Jinkushal Industries: Navigating Global Markets with an Asset-Light Strategy

Jinkushal Industries Limited, a prominent player in the construction and mining equipment sector, recently concluded its Q2 FY26 earnings call, revealing a strategic focus on profitability and global expansion. The company, which operates on an asset-light, multi-vertical business model, reported a turnover of ₹121.6 crore for the six-month period ended September 30, 2025. While the top-line growth remained steady compared to ₹119.6 crore in H1 FY25, the company demonstrated significant improvements in its bottom line. EBITDA for H1 FY26 surged to ₹16.2 crore from ₹10.3 crore in H1 FY25, with margins strengthening from 4.8% to 9%. Profit After Tax (PAT) saw an impressive 89% growth, reaching ₹11 crore, up from ₹5.7 crore in the same period last year. This performance underscores management's deliberate shift towards efficiency and margin expansion.

The company's business model is diversified, encompassing exports of new and customized construction machines, used and refurbished machines, and sales of its proprietary HexL brand. Additionally, it maintains complementary businesses in machinery rentals and logistics-warehousing. This integrated approach allows Jinkushal Industries to cater to a broad spectrum of customers, from large-scale infrastructure contractors to equipment rental companies and wholesale distributors across more than 30 countries. The concall highlighted that the improved profitability in H1 FY26 was primarily driven by a shift in product mix, with increased sales of used and refurbished machines, which offer higher PAT margins of 12-14% compared to 2-4% for new equipment of other brands. The HexL brand, though nascent, is also contributing positively to this margin expansion.

Strategic Initiatives and Market Outlook

Jinkushal Industries is actively pursuing several strategic initiatives to sustain its growth trajectory. These include further integration and diversification of its supply chain, aiming to onboard more vendors and enhance focus on its own brand. The company plans to expand its sales volume by leveraging its global distribution network and deepening its presence in new markets. Efficiency enhancement and cost optimization are also key, with investments in technology and process automation to streamline operations and improve inventory management. A significant initiative is product portfolio expansion, moving beyond current lines to introduce new categories like electric construction machines, aligning with global trends towards sustainability.

From a market perspective, the global used construction equipment market is projected to grow at a 6% CAGR, reaching USD 177.2 billion by 2029. This growth is fueled by massive infrastructure buildout in emerging markets and contractors seeking cost savings. Jinkushal Industries, as India's largest non-OEM exporter, is well-positioned to capitalize on this trend. The company's HexL brand, launched in 2024, is a key part of its future strategy, especially in the backhoe loader segment, which is experiencing steady growth. Management expects HexL to contribute significantly to both top-line and bottom-line in the coming years.

Financial Health and Future Outlook

On the balance sheet front, the company has shown improved financial health. The debt-to-equity ratio significantly improved to 0.36x as of March 2025, down from 0.63x, reflecting a stronger liquidity position. The current ratio stood at 2.56x, indicating robust short-term solvency. The company's asset-light model, which emphasizes partnerships over heavy capital assets, contributes to high capital turnover and profitability. This approach enables scalability without large fixed costs, a crucial advantage in a capital-intensive industry.

Management has provided optimistic guidance, aiming to cross ₹800 crore in revenue within the next two to three years, with a sharp focus on PAT growth. They target PAT margins of 7-9% with zero CapEx involvement and aspire to achieve a 35-40% CAGR on PAT. The company's diversified geographic presence, spanning over 30 countries, helps mitigate regional risks and taps into global infrastructure demand. With the successful IPO providing enhanced liquidity, Jinkushal Industries is confident in its ability to achieve its ambitious growth targets and continue its journey as a globally trusted partner in the construction equipment industry.

Conclusion: Strategic Clarity for Sustained Growth

Jinkushal Industries Limited is demonstrating strategic clarity and disciplined execution, focusing on profitable growth through a diversified, asset-light model. The company's emphasis on higher-margin products, brand expansion with HexL, and efficient capital management positions it well to capitalize on the robust global demand for construction equipment. With strong financial performance and a clear roadmap, Jinkushal Industries is poised for sustained growth and value creation for its stakeholders.