Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Jash Engineering Ltd (NSE:JASH, Financial) reported a significant revenue growth of 61% compared to the same period last year.
- The company has a strong order book position, standing at 873 crore as of November 1st.
- Profit after tax grew by 212%, indicating strong financial performance.
- The company is expanding its manufacturing capabilities with two new facilities expected to be operational by FY26.
- Jash Engineering Ltd (NSE:JASH) is focusing on international markets, with 60% of its revenue coming from outside India.
Negative Points
- Rodney Hunt's performance has deteriorated, although improvements are expected in the next quarter.
- The company faces challenges in the US market due to the 'Build America, Buy America' Act, which requires a significant portion of products to be manufactured domestically.
- There are concerns about low-margin orders affecting profitability, particularly with legacy orders in Rodney Hunt.
- The integration of new acquisitions, such as Waterfront, requires careful management to ensure smooth operations.
- The company's reliance on water control gates, which contribute 49% of revenue, may pose a risk if demand in this segment fluctuates.
Q & A Highlights
Q: Can you provide more details about the JV or technology tie-up for diffusers, decanters, and blowers? What market size do you expect for these products?
A: This is a joint venture and technological tie-up. The products have significant potential, and we expect them to contribute between 25 to 50 crore to our revenue once established. The market size in India for these products is more than 300 to 400 crore. - Unidentified_3 (Chairman and Managing Director)
Q: Are lower raw material prices impacting your operating margins?
A: Lower raw material prices have a minimal effect on our margins. The improvement is mainly due to a better product mix, higher margins on sales, and increased revenue. Raw material costs account for only 30-35% of the total product price. - Unidentified_3 (Chairman and Managing Director)
Q: What is the current status of your order book, and are you seeing any slowdown in bidding activity?
A: Our order book is strong, standing at 873 crore as of November 1st. We expect to close the year with an order book between 850 to 1,000 crore. There is no significant slowdown in bidding activity. - Unidentified_3 (Chairman and Managing Director)
Q: What is the market size for water control gates in India and globally, and what is your market share in India?
A: In India, the market size is between 200 to 250 crore, and our market share is more than 65-70%. Globally, the market is substantial, with the English-speaking world alone accounting for at least half a billion dollars. - Unidentified_3 (Chairman and Managing Director)
Q: How do you plan to address the rising sea level issue, particularly in Singapore and Southeast Asia?
A: We have provided preliminary offers, but projects are expected to start from 2026 and complete over the next 20 years. The potential is significant, but projects will not commence before 2027 or 2028. - Unidentified_3 (Chairman and Managing Director)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
