JNK India's Forward Vision Strong Growth, Margin Recovery

Ashwin Thakker

— 2 min read

Key Facts

  • **Sales Outlook**: Reaffirmed 40% to 50% year-on-year revenue growth for FY26.
  • **Margin Outlook**: EBITDA margins are expected to stabilize at 13% to 15% from Q3 FY26 onwards, recovering from Q1/Q2 pressure due to legacy projects.
  • **Order Book**: INR 9,828 million as of June 30, 2025, providing 1.5 to 2 years of revenue visibility.
  • **New Orders**: Expects INR 2,000 to INR 3,000 crores in order finalizations in Q2 FY26, with additional pipeline into Q3 FY26.
  • **Strategic Growth**: New 51% equity JV for green hydrogen and chemical equipment projected to contribute 8-10% of JNK India’s revenue in FY26, growing to 15-25% in 5 years.

Despite Q1 FY26 experiencing temporary margin pressure from legacy projects, JNK India Limited has reaffirmed its robust annual revenue growth target of 40-50% and anticipates a significant recovery in EBITDA margins to 13-15% from Q3 FY26. The company's strategic shift in revenue recognition, coupled with a strong order pipeline and a new joint venture, underpins a confident outlook for sustained growth and profitability. This analysis delves into the company's forward-looking guidance, recent initiatives, and future trajectory.

JNK India's Q1 FY26 results showed an EBITDA margin of 7%, down from previous quarters, primarily due to higher costs associated with legacy projects still under execution. Management clarified that the impact of these projects is expected to subside, stating,

"this legacy order book is likely to get over by the Q2 of FY '26."

This transition is crucial, as the company moved to an input-based revenue recognition model in H2 FY25 for newer projects. This change aims to reduce margin volatility. CFO Pravin Sathe noted,

"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."

The company anticipates EBITDA margins to stabilize in the 13% to 15% range from Q3 FY26, reflecting the healthier profitability of its newer order book and disciplined execution.

Strategic Order Wins and New Growth Avenues

The company maintains a healthy order book of INR 9,828 million, offering revenue visibility for 1.5 to 2 years. Significant order finalizations are expected, with two large projects, including one from BPCL Bina, anticipated in Q2 FY26, potentially valued between INR 2,000 crores to INR 3,000 crores. Beyond these, a pipeline of two more finalizations is lined up for Q3 FY26. JNK India also expanded its strategic footprint by entering a 51% equity joint venture focused on green hydrogen and specialized chemical equipment. This JV is projected to contribute 8% to 10% of JNK India's revenue in the current fiscal year, growing to 15% to 25% within five years, with an expected EBITDA profitability of 10% to 12%. No additional capital expenditure is required for these growth initiatives, ensuring efficient resource allocation.

JNK India Limited is positioned for a strong recovery and sustained growth from Q3 FY26. The completion of legacy projects, a stable revenue recognition model, and a robust pipeline of new orders are set to drive margin improvement. The strategic joint venture into green hydrogen and chemical equipment further enhances the company’s long-term growth prospects and market diversification. Management remains committed to disciplined execution and cost control, ensuring the company's financial health and strategic objectives are met.

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