Jinkushal's net profit dips as expenses rise, show IPO papers
Chhattisgarh-based exporter of construction machinery, Jinkushal Industries Limited (JKIPL), has filed its draft red herring prospectus (DRHP) with capital markets regulator Securities and Exchange Board of India (SEBI) to raise funds through an initial public offering (IPO).
While the company aims to bolster its working capital through the fresh issue of shares, financial details disclosed in the DRHP suggest some underlying challenges.
According to the DRHP, Jinkushal's revenue rose to Rs 31,093.32 lakh for the nine months ended December 31, 2024, compared to Rs 24,279.84 lakh for the full financial year ending March 31, 2024.
However, the rise in revenue has not translated into improved profitability. In fact, net profit declined nearly 2.8 per cent to Rs 1,812.34 lakh for the nine-month period, from Rs 1,864.45 lakh for the previous full fiscal year.
More notably, the company's total expenses surged significantly – around 32.5 per cent -- to Rs 28,901 lakh in the nine-month period, from Rs 21,806.87 lakh as of March 2024.
This sharp increase in costs has compressed margins, raising questions about operational efficiency and cost management as the company looks to scale.
The IPO will comprise 96.5 lakh equity shares of Rs 10 each, including a fresh issue of 86.5 lakh shares.
An additional 10 lakh shares will be offloaded by the promoters under the offer-for-sale (OFS) route, allowing them to partially exit their investment.
GYR Capital Advisors Private Limited is acting as the sole Book Running Lead Manager (BRLM) for the IPO.
The company is engaged in export trading of both new and used or refurbished construction machinery.
Its product range includes hydraulic excavators, cranes, bulldozers, backhoe loaders, motor graders, soil compactors, wheel loaders, and asphalt pavers.
However, the financials suggest that rising input and operational costs could be a concern.
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