JNK India Ltd (NSE: JNKINDIA) Q1 2026 Earnings Call dated Aug. 11, 2025
Corporate Participants:
Unidentified Speaker
Arvind Kamath — Chairperson and Whole Time Director
Pravin Sathe — Chief Financial Officer
Analysts:
Unidentified Participant
Akshit Gangwal — Analyst
Kamlesh Bagmar — Analyst
Jainam Doshi — Analyst
Paresh Raja — Analyst
Presentation:
Unidentified Speaker
Sadies and gentlemen, good day and welcome to JNK India Q1FY26 earnings conference call. The call will begin shortly. Please stay connected. Ladies and gentlemen, welcome to GNK India Q1FY26 earnings conference call. Please stay connected. The call will begin shortly.
Unidentified Speaker
Foreign.
operator
Ladies and gentlemen, good day and welcome to the JNK India Q1FY26 earnings conference call hosted by IIFL Capital Services Limited 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 the conference call, please signal an operator by pressing Star then zero on your touchstone telephone. Please note that this conference is being recorded. I now hand the conference over to Mr. Aksit Gangwal from IFL Capital Services Ltd. Thank you. And over to you sir.
Akshit Gangwal — Analyst
Thank you, Shruti. Good morning everyone. On behalf of IFL Capital, I welcome everyone to JNK India’s 1Q FY26 earnings call. We have with us today Mr. Arvind Kamath, Chairperson and Whole Time Director, Mr. Praveen Sathe, Chief Financial Officer and Ms. Annie Vargie, Senior Manager, Investor Relations. Without further delay, I will now hand over the call to the management for their opening remarks which will be followed by Q and A. Over to you sir.
Arvind Kamath — Chairperson and Whole Time Director
Good morning everyone. I am Arvind Kamath, Chairperson and whole time Director of J and K India. Thank you for joining us today for our Q1 FY26 earnings call. We appreciate your continued interest and engagement as we begin the new financial year. The first quarter of FY26 was centered around project execution. Our teams remained focused on delivering ongoing assignments across domestic and international markets. While the quarter did not see any significant order inflows operational activities remained steady with delivery efforts aligned to client milestones. Total revenue for the quarter stood at Rupees 1,030 million reflecting a year on year growth of 13.5%.
As of June 30, 2025, the company’s order book stood at Rs. 9,828 million comprising 79.4% from heating system, 12.8% from process plants and 7.8% from flares, incinerators and other renewables. Domestic orders accounts for 90.9% of the total order book ensuring strong revenue visibility going forward. India’s refining and petrochemical industry continues to report stable growth supported by strong domestic demand and expanding infrastructure. At the same time, the country’s transition towards renewable energy and green hydrogen is accelerating creating new opportunities for engineering and technology led solutions in the energy and industrial sectors as well. Aligned with these developments, the Company has entered into a joint venture agreement post the quarter with Mr.
Sunil Dhole and Mr. Tushar Wag, founders of Chemdist Group, to develop green hydrogen and other sustainable fuel technologies and also critical engineered equipment in chemical and pharma industry. JNK India will hold a 51% equity stake in the newly formed entity. This initiative enhances our entry into the emerging green hydrogen segment and also chemical segment, enabling JK India to expand its offering beyond conventional combustion equipment and into clean energy process infrastructure. This JV will also provide access to international expertise, support technology co development and create potential for participating in upcoming green Hydrogen projects in India and overseas.
Looking ahead, we remain focused on delivering our existing order book with discipline and technical precision. Our integrated capabilities across fire heaters, cracking furnaces, incinerators, flares and process plants enable us to serve the evolving needs of refining petrochemical, fertilizer and clean energy sectors. Backed by strong engineering depth and modular manufacturing at Mundra, JK India is well placed to support complex energy infrastructure needs both in India and select global markets. I would also would like to highlight that in the existing execution of Reliance project at Nagothhane, Bechtel has given us a special mention of safety for JMK India team.
With this I would like now to invite our CFO Mr. Praveen satay to take you through the financial performance for the quarter. Thank you.
Pravin Sathe — Chief Financial Officer
Good morning everyone and thank you Mr. Kamath. I am Praveen Sathya, CFO of JNK India. I will now present the financial performance for the quarter. 1 FY26 for the quarter ended June 30, 2025, the company recorded a total revenue of 1,030 million reflecting a year on year growth of 13.5%. Operating profit for the quarter was 242 million with an operating margin of 23.5%. The EBITDA stood at 72 million translating to a margin of 7% compared to 13.4 in quarter one of FY25 and 13.8 in quarter four of FY25. Profit before tax stood at 20 million with a margin of around 2% while profit after tax was 11 million representing a margin of 1.1%.
The margin compression during the quarter was primarily due to the legacy projects under execution which impacted the overall profitability. As mentioned in our earlier conversations, we have now transitioned our revenue recognition model to suit the evolving company from a fired heater company to the present day structure. Earlier we followed the practice of output method and we adopted the input method in H2 of FY25. Hence, the projects awarded in FY25 were based on the new revenue recognition model. In quarter one FY26, the substantial revenue came in from earlier projects and the balance from the new ones.
Similarly, the cost incurred for the earlier projects found majority of the quarter’s operating expenses whereas the remaining cost attributed to the new projects. This highlights that there are no concerns in the operations and profitability as such, but it’s a temporary pain due to some formal projects which continue to incur higher costs. Additionally, certain projects under execution continue to face delays which have added to the cost. The impact of higher cost related to the earlier projects is likely to continue in quarter two FY26 as well. On the employee cost front, the employee cost net of esop expenses in Q1FY25 as compared to to the employee cost in Quarter 1FY26, there is an increase of 15.5% year on year.
We continue to focus on the disciplined execution, cost control and alignment of internal systems to support the timely delivery. The company remains committed to improving operating margins through the better project planning, engineering productivity and the scale benefits across our ongoing order pipeline. Thank you for your attention and we now welcome your 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 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 Kamlesh from Lotus Asset Managers. Please proceed.
Kamlesh Bagmar
Yeah, thanks for the opportunity, sir. I had multiple questions so firstly on the revenue guidance and on the EBITDA margin guidance. So in last quarter we had given a guidance of 40 to 50% revenue growth and margins of roughly around 12 to 13%. So are we sticking with that or has there been any change over there?
Pravin Sathe
The guidance for the yearly growth of revenue and the EBITDA margin remains the same, what you have mentioned. We still stick to that.
Kamlesh Bagmar
Okay. And sir, any update on the orders? Like some order from this one Oman defined. And Bharat Oman Refinery as well. Bharatomar refinery which is now BPCL owned. So any order update on that particular side or. Or from Reliance or any other project?
Arvind Kamath
Yeah, Kamlesh, I mean, okay. Regarding the order finalization in the quarter one, there was one large finalization which unfortunately didn’t Come in our way. And in quarter two there are two finalizations are expected anytime including the one which you mentioned, that is BPCL Bina and there’s one more as well. So. So we are just waiting for the order finalization anytime. But these two orders are to be expected to be finalized anytime.
Kamlesh Bagmar
Now can you broadly guide us how much would be the size of that ballpark? Not an exact failure.
Arvind Kamath
Both this finalization will be actually bid by the JNK Global from Korea based on the whatever the, you know the criteria in terms of the bid qualification criteria was involved. So these two projects roughly could be anywhere between 2 to 3,000 crores.
Kamlesh Bagmar
Great, great. And sir, lastly when we came out with the IPO like your margins and revenue were like say in the boom stage. And now if we see this legacy particular thing. So for a size of thousand crore order book, how can we have such legacy order book because like so it’s surprising that a margin from a level of 15 20% dips down to as low as 10%. So for a shareholder, so how can we guard or protect the shareholders from such a high volatility and when we have such a high precision in the technology and we have such a big upper hand over the technology.
So how can these things happen of legacy order book where our margin like say go from double digit to single digit as low as 4 or 5%.
Pravin Sathe
Yeah Kamlesh, as we said earlier that this legacy order book is likely to get over by the Q2 of FY26. And we have explained earlier also that due to the output method of revenue recognition we were following the margins quarter on quarter were not stable because it is based on the milestones and certain milestones have a high profit margins and certain have a lower profit margins attributable to the project life cycle. 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 FY25.
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.
Kamlesh Bagmar
And going forward all the orders which we are winning. So there are 12, 13% margins is we are factoring in there?
Pravin Sathe
Yes.
Kamlesh Bagmar
Great sir. Thanks a lot sir.
operator
Thank you. The next question is from the line of Jainam Doshi from Chris pms. Please proceed.
Jainam Doshi
Good morning sir. So just wanted to understand like what would be the execution timeline of the current order book which we have and what are the sustainable EBITDA margins we are targeting post the completion of the legacy orders which we have.
Pravin Sathe
The current order book would get executed up to quarter one of next financial year. That is Q1 of 27. 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.
Jainam Doshi
Okay.
Jainam Doshi
And sir, in the previous con call you had mentioned that there will be some kind of a spillover effect from Q4 into the Q1 of this year. So if you can quantify the amount of that spillover in the current quarter which we have executed.
Pravin Sathe
You mean the spillover from the old projects?
Jainam Doshi
Yes, spillover from the Q4 of the earlier years?
Pravin Sathe
Yeah, the spillover from the earlier Q4 is the major portion in this Q1 and that is the reason the margin has also been impacted.
Jainam Doshi
So if you go to quantify.
Arvind Kamath
We.
Pravin Sathe
Can get back to you one on one for this.
Jainam Doshi
Sure, sure sir, thanks. Thanks a lot.
operator
Thank you. Before we take the next question, we would like to remind participants that you may press Star and one to ask a question. The next question is from the line of Paresh Raja from Imap India. Please proceed.
Paresh Raja
Good morning Mr. Kamath.
Paresh Raja
Can you hear me?
Arvind Kamath
Good morning. Good morning Parish. Yeah, we can hear you.
Paresh Raja
So you mentioned about forming a JV with two individuals for hydrogen and other technologies. Could you throw some more light in terms of what is the expected date of commercial production, what is the additional capex which is required and what is the likely revenue in the first year and what is likely, you know, what would be the peak revenue and what is the profitability in this JV?
Arvind Kamath
Yes, Paresh, we have entered into the JV agreement about two weeks back. We have signed a JV agreement with Mr. Sunil Dole and Mr. Tushar Wag. They were the founders of Chemdist Group. And Chemdist Group is already into manufacturing, engineering and manufacturing of critical equipments like reactors and distillation columns, scrubbers, etc. For the chemical and pharma industry. And they’re also developing green hydrogen technologies and also other sustainable fuel technologies. So we as JNK see larger opportunity if we can support them and grow in a bigger way. And that’s the basic essence of this jv. And in terms of the financial what you asked, we would be supporting them in terms of the working capital mainly.
So the extent of working capital support could be about 50 crores or so in the first year. And initial equity is about 51 lakhs. And also the initial investment is about 10 crores in the company by way of preference capital. Yeah, this is by way of preference capital. And in terms of the revenues, they already have certain order book which will be started in JV from this year itself. So in this financial year itself we would see a certain amount of revenue which could be about say 10%, around 8 to 10% of JK India’s revenue.
So going forward in two to three years time, we look forward to a revenue growth in the new company. In the new JV business which is about 10 to 15% of J and K India’s revenue and maybe up to 5 years we can look at something like 15 to 25% of JK India’s revenue in the new JV business which is focused mainly on the specialized chemical equipment and the special technologies of green hydrogen and other technologies. And they also export to countries like Saudi and other Middle east countries as well.
Paresh Raja
Okay, what is the likely profitability from the projects that we’ll do?
Arvind Kamath
The likely profitability of EBITDA could be anywhere between 10 to 12%.
Paresh Raja
Okay, my second question is pertaining to the orders which get routed through JNK Korea. You mentioned that there’s an order finalization which is likely to happen to the tune of maybe 2000, 3000 crores. So would this be completely to JNK India or is it into multiple parts and we may get part of the order?
Arvind Kamath
There is. I mean yeah, just considering the size of the projects, you know, the large size of the projects which is there. So it could be one job which is there, which is a smaller one that will be on a complete back to back basis. But. But the other larger job which is under finalization that would be on a part basis. Depending on the situation and depending on the process though, we will be actively and majorly involved in the execution. JNK India will be doing a lot of things as well.
Paresh Raja
Okay, can we expect the order finalization in the month of August?
Arvind Kamath
That would be bit difficult to say. But we are quite confident that at least out of the two jobs, one job will get finalized in this quarter at least.
Paresh Raja
Okay, thank you. That’s it from my side.
Akshit Gangwal
Thank you.
Arvind Kamath
Thanks.
operator
Thank you. Participants who wish to ask a question may please press star and one at this time. The next question is from the line of Jainam Doshi from Chris pms. Please proceed.
Jainam Doshi
Yes sir. So one, thank you for the follow up. One question which I had is like as we then we might get some part of the bigger order and one of the smaller order. So do we have the bandwidth in Terms of the execution and also the existing capex is sufficient or we would require any further capex for it if you could elude it.
Pravin Sathe
Yeah. About the bandwidth, Mr. Kamath will enlighten. But so far as the capex is concerned I would like to inform you that there would not be any additional capex required.
Arvind Kamath
Yeah, just on the bandwidth. Okay. Depending on the obviously the size of the project there could be only bandwidth. What we would require more would be the people and certain softwares and we are gearing up to that and I think we will be able to handle it as it comes. Should not be an issue for us.
Jainam Doshi
Sure, sure.
Akshit Gangwal
Thank you.
Jainam Doshi
That is from my.
operator
Thank you. Participants who wish to ask a question may please press star and one at this time. The next question is from the line of Kamlesh from Lotus Asset managers. Please proceed. Mr. Kamlesh, your line has been unmuted. Please proceed with your question.
Kamlesh Bagmar
So with regard to the order book like we had highlighted that it would be 2 to 3,000 crore. So would it be R share, GNK Indian share or you are talking about the group share?
Arvind Kamath
Yes Kamlesh, the 2000-3000 crore order finalization is on JNK Global. And our share we will have to derive exactly depending on the which project and you know what will be the exact our activities will be for that particular project.
Kamlesh Bagmar
But sir, usually on the past experience basis how much share we used to get from the JNK Global.
Arvind Kamath
See on a smaller project it would be. And 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, you know, BGs or the LC’s and the foreign components then it can range anywhere about 30 to 70%.
Kamlesh Bagmar
But since it’s a Indian project only domestic product project, so can we say that it would be around 90, 100%?
Arvind Kamath
No, no, that way it would be difficult to say. It would be because it also involves a lot of foreign components and certain this thing. So. And because of the size of the opportunities which are there. So it would not be to that extent.
Kamlesh Bagmar
And so beyond this, how are we seeing the pipeline of orders going forward.
Arvind Kamath
Beyond these orders, beyond these two finalization in this quarter, There is two more finalization lined up in the next quarter. So generally pipeline as we said in the previous call as well is quite healthy. There are projects lined up in India and in the exports as well.
Kamlesh Bagmar
Okay, so where do we see this pipeline of 950 odd crore or order book to go up to like say by the year end.
Arvind Kamath
The exact, it’s difficult to, you know, guide the exact numbers in terms of the order book. But there is a order finalization expected in this financial year which is about say 3000 crores or so. And out of that now how much share we will get is what we will have to see. But what we have seen in last couple of years is we have been able to have a healthy order inflow and healthy order backlog as we are going not only for, you know, with the visibility of around one and a half years to two years kind of our revenue.
So we quite confident that we should be able to achieve it in this year as well.
Kamlesh Bagmar
And sir, lastly, with the given capacities which we have, which we have, so how much maximum revenue we can do.
Pravin Sathe
Capacities in the terms of Kamlish, can.
Kamlesh Bagmar
You be little elaborate like say the. The working capital wherewithal which we have and 5,000 tons of capacity which we had highlighted in our presentation or the space which we have available, how much maximum or optimization of revenue we can do on a yearly basis.
Pravin Sathe
See Kamlesh Working capital, current working capital facilities can be enhanced if we get the orders. So we can’t say that there is no static ness in that. So capacity as such is a flexible term.
Kamlesh Bagmar
Okay, got it. Thanks. Thanks a lot sir. Thank you.
operator
Thank you. Before we take the next question, we would like to remind participants that you may press STAR and one to ask a question. The next question is from the line of Mr. Akshat Gangwal from IIFL Capital. Please proceed.
Akshit Gangwal
Yeah, hi. Thanks for the opportunity. Just wanted to check on the status of you know, the two big projects, Reliance and hpcl. Are we on track? Last time I think you had mentioned 3Q 4Q of this year. So are we on track with those projects?
Arvind Kamath
Hi Akshay. Yeah, the project execution is going on in full swing and both the sites at HPCL and Reliance deployed the necessary manpower XI to ensure that things go on track and go on time. So definitely they are would be delivering the revenues in terms of Q3, Q4 and finally, worst case, in the Q1 of next financial year, we’ll be able to complete both the projects.
Akshit Gangwal
Understood. And since these projects make up most of your order books, so I would assume that. And the newer ones as well. So these are the ones that will give you the margin jump going from 3Q onwards as well, right?
Arvind Kamath
I mean, yeah. Basically you know, we have changed the accounting methodology to ensure that we don’t have that kind of EBITDA variation or EBITDA depending on the outputs or the deliverable. So that we would see a basically a constant EBITDA from Q3 onwards.
Akshit Gangwal
Right. But to achieve the since we have the margins for 1Q were quite low and similarly for 2Q also from what I gathered from earlier comments is that 2Q will also see some pain but from TQ onwards we will need some jump in margins. Right. To get to the 13, 14% guided range.
Arvind Kamath
Yeah, yeah, that’s correct Akshat. And also because of the revenues also would be larger. So that will also have a compensating effect because Q1 generally the revenues are much lower.
Akshit Gangwal
Right. And sir, just the jump in the employee costs net of ESOP that you mentioned, about 15.5%. So 4Q was a big drop. The reasons mentioned were change in employee remuneration plans, bonuses and all of those reasons. So why the, why the jump again this quarter?
Arvind Kamath
Basically the increment is given in the, you know, the first quarter of the financial year. So that indicates the, you know, the jump. And also we have added more manpower in terms of the execution and also to gear up to the, you know, new pipeline. So these are the two major reasons. And what you mentioned about the last quarter of the last financial year, it because we didn’t give incentives for the previous year considering the overall performance.
Akshit Gangwal
Understood, Understood. So going forward, net of these incentives. Now since 1Q is done with the incentives and no more ESOPs as well, what can be the expected employee cost range that we can consider?
Pravin Sathe
See, we can’t predict the range as such right now because as Mr. Kamath said, these two projects are getting finalized in this quarter. So we may have to hire certain critical personnel depending on the requirement. But we can say that the employee cost will be optimally managed and as per the industry standards, the percentage will be within the limits.
Akshit Gangwal
Sure. And just one final question on the order pipeline again. So you mentioned about 3000 crores of order finalizations expected in FY26. And since our current order book should get exhausted by 1Q FY27. So what is the expected conversion ratio that you’re looking at out of these 3000 crores. I understand you mentioned 1.5x2x of revenues, but still, I mean going forward, if we have to, you know, build in our numbers based on what the order book could look like, what the execution cycle will be because the current quarter, the current order book getting executed by 1QFY27, then beyond that, given the project execution cycles, everything, how should we build our, you know, estimates what could be basis, no orders in the current quarter as well.
So going forward are the ones that we’ll see the newer ones coming in, right?
Arvind Kamath
Yeah. Akshay, historically our hit rate has been about 25% of whatever has been finalized. And just as I said in the Q1, there was already one large finalization which we have lost. So. So the balance hit rate we can see. I mean, like, you know, we expect better hit rate in comparison with that because we already lost one job in the Q1. And in terms of the execution, yes. I mean, Q1, but some of the commissioning and et cetera could also spill to Q2 of next year. So that’s why we are confident that we’ll have enough order backlog by the end of this here.
Akshit Gangwal
Okay, understood. That’s it. From my side. Thank you so much.
Arvind Kamath
Thanks, Akshay.
operator
Thank you. Before we take the next question, we would like to remind participants that you may press Star and one to ask a question. The next question is from the line of parish from IMAP India. Please proceed.
Paresh Raja
Mr. Kamad. Who would be the competitor companies who participate in this BPCL bid? And also in the Reliance on HBCL.
Paresh Raja
Build.
Arvind Kamath
HPCL was Thermax and Reliance was Technip. And in bpcl Bina, it is Lassen and Tubro. So this was practically. There was only one competitor in all these three bits.
Paresh Raja
Okay.
Paresh Raja
Okay. Thank you.
operator
Thank you. To ask a question, please press Star and one now. As there are no further questions, I would now like to hand the conference over to Mr. Akshay Gangwal for his closing comments. Over to you, sir.
Akshit Gangwal
Thank you, Shruti. On behalf of IFL Capital, that concludes the conference, I would like to thank the management for their time and giving us the opportunity you to host the call. Thank you everyone for joining us. And you may now disconnect your lines.
Arvind Kamath
Okay.
operator
Thank you.
Arvind Kamath
Thank you, Akshat. Thank you, everybody.
Pravin Sathe
Thank you, everyone.
operator
Thank you. On behalf of Capital IFL Capital Services Ltd. That concludes this conference. Thank you for joining us. And you may not disconnect your line. It.