| JNK India Limited | ||||||
| Ratings reaffirmed at 'Crisil A- / Negative / Crisil A2+ ' | ||||||
| Rating Action | ||||||
| ||||||
| ||||||
| Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. | ||||||
| 1 crore = 10 million | ||||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale Crisil Ratings has reaffirmed its ratings on the bank facilities and corporate credit rating of JNK India Ltd (JIL) at 'Crisil A-/Negative/Crisil A2+.’
The ratings continue to reflect JIL's established market position, well established customer base, and strong financial risk profile. These strengths are partially offset by the tender-based and working capital intensive operations. |
Analytical Approach Crisil Ratings has combined the business and financial risk profiles of JIL along with its wholly owned subsidiaries, JNK India Pvt FZE and JNK Renewable Energy Pvt Ltd, and 51% owned subsidiary JNK Chemdist Technologies Private Limited together referred to as the JNK group, which is strategically important to, and have a significant degree of operational integration with JIL.
Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation. |
Key Rating Drivers - Strengths Established market position and strong orderbook providing revenue visibility: The company was incorporated in 2010 and is promoted by Mr Arvind Kamath, and Mr Goutam Rampelli. The promoters have more than two decades of experience in the fired heater industry, which has given them a strong understanding of the market dynamics. The promoters have developed a technologically strong engineering, procurement and construction (EPC) company. This has further helped the group establish long-standing relationships with all its suppliers. With support from JNK Heater Co (Korea), the group has been able to develop strong technical competency, which has led to a significant increase in the revenue—the topline has remained healthy at Rs 480-485 crore over the two fiscals through fiscal 2025. The group has achieved revenues of around Rs 480 crore in the first nine months of fiscal 2026 and the scale is further expected to improve over the medium term backed by an outstanding orderbook of around Rs 1672 crore as on December 31st, 2025, which provides revenue visibility over the medium term. The established market position and strong orderbook will continue to support the business.
Well established customer base from a diversified end-user industry: JIL has long-standing relationship with its customers and suppliers. It caters to a diversified end-user industry base, which includes oil and gas, petrochemicals and refining, chemicals and fertilisers. Its customers include some well-established players such as Indian Oil Corporation Ltd (IOCL), Numaligarh Refinery Ltd, Indian Oil Corporation Ltd, TATA Projects Ltd and Petrofac International (UAE) LLC. Further, the group has significant reach in the export market primarily Nigeria, Middle East and Europe, exposure to which has been growing steadily and was 15% in fiscal 2025. A diversified and reputed clientele allows the company to overcome the risk of slowdown in a particular industry/customer and maintain its scale.
Strong financial risk profile: The financial risk profile is supported by a strong networth of Rs 504 crore as on March 31, 2025, as compared to Rs 195 crore a year earlier, driven by steady accretion to reserve and equity infusion in fiscal 2025. The reduced reliance on external debt and creditors to support the working capital cycle, which along with increase in networth has led to improvement in the capital structure with total outside liabilities to adjusted networth of around 0.6 time as on March 31, 2025, as compared to 1.7 times a year earlier. It is expected to remain low over the medium term. Debt protection metrics are healthy marked by interest coverage of around 5.6 times for fiscal 2025 and are further expected to improve due to reduced leverage. |
Key Rating Drivers - Weaknesses Susceptibility to the tender-based nature of operations: As the entire EPC business is tender-based, the improvement in topline and sustenance of profitability will largely depend on the successful bidding and subsequent execution of tenders. The operating margin has historically remained volatile and has been at 10.5-21.2% for the four fiscals through 2025. Further, the operating margin has declined to around 3.4% in the first quarter of fiscal 2026 due to varied margins during the different stages of project execution. While the margins have improved to around 12.8% in the third quarter of fiscal 2026 with the commencement of new projects as well as previous projects reaching the final stage, sustenance of the same along with increase in scale of operations will remain a key monitorable over the medium term.
Working capital intensive operations: Gross current assets (GCAs), sizeable around 470 days as on March 31, 2025 (net of cash, GCAs are 411 days), are expected to remain high over the medium term. This is driven by large debtors of 263 days and moderate inventory of 126 days. The company raises bills on milestone basis and receives payment within 30-60 days thereafter. However, debtors are higher due to higher billing done during year end. Inventory is primarily work-in-progress and depends on the ongoing projects. Further, GCAs also include retention money and security deposits to be provided by the group, which is expected to continue given the nature of business. The working capital cycle is expected to remain intensive over the medium term |
Liquidity Strong Fund based bank limits have been utilized at an average of 26% over the past nine months through December 2025. Expected cash accrual of Rs 55-65 crore is sufficient against term debt obligation of Rs 1.5-2.0 crore over the medium term. In addition, it will act as a cushion to the liquidity of the group. Cash and bank balance was high at around Rs 209 crore as on September 30th, 2025, of which around Rs 52 crore is unencumbered. The current ratio was moderate at 2.8 times as on March 31, 2025. Low gearing and moderate networth support financial flexibility. |
Outlook Negative Crisil Ratings believes the business risk profile of JIL may remain under pressure over the medium term owing to lower-than-expected revenue and decline in operating margin. |
Rating sensitivity factors Upward factors:
Downward factors:
|
About the Company Incorporated in 2010 and promoted by Mr Arvind Kamath and Mr Goutam Rampelli, JIL is a technologically driven EPC company with key focus on fired heaters, furnaces, hot oil heaters, reformers and gas crackers. It also provides designing and on-site installation to after sale/ maintenance services. The company’s head office is in Thane-Maharashtra |
Key Financial Indicators
|
Any other information: Not applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
|
Annexure - List of Entities Consolidated
|
| Annexure - Rating History for last 3 Years | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| All amounts are in Rs.Cr. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||||||||||||||
|
Criteria Details
|