23/12/2023
Jash Engineering Ltd
ABOUT
Jash Engineering Limited is manufacturing a wide range of equipment for Water Intake Systems, Water and Waste Water Pumping Stations and Treatment Plants, Storm Water Pumping Stations, Water Transmission Lines, Power, Steel, Cement, Paper & Pulp, Petrochemicals, Chemical, Fertilizers, and other process plants.
Jash offers a single-stop solution under one roof including Design, Casting, Fabrication, Assembly & Testing, and provides the most varied range of these products in the largest possible sizes.
Jash is today an industry leader in India for most of these products and also exports these products to over 45 countries worldwide.
KEY POINTS
Product Basket FY22
- Water Control Gates: 50% of revenues
- Screening Equipment: 25% of revenues
- Valves: 14% of revenues
- Hydropower & Pumping, Process Equipment, and others: 11% of revenues
The company has a policy of adding new products every year to improve its product portfolio and maintain its leadership position.
Product Usage:
- Industrial usage 10-20%
- Human Drinking Water 10-15%
- Storm Water Cycle 5-10%
- Human Waste Water Cycle 60-70%
- Renewable Energy Generation 5-10%
Market Leader
Jash is a market leader in India for most of the products that it manufactures and is also among the first 5 in the world in the Water control gates business. Over 50% of company business comes from exports and the company aims to increase this to nearly 65% in the foreseeable future.
Geographical Split FY22
The consolidated revenue distribution based on geography is split exactly into half i.e 50% domestic revenues and 50% revenues from exports.
Order-book
As of 1st August 2022, the total order book stood at an all-time high of Rs. 586 Crore of which Rs. 435 Crore worth of orders are for supply outside India.
Customer Base
Co. has a diverse customer base spread across the globe with a presence in countries like the United States of America, the UK, France, Germany, Qatar, Saudi Arabia, Bahrain, UAE, Hongkong, Singapore, Thailand, and over 35 other countries. [7] Some of their international clients are Hyflux, GE Power, Veolia engineering, etc. [8] Reliance, Adani, L&T are some of their domestic clients.
The top 5 customers contribute to around 20-30% of the total revenue.
Manufacturing Units
The company has 5 manufacturing units in total. In total employing 850 people. The company has designed their plants to be suitable for “Zero Water Discharge” and also to be water sustainable by having 100% rainwater harvesting by recharging more water than their annual requirement.
The Total Turnover Potential from the existing facility is ₹ 500+ Cr.
Expansion Plans
A new stainless-steel products plant will be built up at Unit 2. The work on this new plant will start in October 2022 at an approximate cost of Rs. 9 Crore and a further Rs. ~4 Crores will be invested in various other units to enhance and upgrade their facilities. A new plant is also being set up at Shivpad, Chennai at a cost of Rs. 12.
Technology Tie-up
The co. has produced the first indigenously manufactured Disc Filter machines in India under a technology tie-up with INVENT of Germany. It is actively pursuing to improve the indigenous content of these machines to over 95% and expects to achieve this target by March 2023. [14] A New agreement with Invent was signed in April 2022 for Aeration and Mixing Products. Commercial production will commence within the financial year 2023-24.
Future
For FY23, the co. expects major improvements from WOS Rodney Hunt on account of its Orange manufacturing facility’s profitable performance and its banking and bonding facilities availed by the co. It is expected to be the year when Rodney Hunt is back in the race to claim its erstwhile No. 1 position in the US market.
It also plans to start working on 2 more new products within this FY to improve their product portfolio.
Analysis
✔Earnings
Earnings Per Share is above its 3-year average.
Revenue YoY
Revenues are growing slower than its 3-year average.
✔Operating Margin
Operating margin is high relative to its 3-year average
Price to Earnings
JASH is overvalued when compared to its 3-year average PE Ratio
✔Debt to EBITDA
Debt to EBITDA has been decreasing from its 3-year average.
✔Return on Assets
Return on assets is higher than its 3-year average.
TECHNICAL:-
✔BULLISH ON Chart
TREND SEMI SWING
CMP 1521
POTENTIAL UPSIDE 2281. (50%).
TIME FRAME TILL 31ST MARCH 2024.
NOTE :-✔ NSE TAGLINE Soch kar samajh kar invest kar
