This small cap company is a leading manufacturer of Water Control Stations, Water, and Waste Water Pumping station equipment for various projects as the world is planning to increase solutions for fresh water. With strong fundamentals, including a 30 percent profit CAGR, and it presents an opportunity to look into the company.
The global water and wastewater treatment market is projected to grow significantly, reaching approximately $1,024.8 billion by 2033, with a CAGR of 5.9 percent from 2024 to 2033. The key drivers include urbanization, regulations, and the requirement for clean water due to declining freshwater resources. In India, rapid industrialization and population growth are fueling the demand for advanced treatment solutions, with substantial investments in wastewater infrastructure expected.
Price Movement
Jash Engineering Limited‘s stock in Friday’s session closed at Rs. 614.70 per share down by 1.00 percent from the previous closing price of Rs. 620.90. The stock has delivered a return of around 84 percent in the past year and has outperformed the Nifty Index in the same period.
Business Segments
As per the recent September 2024 results, the company considers their operating from Manufacturing and trading of varied engineering products for the general engineering industry, wastewater industry, and bulk solids handling industry. They earn around 41.61 percent from India and the remaining 58.38 percent from outside India.
Future Outlook:
The company aims to double its revenue from FY24’s Rs.522 crore to Rs.1,000 crore by FY28. Two new manufacturing facilities are planned for commissioning in FY26 – one in Chennai and another at SEZ Pithampur, which will increase the company’s manufacturing capability from Rs.800 crore to Rs.1000 crore. Jash is also refocusing its efforts on the Middle East market while expanding into new territories, particularly in Southeast Asia, with Vietnam showing results and Cambodia being targeted for future growth. The major potential market is looked at Indonesia.
In terms of product expansion, Jash has entered into a JV with Invent of Germany to offer a complete range of secondary treatment equipment in India which includes aerators, diffusers, mixing and aeration equipment, decanting equipment, and turbo blowers. This venture is expected to contribute Rs.25 to 50 crore to revenue once fully established. The company is also positioning itself to capitalize on opportunities in Singapore’s rising sea level protection projects, expected to commence from 2026-27 and continue for the next 20 years.
Additionally, Jash plans to expand its US operations, with plans for a new plant in 2026-27 to address requirements post-2029, particularly in compliance with the Build America, Buy America (BABA) Act which mandates 95 percent local production by 2029 for federally funded projects.
Financial Performance
Their Q2FY25 results show revenue from operations of Rs. 139.58 crore which increased by 46.70 percent year on year, from Rs. 95.14 crore in Q2FY24 and a 21.85 percent increase from Rs. 114.54 crore in Q1FY25. Their net profit increased by 88.98 percent year on year, from Rs. 8.54 crores in Q2FY24 to Rs. 16.14 crores in Q2FY25. Quarterly, the profits were up by 20,623.74 percent from Rs. 0.77 crore.
The debt-to-equity ratio was 0.27 times slightly declining from 0.39 times in FY23. The RoE in FY24 stood at 22.64 percent declining from 24.31 percent a year ago. However, the RoCE stood at 24.82 percent which has improved from 22.16 percent in FY23.
Shareholding Pattern
As of September 2024, the shareholding pattern includes promoters holding a share of 43.61 percent stake in The Jash Engineering, Foreign Institutional Investors (FII) holding around 1.58 percent, and public holdings standing at 54.81 percent.
About the company
Jash Engineering Limited was established in 1973. They are headquartered in Indore. The company specializes in manufacturing fluid control equipment for water and wastewater management. They offer a diverse range of products which includes Archimedes screw pumps, clarifiers, micro-hydro turbines, and water control gates. Their business model focuses on innovation and sustainability while catering to various sectors such as power generation, petrochemicals, and municipal water supply. The company has a market share of around 65 to 70 percent market share in Water Control Gates and holds 5th position in the U.S.
Written by Santhosh S
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