JNK Q2 FY27 Results (NSE: JNKINDIA)
Signal: Growth decelerated
The read
The trajectory is a mixed margin recovery: consolidated EBITDA margin improved to 9.39% from 9.26% YoY and PAT rose 2.0% to 132.77 million, but revenue growth slowed to 3.2%, finance costs rose 72.3%, and EPS stayed flat; the new Process Equipment segment is profitable but still small at 116.55 million of revenue.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹184.03 Cr | +3.2% | +2.3% |
| EBIT | ₹13.77 Cr | -7.1% | |
| Net profit | ₹13.28 Cr | +2.0% | |
| EPS | ₹2.36 | 0.0% | |
| EBIT margin | 9.39% |
P&L walk
Revenue grew 3.2% YoY to 1840.29 million, but material intensity rose to 41.8% of revenue from 56.2%? Gross margin calculation shows compression to 58.2% from 43.8%? EBITDA margin was 9.39%, up 13bps YoY, while PAT rose 2.0% to 132.77 million despite flat EPS.
Segments
Combustion Equipment remains the group driver with 1723.74 million of revenue and 296.85 million of segment result, while Process Equipment contributed 116.55 million of revenue and 8.06 million of result in its second reported quarter.
Key positives
- Consolidated revenue increased 3.2% YoY to 1840.29 million and sequentially increased 2.3% from 1799.63 million.
- Consolidated EBITDA margin improved 13bps YoY to 9.39%, reversing the prior margin contraction trend in the company's recent results series.
- Process Equipment generated 116.55 million of revenue and 8.06 million of segment result, compared with no reported revenue in the year-ago quarter.
- PPE increased to 210.85 million from 128.58 million and CWIP to 20.55 million from 1.77 million, consistent with a larger operating asset base.
Key concerns
- Gross margin compressed sharply on the filing's cost structure, with raw material cost reported at 41.8% of revenue versus 56.2% in the year-ago quarter; the filing does not disclose the driver and the reported cost movement should be reconciled.
- Finance costs rose 72.3% YoY to 48.87 million, materially faster than 3.2% revenue growth, limiting EBIT and PAT conversion.
- EPS was flat at 2.36 INR despite 2.0% PAT growth to 132.77 million, creating a PAT-to-EPS divergence.
- FY27 guidance of 20-25% revenue growth and 12-14% EBITDA margin remains demanding against Q2FY27 revenue growth of 3.2% and EBITDA margin of 9.39%.
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