1. At a Glance
Johnson Controls-Hitachi isn’t just selling air conditioners—it’s testing investor patience by freezing profits. Despite a sleek brand, the stock trades at a sauna-hot P/E of 119. Margins? Thinner than a wafer in summer. Yet, the company just dropped a Rs.36 dividend bomb. Why? Maybe to distract us from the -51% quarterly profit nosedive.
2. Introduction with Hook
If making money was as easy as turning on an AC, JCHAC would be chilling in profit paradise. But this summer, they’ve been sweating bullets. While your living room gets cooler, the company’s income statement reads like a meltdown.
Q1 FY26 Net Profit: Rs.15.2 Cr (down 51.26%)
Q1 FY26 Sales: Rs.853 Cr (down 14.4%)
Plot twist? The auditors just resigned. Yes, Price Waterhouse dipped.
3. Business Model (WTF Do They Even Do?)
They basically make air conditioners. Period. But say it in a boardroom and it becomes:
“Integrated HVAC-R solution provider offering innovative cooling experiences across residential, commercial, and industrial verticals.”
Translation: They sell ACs, VRFs, and chillers—and wrap it in jargon so cold it gives frostbite.
Hitachi-branded, but not fully Japanese anymore. It’s the product of a marriage between Johnson Controls and Hitachi Appliances—a joint venture where Hitachi Global owns the tech, and this Indian arm does the heavy lifting (read: assembling and sweating it out in the market).
4. Financials Overview
| Metric | Q1 FY26 | Q1 FY25 | YoY Change |
|---|---|---|---|
| Revenue | ₹853 Cr | ₹996 Cr | -14.4% |
| Operating Profit | ₹36 Cr | ₹57 Cr | -36.8% |
| OPM | 4.2% | 5.7% | Meh |
| PAT | ₹15 Cr | ₹31 Cr | -51.2% |
| EPS | ₹5.61 | ₹13.29 | RIP |
Margins are tighter than Mumbai parking spots. The company’s quarterly profitability graph looks like a failed EKG reading. No steady pulse.
5. Valuation
Let’s bring out the magnifying glass and the aspirin.
- P/E: 119x (aka nosebleed territory)
- EV/EBITDA: ~40x (based on FY25 EBITDA of ₹135 Cr)
- Fair Value Range:
- P/E 40x on FY26E EPS (₹20): ₹800
- EV/EBITDA 25x on FY26E EBITDA: ₹1,100
EduVerdict: If you’re buying this at ₹1,758, you probably also think Maggi is reasonably priced at airport kiosks.
6. What’s Cooking – News, Triggers, Drama
- Auditor Exit (Jul 2025): Price Waterhouse resigned due to “acquisition-related conflict.” Sounds fancy. Smells fishy.
- Dividend Shower: Rs.36 interim dividend despite weak profits. Must be to cool shareholder tempers.
- Profit Drop: Q1 PAT halved. Blame it on inflation, sluggish summer sales, or maybe ghosts in the VRF system.
More plot twists than a daily soap, but less emotional resolution.
7. Balance Sheet
| Metric | Mar 2025 |
|---|---|
| Equity | ₹27 Cr |
| Reserves | ₹614 Cr |
| Total Borrowings | ₹42 Cr |
| Total Assets | ₹1,799 Cr |
Highlights:
- Debt is minimal. Not Titanic-level, but enough to rock a kayak.
- Net Worth is stable.
- Assets are mostly in other current assets and working capital.
8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net CF |
|---|---|---|---|---|
| FY23 | -₹31 Cr | -₹43 Cr | ₹65 Cr | -₹8 Cr |
| FY24 | ₹254 Cr | -₹32 Cr | -₹172 Cr | ₹50 Cr |
| FY25 | ₹83 Cr | ₹0 Cr | -₹18 Cr | ₹66 Cr |
Commentary: Cash flow looks like your freelancer friend—always working, never really paid. But FY25 saw a decent cash inflow.
9. Ratios – Sexy or Stressy?
| Ratio | FY25 |
|---|---|
| ROE | 9.96% |
| ROCE | 13.8% |
| D/E | 0.07 |
| PAT Margin | 2.2% |
| P/E | 119x |
ROCE is flirting with respectability. ROE is okay-ish. But P/E? It’s what you get when pricing goes full Bollywood—dramatic and unjustified.
10. P&L Breakdown – Show Me the Money
| FY | Revenue | EBITDA | PAT |
|---|---|---|---|
| FY23 | ₹2,384 Cr | -₹18 Cr | -₹82 Cr |
| FY24 | ₹1,919 Cr | ₹135 Cr | -₹76 Cr |
| FY25 | ₹2,756 Cr | ₹112 Cr | ₹59 Cr |
“PAT grew 10%, but only if you squint really hard and ignore the ghosts of FY23 losses.”
11. Peer Comparison
| Company | Revenue (TTM) | PAT (TTM) | P/E | ROCE |
|---|---|---|---|---|
| Voltas | ₹15,413 Cr | ₹823 Cr | 54x | 17.6% |
| Blue Star | ₹11,968 Cr | ₹585 Cr | 62x | 26.2% |
| Amber Ent. | ₹9,973 Cr | ₹245 Cr | 101x | 14.5% |
| JCHAC | ₹2,613 Cr | ₹40 Cr | 119x | 13.8% |
Looks like the least drunk guest at a wedding full of finance bros. Everyone’s overpriced, but JCHAC took it personally.
12. Miscellaneous – Shareholding, Promoters
| Category | Jun 2025 |
|---|---|
| Promoters | 74.25% |
| FIIs | 1.11% |
| DIIs | 6.55% |
| Public | 18.08% |
Promoter holding is rock-solid—maybe too solid. But here’s the kicker: 32.3% of it is pledged. That’s not just borrowing—it’s a full-blown financial trust fall.
Statutory Auditor (Price Waterhouse) resigned in July 2025—officially due to “conflict.” Unofficially? We’re still cooling off from that news.
13. EduInvesting Verdict™
JCHAC has brand swagger, a clean balance sheet, and a promoter holding tighter than a grandmother’s hug. But… sales growth is meh, profits are moody, and P/E is laughable. It’s a decent pit stop—but don’t expect business class legroom.
Unless they pull off an operational miracle, this one might keep chilling in the mid-cap freezer.
Written by EduInvesting Team | July 24, 2025
Tags: Johnson Controls Hitachi, JCHAC, Q1 FY26, Financial Analysis, EduInvesting Premium
