Jash Engineering LtdQ3 FY23Industrial Manufacturing

Jash Engineering Ltd

Q3 FY23 Earnings Call Analysis

Management growth scorecard

Revenue

Category 2

Margin

Category 1

Fundraise

Yes

Order

Yes

Capex

Yes

4 of 5 growth signals are positive — a strong management growth story.

Revenue guidance

Category 2

→Confident of achieving projected revenue and profitability for the current year (Rs.515 crores consolidated revenue).
→Expect to move around Rs.500 crores worth of orders in the next 5 months, potentially reaching an order book of Rs.800-1000 crores.
→Conservative revenue projection for next year is Rs.600-625 crores.
→US business projected to have annualized growth in excess of 20% with order book exceeding $50 million.
→Rodney Hunt is expected to grow rapidly, targeting revenue of more than $50 million soon.
→Focus on exports continues, with about 65% of total revenue expected in the second half of the year.
→New capacity expansions underway in Chennai, Houston, and existing plants to support future growth.
→Products from Jash Invent JV are expected to capture Rs.75-100 crore potential in Indian markets.
→Long-term aim includes achieving incremental profitability with PAT of at least 14%.

Category 1

→Confident of achieving projected revenue of Rs.515 crores consolidated for FY24, with potential to grow to Rs.600-625 crores next year.
→EBITDA expected to improve from last year’s 19-20% to approximately 21-22% for current year.
→PAT target of at least 14% in the medium term through incremental profitability improvements.
→Strong US growth: $26 million projected revenue for FY24 with order book exceeding $50 million; US business losses reduced significantly.
→New plants in Chennai and Houston expected to expand capacity beyond current Rs.600-650 crore production limit, supporting future scale-up and growth.
→Rodney Hunt business forecasted to surpass $50 million revenue soon, expected to become a dominant and highly profitable segment.
→Focus on export markets with 60-65% revenue expected in the second half, aiding profitability.
→Product range expansion and acquisitions (Waterfront, Invent JV) to drive future growth and margin enhancement.

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Yes

→The company intends to raise funds to the tune of Rs. 80 crores.
→The fundraising is planned to support bonding requirements and acquisition of Waterfront.
→The method of fundraising is tentative and could be either through issuance of preferential shares or a Qualified Institutional Placement (QIP).
→The decision on the fundraising method will be finalized in the coming week (from the time of the call).
→This indicates a likely future equity raise rather than debt.

Yes

→Current consolidated order book stands at Rs. 837 crores.
→More than 60% (Rs. 597 crores) of orders are from outside India.
→US order book is close to $50 million, showing strong presence and growth.
→Recent significant orders include a $10.5 million order in America and potential orders over $15 million in Hong Kong and $25 million in America under negotiation.
→For the next 5 months, the company expects to add about Rs. 500 crores of orders.
→Starting next year, order book expected in the range of Rs. 800-1000 crores.
→Order execution timelines vary; some projects have later delivery schedules.
→Overall order pipeline remains strong with Rs. 29 crores already negotiated and Rs. 24 crores under intense negotiation.

Yes

→Construction of new plant in Chennai ongoing, expected ready by next year to enable significant scaling up.
→Setting up a plant in Houston; preliminary drawings completed and city approval sought by year-end.
→Planning to raise around Rs. 80 crores for bonding requirements, Chennai plant, and UK acquisition (Waterfront) via preferential shares or QIP.
→Investments in new cranes at old unit II bays (2, 3, and 4) to enhance efficiency and output, targeted for completion by December quarter.
→Acquisition of Waterfront (UK) expected to complete by end of this financial year to expand market presence.
→Focus on expanding product portfolio through technical collaborations and acquisitions to increase market share globally.

How does Jash Engineering Ltd rank vs peers in Industrial Manufacturing?

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