Jinkushal Industries Ltd

Jinkushal Industries Ltd — Trading Window closed from 01 October 2026 for unaudited financial results (Standalone & Consolidated) for the quarter and half year ended 30 September 2026 until expiry of 48 (forty-eight) hours after the declaration of aforesaid financial results

Rating Action & Rated Facilities

• Rating reaffirmed: Long-Term BBB/Negative and Short-Term A3+; outlook Negative.
• Total bank loan facilities rated increased to Rs 250 crore.
• CRISIL Ratings Limited is the rating agency.

Rationale

• Promoters' extensive experience in heavy construction equipment.
• Moderate financial risk profile with stable leverage.
• Consolidated with Hexco FZCO and Hexco USA LLC.
• Exposure to cyclicality and large working capital.
• Logistics costs and cross-border regulations add risk.

Outlook & Liquidity

• Outlook Negative due to industry challenges and profitability pressure.
• Liquidity adequate; bank limit utilization around 57%; no near-term maturities.
• Cash accrual expected Rs 15-20 crore annually.

Financial & Capital

• FY2026 consolidated operating income Rs 357.6 crore.
• PAT Rs 12.8 crore; PAT margin 3.6%.
• Adjusted debt/adjusted net worth 0.50x; interest coverage 4.11x.
• Net worth around Rs 200 crore; gearing 0.5x.

Sensitivity

• Rating sensitivities: Upward if revenue grows steadily and working capital improves.
• Rating sensitivities: Downward if revenue falls or margins shrink and GCAs extend.

Material Change

• Bank debt increased; rating reaffirmed with higher facility.

Subsidiary incorporation

• Incorporation of a wholly owned subsidiary in Hong Kong named HEXCO GLOBAL HK LIMITED.
• Incorporation date: 10 September 2026; entity not yet operational.
• Paid-up capital USD 100,000 via 100 shares of USD 1,000.
• Registration No.: 81199260; 100% shareholding by Jinkushal Industries Limited.
• Nature of consideration: cash subscription by Jinkushal Industries Limited.
• Industry: sale/purchase of heavy equipment, machinery, spare parts, etc.
• Related party: becomes related party subsidiary on incorporation.
• Purpose: support and expand Group's international business in East Asia.

PIT 7(2) promoter transfer

• Promoters Sandhya Jain and Anubhavi Jain filed Form C disclosing off-market inter-se transfer by gift.
• Transfer qualifies for exemption under Regulation 10(1)(a)(i) as inter-se transfer between immediate relatives/permitted persons.
• Disclosure made within prescribed timeline under SEBI PIT Regulations 2015.
• Copy of Form C enclosed with the filing.

Promoter gift transfer under Reg 10(6)

• Promoter Ms. Anubhavi Jain gifted equity shares via off-market inter-se transfer.
• Exemption under Regulation 10(1)(a)(i) PIT Regulations; transfer between immediate relatives.
• Detailed disclosure in prescribed format accompanying the filing.

Promoter inter-se transfer

• Promoter inter-se transfer of 1,487,300 shares from Sandhya Jain to Anubhavi Jain.
• Date: proposed transfer on/after 28 August 2026 via off-market gift deed.
• Post-transaction holding: Donee 3.87%, Donor 3.56% of diluted share capital.
• Form of consideration: gift; no monetary consideration disclosed.
• Regulatory approvals: not specified; intimation filed under SEBI SAST Reg. 10(5).
• Industry/sector: not disclosed; background not disclosed in filing.
• Target background: Jinkushal Industries Ltd; formerly Jinkushal Industries Private Limited.
• Size/scale: turnover not disclosed.
• Pre-transaction shareholding: Donor 2,853,472 shares (7.43%).
• Post-transaction shareholding: Donee 1,487,300 shares (3.87%); Donor 1,366,172 shares (3.56%).

Financial Performance

• Standalone revenue: INR51.29 crores in Q1 FY27, up 37.4% YoY.
• Consolidated revenue: INR56.57 crores in Q1 FY27, up 15.9% YoY.
• Standalone PBT: INR4.15 crores; PAT: INR3.31 crores.
• Consolidated PBT: INR3.04 crores; PAT: INR2.20 crores.
• Shipping/logistics: Standalone INR3.86 crores; Consolidated INR4.72 crores.
• Employee benefits expense (consolidated): INR3.83 crores.

Geography & Growth

• Africa accounted for approximately 32% of revenue in Q1 FY27 vs 4.47% in Q1 FY26.
• Inventory: Consolidated INR96.8 crores; overseas subsidiaries INR84.4 crores.
• HexL brand: ongoing product development, international marketing, and distribution development.

Liquidity & Working Capital

• Inventory overseas focus to improve availability; capital deployed into inventory.
• Debtors increased due to overseas expansion; longer shipping times affecting cycles.

Outlook & Targets

• Long-term revenue target: INR600 crores to INR700 crores; horizon 2–3 years.
• HexL pricing: 20%–40% price advantage vs global brands; long-term PAT 12%–15%.
• HexL profitability plan: 12%–14% PAT levels estimated; nascent stage with marketing costs.

Q&A Highlights

• No single geography winner; Africa, LATAM, Middle East all growth opportunities.
• Inventory conversion expected in about 2 quarters; replenishment thereafter.
• Freight costs elevated; some pass-through to customers; profitability still under pressure.
• Debtors rising due to overseas penetration; shipping times longer; churning remains healthy.

Meeting Details

• Date/time and event: 19 August 2026, 11:00 IST; Q1 FY27 Earnings Call.
• Recording: audio recording available on the company’s investor site.
• Purpose: discuss Q1 FY27 earnings results.
• Discussions based on generally available information; UPSI not discussed.

Business snapshot

• Largest non-OEM Indian exporter of construction machinery; three verticals: new, used/refurbished, HexL.
• Asset-light model with contract manufacturing and refurbishment; includes rentals and warehousing.
• HexL backhoe loaders launched 2024; Dubai subsidiary established 2023.
• Exports account for ~99% of revenue; serves 35+ countries; 2,500+ machines exported since 2017.
• Top-5 customers contribute ~85% of FY26 revenue.

Operational milestones

• Listed on BSE/NSE on 3 Oct 2025; IPO subscribed 65x.
• Overseas footprint: Dubai hub for MEA; USA for Americas.
• 3 independent directors added to board in 2025; Abu Dhabi step-down subsidiary planned 2026.

Financial performance

• 5-year revenue CAGR: 36.09% (FY26).
• ROE 28.30%, RoCE 18.39%, RONW 21.22% (FY26).
• Debt-to-Equity ~0.50x.

Strategic priorities

• Expand HexL own-brand portfolio; diversify suppliers and channels.
• Increase global penetration; enhance working capital efficiency; invest in digital platforms.
• Introduce electric construction machines as part of HexL lineup.

Risks & governance

• Top customer concentration risk: 85% of FY26 revenue.
• Export-reliant model exposed to freight, currency and trade policies.
• Governance strengthened with independent directors; Abu Dhabi subsidiary aids risk diversification.

Leadership & structure

• Promoter-family leadership: Chairman & ED; MD & CEO; CFO.
• Six-member board with three independents; professional management team.