JNK India achieves 47% revenue surge in H1 FY25, but profits falter

JNK India Limited, a leading name in heating equipment manufacturing, has posted stellar revenue growth for the first half of FY25, despite grappling with a notable dip in profits. The company reported a remarkable 47% year-on-year increase in total revenue, reaching ₹1,981 million, compared to ₹1,348 million in H1 FY24. However, this robust growth came alongside a 12.3% drop in Profit After Tax (PAT), settling at ₹141 million with a margin of 7.1%.

The Thane-based firm, renowned for its innovative solutions in process fired heaters and renewable energy systems, highlighted mixed financial performance in its earnings report dated November 15, 2024. Operating profit climbed 16.2% to ₹690 million, reflecting a margin of 34.8%, while EBITDA saw a contraction of 10.5%, marking ₹276 million for the period.

Financial milestones and challenges

While the revenue surge reflects the strength of JNK India’s market presence, other profitability metrics showed signs of strain. Profit Before Tax (PBT) dropped 22.8% year-on-year to ₹191 million. The company attributed this decline to elevated operational costs and a shifting product mix impacting margins. Return on Equity (ROE) and Return on Capital Employed (ROCE) were recorded at 8.1% and 9.2%, respectively.

Despite these challenges, JNK India’s order book stood strong at ₹13,116 million as of September 30, 2024. Fresh order inflows totaled ₹8,782 million in the first half of FY25, underpinning confidence in the company’s long-term growth trajectory.

Landmark orders boost domestic and global presence

JNK India showcased its ability to secure high-profile contracts, bolstering its position in the heating and energy sectors. Recent wins include:

• A fired heater and reformer furnace project for KBR-CVR Energy in the USA through JNK Global Co. Ltd.
• An engineering, procurement, and construction (EPC) contract for Pemex‘s refinery in Dos Bocas, Mexico.
• A domestic contract with Hindustan Petroleum Corporation Limited (HPCL) for an HP-TDAE unit installation in Mumbai.
• A partnership with Adani-Mundra Petrochem Ltd for a flare package in their green PVC initiative in Gujarat.

Expert perspective on growth trajectory

An analyst familiar with the industry observed that while JNK India’s revenue growth demonstrates its market dominance, the dip in EBITDA and PAT highlights the pressure of competitive pricing and operational inefficiencies. The analyst suggested focusing on operational cost containment and diversifying its product portfolio to sustain profitability.

Embracing renewable energy systems

JNK India is also doubling down on renewable energy. The company’s Solar PV EPC and hydrogen value chain initiatives reflect a strategic pivot towards sustainable solutions. This includes pioneering hydrogen refueling stations, one of which is operational at the Indian Oil R&D Centre in Faridabad.

Outlook remains optimistic

Despite short-term profitability concerns, JNK India’s robust order pipeline and diversification into renewable energy position it strongly for future growth.