Subscribe, JNK India Ltd: Geojit Financial Services

Geojit Financial Services, IPO report on JNK India Ltd

JNK India Ltd. (JIL) specializes in manufacturing heating equipment for various process industries such as oil & gas refineries, petrochemicals, and fertilizers. Incorporated in 2010, the company is one of the well-recognized heater companies in India, having a market share of approximately 27% in the segment, in terms of new order booking as of FY23. The company has successfully executed projects in India, Mexico, and Nigeria, with ongoing ventures across various Indian states and overseas locations. JIL's key clientele includes organizations such as Indian Oil Corporation, Tata Projects, and Rashtirya Chemicals & Fertilisers. As of December 31, 2023, the company has provided services to 21 customers in India and 8 customers abroad. The projected demand for heating equipment from Indian refineries, petrochemicals, and fertilizer sectors between FY24 and FY29 is estimated at ₹27,089cr, averaging approximately ₹4,500cr annually, signalling favourable prospects for the company. JNK India collaborates closely with its corporate promoter, JNK Global, a KOSDAQlisted entity with a 25.8% share.

Valuation and Outlook

At the upper price band of ₹415, JIL is available at a P/E of 37x (FY24 EPS annualized), which appears to be reasonably priced compared to peers. With India's thriving oil & gas and hydrogen industries, coupled with the company's strong financial track record, impressive clientele, and ambitious expansion plans, it's poised for substantial growth. We assign a “Subscribe” rating on a long term basis.

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