Jerash Holdings (US), Inc. (JRSH) stock intrinsic value fair value estimate & owner earnings analysis

Jerash Holdings makes garments in Jordan for well-known apparel and footwear brands and ships them mainly to the United States. It has produced for VF Corporation since 2012, today mostly outerwear for The North Face. VF accounted for 52% of sales in the fiscal year ended March 2026 (65% a year earlier), New Balance 14%, and newer customers such as Hansoll, Acushnet and Tharanco are growing. Apparel made in Jordan enters the United States duty-free under the US-Jordan Free Trade Agreement. Important caveat: none of the customers is under a long-term contract or minimum-purchase commitment, so customers can reduce orders at their own choice. What the business really earns. We measure owner earnings as operating cash flow, with the swings in receivables, inventory, supplier advances and payables stripped out, less stock compensation and less the capital spending needed to stay in business. Over the past six fiscal years (2021 to 2026) this came to $0.42, $0.55, -$0.06, -$0.37, $0.08 and $0.17 per share. The middle of that range, about $0.12 per share, is our starting point. That window covers the fiscal 2022 peak, the acquisitions and factory build-out of fiscal 2022 and 2023, the slump that followed and the recovery. Earlier years (fiscal 2018 to 2020) describe a smaller business with under $100 million of annual sales. Capital spending has been heavy (dormitories and a factory premises bought in fiscal 2026 for about $3.6 million), and the company says it expects spending to rise over the next two fiscal years, so we count it as a real cost of the business. Supplier advances have also absorbed cash in each of the last two years ($3.6 million and $2.0 million), although our measure removes them as timing. Growth reconciliation. Owner earnings per share rose from $0.08 to $0.17 in fiscal 2026. We assume no growth in year one and start from $0.12, below that recent figure. Base case, $1.42 per share. Owner earnings stay at about $0.12 per share for 20 years, then nothing is credited. The 14-year VF relationship and the duty-free treaty support a long run, but with no contracts we give no value beyond 20 years and credit no growth. New customers, added capacity and margin gains are not counted because they have not yet produced a repeatable record. Bear case, $0.11 per share. Two more years like fiscal 2023 and 2024, when owner earnings averaged a loss of $0.22 per share a year, before earnings settle at the fiscal 2025 level of $0.08 for ten more years, then nothing. The risks are named in the filings: VF's sales fell $7.1 million in fiscal 2026 and can be cut at will, and US tariffs on Jordanian imports have ranged from 10% to 15% since April 2025 (the 10% tariff in place at year end was set to expire in July 2026). Bull case, $3.58 per share. Owner earnings return to about $0.38 per share, the average of the three best years in the window above (fiscal 2021, 2022 and 2026), for ten years and half that ($0.19) for ten more, then nothing. The latest quarter, ended June 2026, shows sales of $50.2 million against $39.6 million a year earlier and net income of $1.7 million against $0.3 million. One quarter does not move our base case, but it supports this outcome. What would make these estimates wrong: a further loss of VF volume or a tariff change that removes Jordan's advantage would push toward the bear case. Steady wins with new customers, without another large capital build, would push toward the bull case. The company pays a $0.20 per share dividend, about $2.5 million a year, which is more than our base earnings level, so it is being funded partly from cash on hand ($10.8 million plus $1.7 million restricted at March 2026).