Buy JNK India; target of Rs 815: LKP Research

LKP Research's research report on JNK India

JNK India Ltd (JNK) is a leading player in India’s heating equipment sector, holding a market share of ~ 27% and serving diverse industries, including oil & gas refineries, petrochemicals, and fertilizers. With capabilities in thermal design, engineering, manufacturing and commissioning of process-fired heaters, reformers and cracking furnaces, JNK enjoys a competitive advantage due to high entry barriers and strong support from JNK Global. The company is well-positioned to capitalize on India’s growing energy demand, which is set to increase 3.5x by 2047E, with a substantial contribution from oil and natural gas. The country’s refining capacity is expected to nearly double by 2030E, offering significant growth opportunities. Additionally, renewable energy initiatives like the ₹197 bn Green Hydrogen Mission and 500 GW non-fossil targets by 2030E further drive low-carbon goals, creating new avenues for JNK. With a strong order book of ₹13.1 bn as of H1FY25, up nearly 9x since FY21, and a robust revenue growth of ~4x over the same period. We expect the company to deliver sales/PAT CAGR of 25%/23% over FY24-27E.

Outlook

JNK’s expanding client base and higher Total Addressable Market (TAM) in both India and international markets ensure continued revenue visibility and growth potential. Hence we initiate coverage on JNK with a BUY rating and TP of ₹815.