Jash Engineering Navigates Tariffs and Expands Global Footprint in H1 FY26

Jash Engineering Limited, a prominent player in the water equipment industry, has reported a resilient performance for the first half of fiscal year 2026 (H1 FY26), demonstrating a 12% growth in consolidated revenue to INR 293 crore. Despite this top-line expansion, the company faced significant profitability pressures, with gross margins, EBITDA, PBT, and PAT experiencing declines. This challenging environment was primarily attributed to global trade tariffs, particularly from the USA, which impacted high-margin export sales, coupled with the execution of certain negative-margin screw generator projects and increased employee costs without commensurate revenue growth. However, management remains confident in a strong second half, projecting consolidated yearly revenue to exceed INR 825 crore and targeting INR 1,000 crore by FY27.

The company's revenue composition for H1 FY26 highlights its core strengths. Water Control Gates continued to be the largest contributor, accounting for 60% of the total revenue, or INR 175.8 crore. Screening Equipment contributed 15% (INR 43.95 crore), while Valves made up 14% (INR 41.02 crore). The remaining 11% (INR 32.23 crore) came from Hydropower & Pumping, Process Equipment, and other segments. Geographically, India remained the largest market, contributing 45.9% of revenue, followed by the USA at 31.3%. Europe & Africa, Far and Southeast Asia, and the Middle East contributed 11.7%, 10.5%, and 0.7% respectively, underscoring Jash's diversified global presence.

Financial Performance Snapshot

Strategic Expansion and Diversification

Jash Engineering is actively pursuing a multi-pronged strategy of acquisitions and capacity expansions to mitigate risks and drive future growth. A significant move is the impending acquisition of a 90% stake in WesTech Process Equipment India Pvt. Ltd., expected to close by mid-December 2025. This acquisition is poised to boost Jash's process equipment business to over INR 100 crore, positioning it as a key player in municipal and industrial process equipment. The company believes WesTech's strong technology, combined with relaxed controls post-acquisition, will unlock substantial growth and export potential.

In the UK, Jash's subsidiary, Waterfront Fluid Controls Limited, is acquiring Penstocks (UK) Limited, with the deal anticipated to finalize by January 2026. This strategic move aims to expand Waterfront's footprint across the UK, providing access to specialized technologies and strengthening relationships with key water utility clients. The acquisition will establish a presence in the Midlands, enhancing service capabilities and reinforcing Waterfront's pan-UK identity, with a target of 10-12 million revenues in four years.

Simultaneously, Jash is undertaking substantial capital expansions at its Indore plants. Unit 1 (Foundry, Machine shop & Gate assembly) and Unit 4 (New Plant) expansions are expected to be commissioned by April 2026, while Unit 2 (Guesthouse) will be ready by March 2026. These expansions are crucial for building in-house production capacity to support the company's ambitious INR 1,000 crore revenue target by FY27. Furthermore, Jash is planning capital expansion at its Rodney Hunt facilities in the USA, with the Houston plant expected to be commissioned by March 2027, and a new plant in Saudi Arabia targeted for mid-2027 to cater to the Middle Eastern markets.

Product Innovation and Market Adaptation

Jash Engineering continues its focus on product innovation, developing 5-6 new products annually to maintain its competitive edge. Recent developments include high-pressure Knife Gate Valves for the Canadian oil sands market, HDPE Knife Gate Valves for acidic applications in the paper, pulp, and chemical industries, and KU-HT Motorized Swing Gate Valves for high-temperature furnace charging. These innovations address specific industry needs and open new market opportunities.

Despite the global slowdown and tariff uncertainties, Jash has secured prestigious projects, including the supply of 96 large-bore Knife Gate Valves for the Tuas Water Reclamation Plant in Singapore (worth approximately INR 77 crore) and large-sized Knife Gate Valves for IOCL Panipat and Narmada-Jhabua-Petalwad-Sardarpur MLIS Project in India. The company's order book remains healthy at INR 890 crore as of November 1, 2025, reflecting sustained demand.

Outlook and Management Confidence

Management acknowledges the challenges faced in H1 FY26, including past project missteps and the impact of tariffs. However, they express strong confidence in a significant turnaround in H2 FY26, driven by the historical trend of stronger second halves, existing order bookings, and manufacturing clearances. The company anticipates PAT for FY26 to be in the range of INR 75-85 crore and aims to maintain PAT margins between 12-14% and EBITDA margins between 22-25% in the next two to three years. Jash Engineering's strategic focus on diversified products, markets, and enhanced production capabilities positions it to achieve its long-term growth objectives and become a dominant player in the global water equipment industry.