Jinkushal Industries Ltd Management Discussions

Management Discussion and Analysis Report

A. INDUSTRIAL STRUCTURE AND DEVELOPMENTS:

Jinkushal Industries Limited is engaged in Business of Exports of refurbished and customized construction and mining equipments, leasing and renting of construction equipments and Logistics and warehousing. The Company also markets construction equipment under its own brand, HexL, through strategic contract manufacturing partners.

With a presence in more than 35 countries, the Company has established itself as Indias largest non-OEM exporter, in the non-OEM construction equipment segment.

The global construction equipment industry continued to demonstrate resilience during FY 2025-26, supported by sustained investments in infrastructure, mining, transportation, energy and industrial development across both developed and emerging economies. Governments worldwide continued to prioritize capital expenditure on roads, ports, railways, urban infrastructure and renewable energy projects, thereby driving demand for construction and mining equipment.

A significant industry trend has been the growing preference for refurbished and customized equipment, driven by customers seeking cost-effective, sustainable and readily available alternatives to new machinery. This has created substantial opportunities for companies possessing technical expertise in refurbishment, customization and international distribution.

The Indian construction equipment industry remains one of the fastest-growing segments of the capital goods sector. Continued emphasis on infrastructure development through initiatives such as the National Infrastructure Pipeline (NIP), PM Gati Shakti, Bharatmala, Sagarmala, Smart Cities Mission and enhanced public capital expenditure is expected to support long-term growth in the domestic construction and mining equipment market.

India has also emerged as a competitive export hub for construction equipment owing to its cost advantages, technical capabilities and availability of high-quality refurbished machinery. Increasing demand from developing regions, coupled with the growing acceptance of Indian exporters, continues to strengthen export opportunities. During the year, replacement demand in emerging economies further supported growth in international markets.

The Company has developed strong competencies across the entire value chain, including global sourcing, refurbishment, customization, quality inspection, logistics and international marketing. Its in-house refurbishment facility, equipped with modern machinery and technical infrastructure, enables the delivery of customer-specific equipment conforming to international quality standards.

The Company has further strengthened its business model through the expansion of its proprietary HexL brand, under which construction equipment is contract manufactured through selected manufacturing partners under defined specifications and quality controls strategic partnerships.

This asset-light approach allows the Company to broaden its product portfolio, improve operational efficiency and optimize capital utilization while enhancing brand visibility in international markets.

During FY 2025-26, the operating environment was influenced by heightened geopolitical uncertainties, resulting in elevated freight costs, supply chain disruptions and commodity price inflation. Despite these headwinds, demand for construction and mining equipment remained robust, supported by continued infrastructure investments, increased mining activities and industrial capital expenditure across key markets.

The Company successfully maintained its execution momentum throughout the year, supported by its diversified sourcing network, efficient refurbishment capabilities and strong customer relationships. Export demand remained particularly strong across Latin America, Africa and the Middle East, while the HexL brand continued to gain market acceptance through focused expansion initiatives.

Looking ahead, although challenges such as foreign exchange volatility, freight cost fluctuations, global economic uncertainties and competitive pressures may continue, the long-term outlook for the construction equipment industry remains positive. The Companys diversified business model, expanding global footprint, technical expertise in refurbishment, growing proprietary brand portfolio and established international customer base position it favourably to capitalize on emerging opportunities and deliver sustainable long-term growth.

Financial Performance

During the financial year 2025-26, on standalone basis the Company recorded a significant growth in its operational performance, with revenue from operations increasing to INR 31,337.61 Lakhs as compared to INR 21,185.92 Lakhs in the previous financial year, representing a growth of approximately 47.91%. The increase in revenue was primarily driven by higher sales, expansion of the customer base, and increased demand for the Companys products and services. The Company also focused on improving operational efficiencies, prudent cost management and strengthening its market presence, which contributed positively to its overall financial performance.

During the financial year 2025-26, on a consolidated basis, the Company reported revenue from operations of INR 35,756.15 Lakhs as compared to INR 38,055.81 Lakhs in the previous financial year, reflecting a decline of approximately 6.04%. The decrease in consolidated revenue was primarily attributable to changes in business operations at the group level and certain market-related factors affecting the consolidated entities. Despite the decline in consolidated turnover, the Company continued to focus on operational efficiency, cost optimization, and strengthening its overall business fundamentals to ensure sustainable long-term growth and value creation for all stakeholders.

B. OPPORTUNITIES AND THREATS:

Major Opportunities for the Company are as follows:

• Growing investments in infrastructure, roads, railways, mining and urban development are expected to increase demand for construction equipment.

• Geographic diversification reducing dependence on single export market.

• Expansion of export markets provides significant opportunities to strengthen the Companys global presence.

• Increasing preference for refurbished and cost-effective construction equipment creates new business opportunities.

• Growing demand for equipment leasing and customized solutions supports long-term business growth.

• Expansion of the Companys own brand "HexL" is expected to enhance product offerings and market reach.

• Strong customer relationships, technical expertise and an established international network provide a competitive advantage.

• Adoption of digital technologies and operational improvements can further enhance efficiency and profitability.

• Overseas inventory positioning closer to customers

• Growing international dealer network.

• Increased global acceptance of refurbished construction equipment.

• Increasing mining and infrastructure investments worldwide.

Major Threats/ Challenges to the Company are as follows:

• Fluctuations in global economic conditions may impact demand for construction equipment.

• Foreign exchange rate volatility may affect export revenues and profitability. Changes in Government policies, import-export regulations and taxation laws may impact business operations. Manpower retention

• Volatility in freight, logistics and procurement costs may adversely affect operating margins.

• Supply chain disruptions and delays in equipment availability may impact timely execution of orders.

• Intense competition from domestic and international players may exert pressure on pricing and margins.

• Geopolitical uncertainties and global trade disruptions may affect international business operations.

• Rapid technological advancements may require continuous investment in upgrading products and services.

C. SEGMENT–WISE OR PRODUCT-WISE PERFORMANCE:

The Company operates primarily in a single business segment, namely export, refurbishment, customization, leasing and logistics of new and pre-owned construction equipment. Accordingly, there are no separate reportable segments as per the applicable accounting standards.

During the financial year 2025-26, the Company witnessed healthy growth in its core business, supported by increased demand from domestic and international customers. The Company also continued to strengthen its product portfolio through its own brand "HexL", while focusing on enhancing operational efficiency, expanding its customer base and delivering quality solutions to meet evolving market requirements.

	STANDALONE		CONSOLIDATED
Particulars	31/03/2026	31/03/2025	31/03/2026	31/03/2025
Revenue from operations and Other Incomes	31,402.80	21,598.33	35,959.37	38,580.66
Profit/Loss before Interest, Depreciation and Tax	2,238.39	2,543.46	2,282.27	2,860.05
Less: Finance Cost	495.52	371.56	506.23	381.49
Net Profit/Loss before Depreciation and Tax	1742.87	2,171.90	1,776.04	2,478.56
Less: Depreciation and amortization for the year	82.40	84.23	83.60	84.86
Net Profit/Loss before exceptional and extraordinary items and tax	1,660.47	2,087.67	1,692.44	2,393.70
Less: Exceptional Items	0.00	0.00	0.00	0.00
Profit before extraordinary items and tax	1,660.47	2,087.67	1,692.44	2,393.70
Less: Extraordinary Items	0.00	0.00	0.00	0.00
Profit before tax	1,660.47	2,087.67	1,692.44	2,393.70
Less: Tax Expenses
Current tax expense	427.17	457.79	427.17	457.79
Deferred tax expense	-19.89	21.91	-19.89	21.91
Earlier Year Taxes	9.59	0.00	9.59	0.00
Profit/Loss for the period from continuing operations	1,243.60	1,607.97	1,275.57	1,914.00
Other Comprehensive Income
(a) Items that will not be reclassified to profit or loss
(i) Gain/(Loss) on Remeasurement of Defined Benefit Plans loss	(5.48)	12.34	(5.48)	12.34
(ii) Income tax relating to above items	1.38	(3.11)	1.38	(3.11)
(b) Items that will be reclassified to profit or loss
Gain/(Loss) on conversion of foreign operations of subsidiary	0.00	0.00	264.07	107.02
Tax expense of discontinuing operations	0.00	0.00	0.00	0.00
Profit/Loss from discontinuing operations (after tax)	0.00	0.00	0.00	0.00
Profit/Loss transferred/adjusted to General Reserve	1239.50	1617.20	1,535.55	2,030.25
Basic earnings per equity share	3.65	5.41	3.15	6.15
Diluted earnings per equity share	3.65	5.41	3.15	6.15

Key Observations:

1. Revenue Growth:

During the financial year 2025-26, the Companys Standalone Revenue from Operations increased significantly to INR 31,402.80 Lakhs from INR 21,598.33 Lakhs in the previous financial year, registering a growth of approximately 45.40%. The increase was primarily driven by higher business volumes, expansion of the customer base, and improved demand for the Companys products and services.

On a Consolidated basis, the Revenue from Operations stood at INR 35,959.37 Lakhs for FY 2025-26 as against INR 38,580.66 Lakhs in FY 2024-25, reflecting a decline of approximately 6.79%. The decrease in consolidated revenue was mainly attributable to changes in the business operations and revenue contribution of the Companys subsidiary during the year.

Discussion on financial performance with respect to operational performance:

1. Revenue Analysis:

A. Standalone Financial Performance

Revenue from Operations and Other Income:

31st March, 2026: 31402.80 Lakhs

31st March, 2025: 21598.33 Lakhs

Analysis: The Companys standalone revenue increased by INR 9,804.47 Lakhs, representing a growth of approximately 45.40% over the previous financial year. The increase was primarily driven by higher business volumes, expansion of the customer base, increased export activities, and sustained demand for the Companys products and services. The growth reflects the Companys strong operational performance and effective execution of its business strategy.

B. Consolidated Financial Performance

Revenue from Operations and Other Income:

31st March, 2026: 35,959.37 Lakhs

31st March, 2025: 38580.66 Lakhs

Analysis: On a consolidated basis, the Companys revenue decreased by INR 2,621.29 Lakhs, representing a decline of approximately 6.79% compared to the previous financial year. The decrease was primarily attributable to the lower revenue contribution from the subsidiary and changes in the consolidated business operations during the year. Despite the decline in consolidated revenue, the Company remains focused on improving operational efficiencies, strengthening its core business, and driving sustainable long-term growth.

2. Operational Profitability:

A. Standalone Financial Performance

Profit Before Interest, Depreciation and Tax (PBIDT):

31st March, 2026: 2,238.39 Lakhs

31st March, 2025: 2,543.46 Lakhs

Analysis: The Companys standalone PBIDT decreased by INR 305.07 Lakhs, representing a decline of approximately 11.99% compared to the previous financial year. The decline was primarily attributable to increased operating costs and changes in the business cost structure during the year. Nevertheless, the Company continued to maintain healthy operating profitability through effective cost management and operational efficiencies.

B. Consolidated Financial Performance

Profit Before Interest, Depreciation and Tax (PBIDT):

31st March, 2026: INR 2,282.27 Lakhs

31st March, 2025: INR 2,860.05 Lakhs

Analysis: the Companys PBIDT decreased by INR 577.78 Lakhs, representing a decline of approximately 20.20% over the previous financial year. The reduction was primarily due to lower consolidated operating income and higher operating expenses during the year. The Company continues to focus on improving operational efficiencies, optimizing costs and strengthening its core business to enhance profitability in the coming years.

D. OUTLOOK:

The outlook for Jinkushal Industries Limited remains positive, supported by increasing investments in infrastructure development, urbanization, mining and industrial projects across domestic and international markets. The Company expects to benefit from the growing demand for new and pre-owned construction equipment, refurbishment services and equipment leasing solutions.

• Going forward, the Company intends to focus on:

• Expanding its presence in existing and new international markets.

• Strengthening its own brand "HexL" by broadening its geographical presence, addition in dealerships and product portfolio.

• Enhancing operational efficiency through process optimization and technology adoption.

• Expand dealer network.

• Invest in technology and execution capabilities.

• Enhanced Working Capital deployment towards long-term growth initiatives.

• Continue strengthening international leadership.

• Strengthening customer relationships by delivering quality, customized and cost-effective solutions.

• Expanding its refurbishment and after-sales service capabilities.

• Focus on sustainable profitable growth rather than short-term earnings optimization.

• Creating sustainable value for stakeholders through profitable and long-term growth.

• While global economic uncertainties, geopolitical developments and regulatory changes may continue to pose challenges, the Companys diversified business model, experienced management team and customer-centric approach position it well to capitalize on emerging opportunities and achieve sustainable growth in the coming years.

E. RISK AND CONCERNS:

The Company operates in a dynamic business environment and is exposed to various business and operational risks. The management continuously identifies, evaluates and implements appropriate mitigation measures to minimize the impact of these risks:

The key risks and concerns include:

Economic Risks: Slowdown in domestic or global economic conditions may impact demand for construction equipment and related services.

Market Competition: Intense competition from domestic and international players may exert pressure on pricing and profit margins.

Foreign Exchange Risk: Fluctuations in foreign exchange rates may impact export revenues and import costs.

Supply Chain delays: Disruptions in the procurement of equipment, spare parts and logistics services may affect business operations.

Regulatory Risk: Changes in government policies, taxation, import-export regulations and other statutory requirements may impact the Companys business.

Operational Risk: Delays in refurbishment, logistics or execution of customer orders may affect operational efficiency and customer satisfaction.

Technology Risk: Rapid technological advancements in construction equipment may require continuous investment in product enhancement and technical capabilities.

Geopolitical disruptions: Global geopolitical developments, trade restrictions and international market uncertainties may affect export business and supply chains.

Credit Risk: Delays or defaults in customer payments may impact the Companys cash flows and working capital requirements.

International regulatory changes: Changes in international trade policies, import-export regulations, customs duties, or compliance requirements across different countries may impact the Companys export operations and business performance.

Capital market volatility affecting investment valuation: Fluctuations in capital markets may result in temporary changes in the fair value of investments, impacting the Companys reported profitability.

Longer export working-capital cycle: The Companys export business involves longer working capital cycles due to shipment timelines, overseas inventory positioning, refurbishment activities, and extended customer credit periods. The Company manages this risk through efficient working capital planning and disciplined inventory management.

The Company has a well-defined risk management framework to identify, assess and monitor these risks. The management regularly reviews risk mitigation strategies and takes appropriate measures to ensure business continuity, operational resilience and sustainable long-term growth.

F. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

The Company has established adequate internal control systems commensurate with the size, nature and complexity of its business operations. These controls are designed to ensure the orderly and efficient conduct of business, safeguarding of assets, prevention and detection of fraud and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial information.

The Company has implemented appropriate policies, procedures and standard operating practices to ensure compliance with applicable laws, regulations and internal guidelines. The internal control framework is periodically reviewed and strengthened to address changing business requirements and emerging risks.

The Internal Auditor conducts periodic audits of various operational and financial functions, and the audit findings along with recommendations are placed before the Audit Committee for review. The Audit Committee regularly evaluates the adequacy and effectiveness of the internal control systems and monitors the implementation of corrective actions, wherever required.

The management believes that the existing internal control systems are adequate and effective and provide reasonable assurance regarding the reliability of financial reporting, operational efficiency and compliance with applicable statutory requirements.

G. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE.

During the financial year 2025-26, Jinkushal Industries Limited continued to strengthen its operational performance through improved business execution, enhanced customer reach and efficient resource utilization. On a standalone basis, the Companys Revenue from Operations and Other Income increased to Rs.31,402.80 Lakhs from Rs. 21,598.33 Lakhs in the previous financial year, registering a growth of 45.40%, primarily driven by higher business volumes and increased demand for the Companys products and services.

On a consolidated basis, the Companys Revenue from Operations and Other Income stood at Rs.35,959.37 Lakhs as against Rs.38,580.66 Lakhs in the previous financial year. The decline in consolidated revenue was mainly attributable to changes in the revenue contribution of the subsidiary during the year.

The Companys operational profitability remained stable, supported by effective cost management, efficient procurement, streamlined refurbishment processes and prudent financial discipline. The management continues to focus on improving operational efficiencies, strengthening its global presence, optimizing costs and expanding its product portfolio under the "HexL" brand to achieve sustainable growth and enhance long-term shareholder value.

H. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED:

The Company recognizes that its employees are its most valuable asset and a key driver of its continued growth and success. Jinkushal Industries Limited remains committed to fostering a safe, inclusive and performance-oriented work environment that promotes employee engagement, skill development and professional growth.

During the financial year 2025-26, the Company continued to focus on strengthening its human resources through talent development, performance management, employee welfare and continuous learning initiatives. The Company also emphasizes workplace safety, ethical business practices and compliance with all applicable labour laws and regulations.

Jinkushal Industries Limited remains committed to providing a safe, healthy and secure workplace for all its employees, contractors and other stakeholders. The Company continues to emphasize occupational health and safety through regular safety awareness programmes, implementation of appropriate safety protocols and periodic inspections of its operational facilities. Continuous efforts are made to identify and mitigate workplace risks, ensure compliance with applicable health and safety regulations, and promote a culture of safety across the organization. During the financial year 2025-26, industrial relations remained cordial and there were no major workplace incidents that materially affected the Companys operations.

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefore:

A. DETAILS OF STANDALONE ACCOUNTING RATIOS:

Ratio	FY 2025-26	FY 2024-25	Change %	Reason for change
Current Ratio	2.08	1.59	31.10	The increase in the Current Ratio as on March 31, 2026 was primarily due to increase in trade receivables, cash & cash equivalents. Although current borrowing and trade payable also increased during the year, the increase in current assets was proportionately higher, resulting in improvement in the Companys liquidity position.
Debt-Equity Ratio	0.61	0.92	(34.05)	The Debt Equity Ratio as on March 31, 2026 decreased primarily due to significant increase in shareholders equity consequent to the Initial Public Offer (IPO) made during the year.
				The increase in equity share capital and securities premium was proportionately higher than the increase in borrowings, resulting in strengthening of the Companys capital base and reduction in the Debt Equity Ratio.
Debt Service Coverage Ratio (DSCR)	0.24	0.44	(46.36)	The Debt Service Coverage Ratio as on March 31, 2026 declined primarily due to a proportionate decrease in operating income of the company and increase in Current borrowing resulting in increase in interest cost.
Return On Equity Ratio	11.07%	31.38%	(64.74)	The ROE as on march 31, 2026 decreased primarily due to lower Profit After Tax (PAT) and also increase in share capital and reserve and surplus due to issue of initial public offer (IPO) during the year
Inventory Turnover Ratio	26.54	20.84	27.36	The Inventory Turnover Ratio as on March 31, 2026 increased mainly due to increase in sales as compared to average inventory compared to last year. This indicates improved efficiency in utilization of inventory.

 

Ratio	FY 2025-26	FY 2024-25	Change %	Reason for change
Trade Receivables Turnover Ratio	2.05	2.85	(28.20)	The Trade Receivables Turnover Ratio as on March 31, 2026 decreased primarily due to increase in average trade receivables during the year.
Net Capital Turnover Ratio	1.27	1.87	(32.00)	The Net Capital Turnover Ratio as on March 31, 2026 decreased mainly due to increase in working capital arising from higher trade receivables and other current assets, which was proportionately higher than the increase in turnover.
Net Profit Ratio	3.97%	7.59%	(47.71)	The Net Profit Ratio as on March 31, 2026 decreased primarily due to increase in one time listing and IPO related expense other than debited to securities premium, lower other income due to foreign exchange fluctuation gain/loss and increase in employee benefit expense as compared to turnover.
Return On Capital Employed	11.35%	24.26%	(53.23)	The Return on Capital Employed (ROCE) as on March 31, 2026 decreased mainly due to increase in capital employed during the year.
Return On Investment	(0.64)%	17.37%	(103.67)	The Return on Investment as on March 31, 2026 decreased primarily due to significant loss arising from fair valuation of investments during the year as compared to fair valuation gain in the previous year.
				Further, the reduction in the investment portfolio during the year also contributed to lower returns generated from investments.

B. DETAILS OF CONSOLIDATION ACCOUNTING RATIOS:

Ratio	FY 2025-26	FY 2024-25	Change %	Reason for change
Debt Service Coverage Ratio (DSCR)	0.24	0.49	(51.45)	The Debt Service Coverage Ratio as on March 31, 2026 declined primarily due to a significant increase in current borrowings (which nearly doubled year-on-year), resulting in substantially higher debt service obligations, coupled with a decrease in operating income of the company.
Return On Equity Ratio	8.64%	28.38%	(69.57)	The Return on Equity Ratio as on March 31, 2026 decreased primarily due to lower Profit After Tax and a significant increase in shareholders equity consequent to the IPO during the year, resulting in a higher equity base.
Inventory Turnover Ratio	9.57	26.87	(64.38)	The Inventory Turnover Ratio as on March 31, 2026 decreased mainly due to high level of inventory at its overseas subsidiary and is a conscious and strategic decision enabled by improved liquidity following the IPO.
Trade Receivables Turnover Ratio	2.24	4.69	(52.30)	The Trade Receivables Turnover Ratio as on March 31, 2026 decreased primarily due to increase in average trade receivables during the year, which was higher in proportion to the growth in revenue.
Trade payables Turnover Ratio	12.62	19.62	(35.71)	The Trade Payables Turnover Ratio as on March 31, 2026 is decreased due to increase in net credit purchases.
Net Capital Turnover Ratio	2.65	6.54	(59.45)	The Net Capital Turnover Ratio as on March 31, 2026 decreased mainly due to a significant increase in working capital arising from higher trade receivables and inventory levels, while revenue declined during the year.
Net Profit Ratio	3.57%	5.03%	(29.07)	The Net Profit Ratio as on March 31, 2026 decreased primarily due to increase in one time listing and IPO related expense other than debited to securities premium, lower other income due to foreign exchange fluctuation gain/loss and increase in employee benefit expense as compared to turnover.
Return On Capital Employed	9.75%	23.47%	(58.44)	The Return on Capital Employed (ROCE) as on March 31, 2026 decreased mainly due to lower Earnings Before Interest and Tax (EBIT) and increase in capital employed during the year.
Return On Investment	3.42%	18.54%	(81.56)	The Return on Investment as on March 31, 2026 decreased primarily due to significant loss arising from fair valuation of investments during the year as compared to fair valuation gain in the previous year.
				Further, the reduction in the investment portfolio during the year also contributed to lower returns generated from investments.

Disclosure of Accounting Treatment:

The financial statements have been prepared on accrual basis under the historical cost convention, in accordance with the accounting principles generally accepted in India and comply with the Accounting Standards specified under section 133 of The Companies Act, 2013 and the relevant provisions of the Companies Act, 2013 and with the relevant provisions of the Companies Act, 2013, to the extent applicable.

The preparation of the financial statements in conformity with Ind AS requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenue, expenses and disclosure of contingent liabilities on the date of financial statements. The recognition, measurement, classification or disclosures of an item or information in the financial statements are made relying on these estimates. Any revision to accounting estimates is recognized prospectively.

	FOR & ON BEHALF OF THE JINKUSHAL INDUSTRIES LIMITED
Date: 29.06.2026
Place: Raipur	Sd/-	Sd/-
Name	Anil Kumar Jain	Abhinav Jain
Designation	Director	Managing director
DIN	00679518	07811559