’ll get back in the queue.
operator
Thank you, sir. Ladies and gentlemen, to ask a question please press star and one Now. Participants who wish to ask questions may please press star and one at this time. The next question is from the line of Jayesh from HDFC securities. Please go ahead.
Jayesh Bendale
Yeah, thank you. Thanks for the opportunity and good evening. Am I audible?
Abhinav Jain
Yes.
operator
Yes, sir.
Abhinav Jain
Yes.
Jayesh Bendale
Yeah. My question is that what is the current order book or revenue visibility for the next 12 months or 18 months maybe.
Abhinav Jain
Hi Mr. J. So in usually as you can see, you know, OEMs or dealerships or automotive. Or construction equipment rather than a current. Order book which is predominantly seen in government contracts or something like this. I believe inventory and other things like the demand in general in the market can be seen in parallel to the revenue visibility. So in that aspect like there is no current order book as such. I mean there are some orders in pipeline but we don’t maintain that as an order book like 200 crores the government. But we have commitments through our dealers. Especially in Excel which we disclosed in. The news as well. 100 machines in the next couple of years. And something like that. But they will not meaningfully give you the exact revenue stream because as I said, we are not dependent on that order. Now we have other marketing efforts, sales efforts, scale up efforts and year on. Year standard growth which is the most measurable performance which you can see and measure in terms of visibility. In India. We have done in December period. So that can show that we are growing and the inventory has been built. Up. That will get converted into revenue and turnover. So the inventory. I think you can get a decent. Idea of revenue visibility.
Jayesh Bendale
Okay. Okay. So. Okay. So majorly that means dependent on marketing and strategies. Correct. Rather than marketing for depending marketing and
Abhinav Jain
yeah, sales and marketing efforts for the brand building. And then that is the basic concept of use machine.
Jayesh Bendale
Second one will be that how much of the recent growth is applicable to repurpose equipment versus the new or customized machines.
Abhinav Jain
Okay. I believe. Would you say that numbers? I believe 40. So use refurbished machines in the current year May growth and new customized machines of other machines. Because obviously I’m gradually Kukamari customer base and new customized machines of other brands. You know year one. So that will take time. But Sumiti, what is the percentage of mix in terms of value or in terms of units?
Sumeet Kumar Berlia
Sir, in nine months 2026 the new machines have taken 49% share. Old machine 42% and excellent 8.6%. So overall the new machines have been reduced from 61% to 49% of other brands. The Hexel have increased from 1% to nearly 9%. And the refurbished machine segment has increased from. Increased from 38% to 42%. In nine. Months 26 consolidated periods.
Abhinav Jain
Hello. Was that clear, Mr. Jaish?
Jayesh Bendale
Yeah. Yeah. Yeah, yeah. Okay. Okay. Thank you sir. And for that enter. And enter. Apart from this one word that can management quantify the contribution from repeat customers Consistent new client addition. Regarding the contribution
Abhinav Jain
we don’t have that data exactly currently. But it remains. But it remains same. Like that. But I believe 70% would be our. Repeat customers and 30% new. But going forward we are also eyeing to.
Jayesh Bendale
So which regions. Which regions are expected to be the primary growth driver for you? We are definitely entering the geography and dealerships we sign.
Abhinav Jain
But it is still publicly disclosed information. So I cannot tell that. But yeah, I mean. I mean see we were in 35 countries in all six continents. Latin America, major Mexico had major revenue growth. I would say the other other Africa. Middle east and European countries will also start to throw in a lot of. I can say this. We are hiring team members. See I’ll be very honest. We are hiring team members from very. Big guys in our field to grow. You know in these various regions that. I’ve told you where it is creating organizational structure. Regional sales. Regional sales manager, global sales agent. All these people. So initially. Long term growth driver and you know from promoter led business to a professionally. Driven business which is the need of. You know for the company to become a truly global brand. With Excel. This is our aim and intention and we are doing it. And we are spending on that. We are spending on marketing exhibition manpower. And you know like 1 crore plus valley manpower a lot. So you know we are going to invest in these. They will be expensed out in the PNL initially. You know why are these expenses coming up. But we are very happy to take. Up these expensive investments. How many targets.
operator
There is lot of background noise from outside.
Jayesh Bendale
Okay sir. Now am I audible.
Abhinav Jain
All right, I’ll tell you a simple thing. You know someone else also. So I like to clarify. Maripa Kutkabi Motamoti network company and Uskana limits right? Already working capital basis. Or my power evo increase current but. Haiguna. Basic products. Same level of margin. Same level. Next. It is very necessary that we take the strategic initiatives on foundation building currently. Or marketing presence brand presence brand we call banish and globally we become very known in this space. Even more in and team can drive it and the growth drivers can become these people. And I understand, I mean financial analyst. Try to just look at the results. From books and quarters as we look at the fundamentals. We want to build a brand and build a business for the long term. And that is what we’re doing and that is what we believe will give us the margin.
operator
May we request you to return to the question queue for follow up.
Jayesh Bendale
Okay, okay, no worries. Thank you. Thank you sir.
Abhinav Jain
Thank you so much for the interest.
Jayesh Bendale
Thank you.
operator
Thank you sir. Ladies and gentlemen, to ask a question please press star and one now. Participants who wish to ask questions may please press star and one at this time. The next question is from the line of Praneet and individual investor. Please go ahead. Mr. Praneet, your line has been unmuted. Please go ahead. As there is no response. Can we go ahead?
Praneet
Hello? Hello, can you hear me? Hello?
operator
Yes sir.
Praneet
Sorry. So thank you for the opportunity. So first I wanted to ask regarding the returns policy. So how does it work in terms of warranty and returns for a refurbished and also new equipment, how does it work? Usually depending on the segment.
Abhinav Jain
So for our own brand Excel we give 2000 hours warranty and usually the goods are so big that in any written policy usually the shipment is usually covered by the customer. So these are OTP large goods. So returns are usually non existent kind of. Because the cost of returning itself will be much higher than the cost of repair or buying a new part and installing a new part on that machine. The entire principle of mechanical engineering or you know, machine line. The fact can get repaired again and again, again and again, again and again by repairing the engine, repositioning the engine or the transmission or other components or hydraulics or what not.
Right. And these are smaller parts which can be shipped easily by the HL or. Anything else or import air cargo and. It may be easier. And this is what happens. A used truck or a used machine, it can go on and on and on and on by getting repaired and years and years and years. And that’s why government even imposed laws that 15 years more than the age of machines or trucks or not machines. Trucks after 15 years cannot be used. Abroad because otherwise what was essentially happening in all the countries is, you know, people were just repairing the old machines or trucks and using it for 50. Years or whatever X number of years. It can go on and on. So that is returns are non existent virtually. Warranty as I said for our own brand we give warranty for used machines and refurbished machines we are the wholesale seller. Warranty is usually covered by the distributors. So the end distributor incorporates and builds it up in that margin and they give warranties. And again the concept is the same. They buy spare parts either from us. Or from the local vendors or from anyone else and do it.
Praneet
So it’s basically seller warranty, it’s not manufacturer warranty
Abhinav Jain
exactly for use machines because. These machines they’re not essentially the manufacturer. And for Hexel brand we are the manufacturer. So we give warranty back to back on that and that is covered by. Our suppliers and our factory. And for example we are using Cummings engine Cummins is gain a warranty which we come back to that Cummings is a globally established brand everywhere. So with the serial number of the engine etc they give the volunteer
Praneet
so the basically the producer who’s already doing. The contact manufacturing for you covers the warranty across the globe.
Praneet
Understood. And in top so one more question is regarding our expansion beyond the mining sector. Is there potential for agri or how does the management think about expanding the sector to others other segments like Agrippa it has similar use case and similar.
Abhinav Jain
Our focus has not been that sharp over there currently. But yes we are present in a minor level on agri verticals including agriculture etc. As well. It is an ancillary I would say. Product segment as well.
Praneet
And one more question regarding the beginning of the just to get some context as an investor. So I understand that in the last conquer you mentioned that your family has been into the mining sector for last 50 years. Could you also explain how.
Abhinav Jain
Sorry
Praneet
how you mean to say how
Abhinav Jain
I think we lost you. I’ll still give a general broadview context that our family has Nagra empire started mining contracts in south of Satyagarh in. BSC rely plant which is a flagship. Unit of Steel Authority of India Ltd. And my father was also into mining contracts and contracting. My uncles are into mining contracts. They even execute big contracts right now. For BSP or participating vendors for WCL etc. So primarily our family has been users and even have extended family, cousins etcetera all have been users of construction in mining machines. We have a very first and interesting overview of. Not that you know very in detail understanding about how machines work. What do the customers want because we ourselves are customers on the other side of this and what problems arise and what can be repairable, how to repair. It in a cost effective way. And all those impact has really gone into our current business as well where we refurbish machines or design machines keeping in mind the requirements and ease and comfort of the customer. We are trying to make Hexel as. A customer oriented brand.
operator
Thank you sir. Ladies and gentlemen, in order to ensure that management is able to address questions from all the participants, please limit your questions to one per participant. The next question is from the line of Madhur Rati from Counter Cyclical Investment. Please go ahead.
Madhur Rathi
Thank you for the opportunity. Once again sir, if you could help us understand what is the margin profile for refurbished equipment versus our own branded equipment.
Abhinav Jain
12 to 14% level is what we. Expect and see estimate usually on pat. Level for refurbished use machines and for our own brand. It’s early on. There are many, many one time expenses including on boarding of staff, marketing website, trademark registration, what not right. So. But going forward in the years to come I expect we expect 2015% on that loan basis or a loan brand. As well without any capex.
Madhur Rathi
Okay. And sir, our employee expenses have increased I think so at this level of employee counts or how many machines can be refurbished.
Abhinav Jain
I don’t think that will be a direct analogy because employees include a lot of white collar and you know, senior managers which are probably in various sections including accounts or whatnot. Right. So the capacity as of now doesn’t change. Exactly. For the repurposing team it is primarily restricted by the working capital available. And since as we informed earlier that. We have designated partners etc. For refurbishment as well. So money is the raw material here. If you have overkill capital you can simply. As you can see, we built up inventory since we have the IPO property. So we can increase the inventory again and we can refurbish more assets if you have more money to invest in refurbishment and cost of goods purchased.
Madhur Rathi
Sir, so why did we build inventory? Why don’t we just sell it to our distributors instead.
Abhinav Jain
As students to do it over the period of consume also. Good India may he point a point. By all practicality. Exports on India but the end of the cycle including that delivery period. So that is a sales cycle which fundamentally macro level understanding the sales cycle of 150 days cannot be completed which is what will be reflected over here.
Madhur Rathi
Understood sir. And is Punabai Vision Infra Equipment our competitor or our customer or some supplier?
Abhinav Jain
Not our customers or suppliers. They are in a similar domain in one of the verticals but not exactly same. The primary business is renting of machines and I believe that’s where their most of their patent revenue comes from. I don’t know what exactly but yeah, we are into our own brand and we are into our core businesses in construction.
Madhur Rathi
Okay sir, thank you very much.
operator
Thank you sir, a request to participant to limit your question to one per participant. The next question is from the line of Praneet, an individual investor. Please go ahead.
Praneet
I’m really sorry the call got cut. Thank you for the follow up though. Just could you rent my old question of how did the fact how did your family enter into this business and is the mining operation still going on?
Abhinav Jain
All right, I answered that question again and answered it again and if there’s still further queries earlier we can take it one on one with Mr. Praneet. And our IR team. We are our family. My grandfather started mining contracts in south of satisfied maybe 50, 55 years ago for July field plant which is the flagship unit of Sale Chile Parody of India Ltd. And ever since IRNO Mining has been core part of these business interests and operations. My father when he entered the business he started the PPE mining contracts and other contracts in Raipur for stone quarries, Amsho etc. As well road railways and even my cousins and uncles currently from as you know same first cousin family are heavily involved in mining contracts in wtm, BSE and other mining companies private or public.
So that is how we are limited to mining and contracting and where we have first hand insights of how the machines are used, how they are repaired, what problems arise, what problems do the OEMs currently, the rest of the OEMs currently in the market give to customers. And that’s why we have been able to have so much of customer insight and solve problems of customers that set up designing our own brand in Excel and also when repairing used refurbished machines or customizing a new machine by knowing what lacks in what machine and solving that problem in a cost effective way.
That has been our usp. That is why we are a three star export house with the government of India. And that’s why we have had such a recurring customer base where the same customer buys from us again and again and again. And now with more working capital at our hand we are ready to scale this up, expand our customer base Cater to our existing customer base as well and you know, grows trend to strength from there.
Praneet
Understood. I understand that the company has clearly a problem.
operator
May we request you to come back in the follow up question for question Q?
Praneet
Sure. Thank you.
operator
Thank you, sir. Request to all the participants to limit your question to one per participant. The next question is from the line of Heman from Abar Group. Please go ahead.
Hemant Abar
Hi, good evening sir. I have a very specific question. When I was going through your consolidated. Results, I would just like to understand just because we have strategically moved our inventory to our overseas subsidiary, the cost of movement of those inventory has impacted consolidated profit. Is that the major reason?
Abhinav Jain
Yes, you got it exactly right. Because what happens is according to India, in very plain English, all the expenses are recorded for any movement, right? And these are major expenses including shipping, positioning, etc. And we. Whatever, whatever is the expense, it will get recorded. But the profit and turnover gets eliminated. If there is inventory, obviously it got built up and there is a purchase cost inbuilt on it. There are other costs as well which gets added to the value. When that will get sold, the entire gross profit will become the fact. Because the expenses are already booked but the same expense is not booked.
So this is what shows. This is called intergroup elimination or something like this. And that profit elimination, turnover elimination. And since we have such a high level of inventory. So all that inventory elimination is happening which is why it is showing, you know, in a drastic way, like very high. Because earlier we used to have 10 to 15 crores of inventory. Now it is 70 crores of inventory. So that is why the swing became very large for this. But it is what it is.
Hemant Abar
Then we can expect a sharp reversal in coming quarters as and when.
Abhinav Jain
I think it will not be too prudent. But as I said, if anyone gets what will happen with that and when. That sale gets booked.
Hemant Abar
Okay, thank you so much.
operator
Thank you sir. The next question is from the line of Praneet, an individual investor. Please go ahead.
Praneet
Yeah. Thank you for the opportunity again. So I was just wondering that the management has mentioned money is the raw material. I’m wondering why you don’t you face any other competition. Because if capital is the only requirement there can be many other players in the market. So I was just wondering, I understand the deeper insights on how the machine works and you have the partnerships like could you explain why does J Kushal have a much more stronger market presence and why does it continue to have its market share?
Abhinav Jain
I mean for what you.
Praneet
The refurbishment and the oem both.
Abhinav Jain
I’m a mechanical engineer. My father is a mechanical engineer and I mean in every business there will always be competition. Competition is healthy and if anyone guessed why can’t the other guy or the competitor be better? But we are the largest exporter in India for non end construction equipment for a reason. We are awarded exporter of the reason. It will amount to self boasting and trade. But we are pretty hardworking I would say, if not intelligent as well. And this is what we’ve been trying to do. We’re working around the clock hours. People who know me or our family, they will know that, you know, we have very hard work.
Again, one thing the college friend told back in college was, you know, whatever industry I am in or whatever work I do, I’ll definitely be outsmart and beat the competition and I hope to. Have moved in that direction from what and achieved it at some level and. We hope to carry it on as well. I mean that is our intention and good competition is there. But we believe you know, B beat our competition and be the best in our. In our, you know, league entertainment.
Praneet
Got it. And one more question. Domestic market, why don’t. Just one last question. Domestic market, I understand that we export more almost all right. I was wondering is there no domestic market available for this particular refurbishment and OEM refitment? I’m pretty sure there is. I’m just wondering why did we stay away from that market?
Abhinav Jain
Well, the government of India promotes exports from India. We take pride in the fact that. You know, we earn valuable foreign exchange for the country where the three star exporters recommend and ordered by the government of India. So we basically are following the footsteps and guidelines of the government. And if you are catering to the. Export market that is different and price point different, etc. The dynamics are different for the Indian market. With the limited size of capital there is only so much that we can do. It’s the kind of product that we are making, the kind of ecosystem and teams we have and the entire kind of supply chain and model we have is most suited for the export market. It’s giving us fair enough revenue and. Setting up profit margin. Earning in dollars is always better. So that’s what we’re doing. And India is all about scale and capital. Then we have the intention and strategy to deploy as much capital to gain volume at lower margin level. We probably answer that as well.
Praneet
Understood. So it was basically capital allocation. The fact that we wanted to prioritize that then we might come here once we sat.
Abhinav Jain
Exactly where a marvel we changed profits and wherever we got higher profits, it’s as simple as that. Whether it be Mexico in any one year or whether it be South Africa or Dubai in any one year or Netherlands or UK and anyone here we are historically placed that is a limited amount of capital pool in a highly intensive capital intensive working capital intensive basically capital goods industries. And rather than optics we really focus in the corner and business order. We have developed so much customer base in so many countries and now with incremental capital we can cater to multiple, you know, geographies.
And even like Mexico had this tariff pause and different and temporary stage where people were you know, postponing their order to few next month or something. We had called Africa Check. We focused there and we had the customers, we pushed machines over there and we were able to immediately pivot. So this is the whole point, right? Rather than optics or you know, putting things on books or numbers or something really focus on underlying regression.
Praneet
Understood. Thank you so much for your patience. I just wanted one more thing is regarding.
operator
Thank you sir. As there are no further questions from the participants I now hand the conference over to Ms. Chanini from Equibrigex Advisors Private Limited for closing comments.
Chandni Chande
On behalf of Jinkuchel Industries and EquipRidgex Advisors I thank everyone for taking the time to join today’s earnings call. If you have any queries you can connect to us@infoquibrejx.com Once again thank you for joining the conference. Thank you. Abhinav sir, thank you.
Abhinav Jain
Thank you.
operator
Thank you on behalf of Equip Rejects Advisors Private Limited. That concludes this conference call. Thank you for joining us and you may now disconnect your lines. It.