JNK India Ltd. - Growth visibility strengthens - Company Update

JNK’s 4QFY26 performance was a beat to our estimates driven by better execution of Reliance & HPCL orders and incremental contribution from Chemdist JV. Margins improved due to ramp-up of high-margin orders (Reliance, HPCL) and diminishing legacy low-yield projects. With a robust opening order book of ~Rs 19.6bn for FY27E, backed by the Ultra-mega BPCL Bina order (to be executed within 18months) and improving export opportunities, we believe JNK has secured not only strong growth for FY27E but also meaningful visibility for FY28E. Further, we will keep a close watch on conversion of large export opportunities especially from Dangote refinery, where JNK has an established past track record and once received, can augment growth for FY28E. We have revised our estimates upwards by +8%/11% for FY27E/FY28E respectively, to account for the better order execution and expect a strong Revenue/EBITDA/PAT CAGR of 18%/31%/26% over FY26-28E. We increase our TP to Rs 460 (Rs 400 earlier) and move to Accumulate rating due to sharp rally in share price (limited upside).

Strong revenue growth; execution materially ramps up in 4QFY26:

JNK reported a 77% yoy growth in 4QFY26 revenue at Rs 3.4bn, materially ahead of our expectations, led by strong execution of Reliance and HPCL projects as well as better-than-expected completion of residual legacy orders. The company additionally benefited from smoother execution under the cost-based revenue recognition framework for new projects. Revenue contribution from the Chemists JV stood at Rs 353mn in 4QFY26. FY26 revenue grew by 72% yoy to Rs 8.2bn.

Margins continue to improve sequentially:

EBITDA margins increased by 395bps yoy and 85bps qoq to 13.6% in 4QFY26, as the contribution from high-margin new orders further increased and the drag from legacy projects nearly exhausted. Margins were marginally impacted by process equipment sales at Chemdist. This translated into a 149% yoy and 78% qoq jump in EBITDA at Rs 462mn. PAT grew 150% yoy and 87% qoq to Rs 330mn. For FY26, EBITDA grew by 98% yoy to Rs 919mn; resulting into margins of 11.2%; +140bps. PAT grew by 115% yoy to Rs 648mn.

Growth visibility extends into FY28; export pipeline remains key monitorable:

JNK closed FY26 with one of the highest-ever order books of ~Rs 19.6bn, which provides strong visibility for FY27E and meaningful support for FY28E growth as well. Reliance and HPCL projects are nearing completion by 1QFY27E. The margins are expected to even out across the year due to the change in accounting policy (for new projects) of recognising revenue on cost basis vs project completion basis previously. The margins are expected to further improve sequentially as legacy orders gets completed. With the very large Rs 15.5bn BPCL Bina order booked in 2HFY26 for cracking furnace, we find that JNK is secured for strong growth in FY27E. The export pipeline remains robust with ~Rs 40bn of opportunities across Middle East, Africa, Russia and fertilizer projects, including the Dangote refinery expansion opportunity. We will keep a close watch on the bid book pipeline, which can further improve growth for FY28E. We have revised our estimates upwards by +8%/11% for FY27E/FY28E respectively, to account for the better order execution and expect a strong Revenue/EBITDA/PAT CAGR of 18%/31%/26% over FY26-28E.

Valuation and rating:

We value JNK at 25x (unchanged) FY28E PAT to arrive at TP of Rs 460 (Rs 400 previously). We move to Accumulate rating (previously BUY) due to a sharp rally in share price (limited upside). Increase in TP is due to upward revision in earnings and valuation rollover. Key risks: Delay in new order bookings and order execution.

Company website: https://www.jnkindia.com/

*CMP is as per report published date

Click to download the full JNK India Ltd. Q4FY26 Company Update

Analyst:

• Sahil Sanghvi - Research Analyst, Institutional Equities (NISM-201900004744)
• Uvais Khatri - Research Associate, Institutional Equities (NISM-202300049054)

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FAQs on JNK India Ltd. Q4FY26 Company Update

What drove JNK India’s strong Q4FY26 performance?

Strong execution of Reliance and HPCL projects, improving contribution from Chemdist JV and higher share of high-margin projects supported robust revenue and margin growth.

How strong is JNK India’s order book?

JNK India ended FY26 with an order book of nearly Rs19.6bn, supported by large refinery and industrial heating projects including the BPCL Bina order.

What are the key growth drivers for JNK India?

Key growth drivers include refinery capex, export opportunities, execution of BPCL and HPCL projects, margin expansion and strong demand for industrial heating solutions.

What risks should investors monitor?

Major risks include delays in order execution, slower conversion of export opportunities and postponement of refinery and petrochemical capex projects.

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