Shares of Jash Engineering Ltd are in focus after brokerage firm Systematix reiterated its ‘Buy’ recommendation on the stock, citing a strong order pipeline, leadership in domestic markets and expanding overseas operations.
The small-cap company, which manufactures equipment used in water intake systems, wastewater treatment plants and pumping stations, has a market capitalization of ₹2,809 crore.
The stock was trading around ₹444 per share, nearly 31% below its 52-week high of ₹647. It trades at a P/E multiple of 36.9, compared with the industry average of 30.5.
Systematix sees upside from current levels
Systematix has maintained a target price of ₹565 per share, implying an upside potential of around 27% from the current market price.
The brokerage’s positive view is based on:
- A consolidated order book of more than ₹9 billion.
- Leadership in key domestic product categories.
- Expansion across the US, UK and Saudi Arabia.
- Opportunities in the water infrastructure segment.
- Margin improvement and capacity additions.
Systematix projections for FY26-FY28
- Revenue CAGR of 16.5%.
- EBITDA CAGR of 31%.
- PAT CAGR of 34%.
Domestic business continues to grow
Domestic revenue increased 18% year-on-year in FY26.
Management expects another 18-20% growth in FY27.
The company commands more than 70% market share in its core product categories.
Demand has remained strong across major cities. In Mumbai, Jash supplied products for more than 28 out of 30 projects in recent quarters.
Management believes water infrastructure spending could become a major growth driver after FY28 as road infrastructure investments moderate.
The company also sees opportunities in wastewater-to-potable-water projects and has already completed pilot projects in Singapore.
Capacity expansion is underway
Jash has commissioned two new plants.
Expansion of Unit 1 is expected to be completed by June 2026.
Once completed, revenue potential could increase to nearly ₹12 billion.
The order book in Singapore currently stands at around ₹1 billion.
US business is scaling up
Its US subsidiary, Rodney Hunt, generated revenue of around $30 million in FY26.
Management is targeting:
- Revenue of $37 million in FY27.
- Revenue of $75 million over the next five years.
Jash said manufacturing costs remain significantly lower in India.
Comparable production costs are:
- Around $10 million in India.
- About $22-23 million in the US.
Rodney Hunt employs around 82 people, while order visibility stands at nearly $40 million.
To support growth and address labour shortages, the company is setting up a new facility in Houston.
Key details:
- Capex of around $9 million.
- Commissioning targeted for December 2027.
UK operations are improving
Following the acquisition of Penstock, Jash has expanded its presence across the UK, including Scotland and the Midlands.
The UK business reported revenue of about £3 million in FY26.
Management expects revenue to increase to £5.5-6 million in FY27.
Its long-term target is £12-13 million over the next four to five years.
The business operated at break-even in FY26 and is expected to become profitable during FY27.
Order visibility remains healthy.
Management expects:
- Around £4.5 million of orders by H1 FY27.
- Approximately £6 million by the end of FY27.
Employee strength is expected to rise from 22 to around 30.
Saudi Arabia offers another growth opportunity
Jash is moving ahead with its Saudi Arabia plans.
Land allocation is expected shortly, while plant commissioning is targeted for December 2027.
The company plans to invest about $4 million.
Because of geopolitical uncertainties in West Asia, the project size has been reduced.
The facility will now be developed in phases.
- Earlier plan: 80,000-90,000 sq. ft.
- Revised plan: 35,000-40,000 sq. ft.
Jash has already secured Saudi Aramco approval, which management described as a key requirement for entering the market.
Local regulations require 60-70% local content execution within five years.
Order book provides revenue visibility
The company’s consolidated order book exceeds ₹9 billion.
About 70% of orders come from international markets.
Revenue mix in FY26
- India: 45%
- USA: 36%
- Far East and South-East Asia: 11%
- Europe and Africa: 7%
- Middle East: 2%
Water control gates remained the largest product category, contributing 62% of FY26 revenue.
Management maintains FY27 guidance
Management has retained its FY27 guidance.
It expects:
- Revenue of about ₹8.75 billion.
- EBITDA margin of 12-13%.
Over the medium term, the company aims to increase revenue potential to nearly ₹15 billion through domestic growth and overseas expansion.
Systematix expects return ratios to improve by FY28.
The brokerage projects:
- RoE of 18.9%.
- RoCE of 18.3%.
Outlook
Jash Engineering is strengthening its domestic franchise while expanding across overseas markets.
New facilities in the US and Saudi Arabia, improving operations in the UK and a healthy order pipeline are expected to support growth. Management also sees long-term opportunities from rising investments in water infrastructure.
TL;DR
Systematix has maintained a Buy rating on Jash Engineering with a target price of ₹565. The brokerage expects strong earnings growth, supported by a ₹9 billion order book, domestic market leadership and expansion across the US, UK and Saudi Arabia.
AI Summary
- Systematix has retained a Buy rating on Jash Engineering.
- The brokerage has set a target price of ₹565.
- Consolidated order book stands at more than ₹9 billion.
- Overseas operations are expanding across the US, UK and Saudi Arabia.
- Management has maintained FY27 revenue guidance of ₹8.75 billion.
