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Sep 23, 2015

Jain Irrigation Sep


Systems
Ltd
23, 2015

Industrials - Machinery - Agricultural Machinery

Jain Irrigation Systems Ltd


Bloomberg Code: JI IN

BUY

India Research - Stock Broking

NBFC Led Business Model to Eliminate the Balance Sheet


setbacks, Debt reduction is Key for Margin Expansion

Recommendation (Rs.)
CMP

60

JISL to bring in synergies to its MIS business:

Upside (%)

26

For the customers in the

irrigation business, there are not many financing options available for farming

activities. JISL has floated Sustainable Agro Commercial Finance Ltd (SAFL),

a NBFC which provides finance to farmers. This could able to ease its stretched
balance sheet and reduce the working capital cycle.

Margins likely to expand: Polymers are the raw materials for piping as well as

irrigation business; and are the derivatives of crude oil. Softening crude oil prices
could decline the raw material costs. With a presumption of lower crude oil prices,
the margins could expand during the coming years.

Target Price

75

Stock Information
Mkt Cap (Rs.mn/US$ mn)

26169 / 396

3M Avg. daily volume (mn)

4.3

52-wk High/Low (Rs.)


Beta (x)

Sensex/Nifty

93 / 51

1.5

25823 / 7846

O/S Shares(mn)

443.1

Face Value (Rs.)

2.0

Shareholding Pattern (%)


Promoters

28.7

augurs well for the company towards needs of the customers and expansion of the

DIIs

11.7

High entry barrier business:

Stock Performance (%)

Widespread dealer network for MIS growth:

Strong dealer network of over

4000 with farming background and are influential in their respective regions

FIIs

business.

Others

In the context of dealing with Government,

dependence on Government subsidies, inherent issues of weather etc make it


difficult for the other players to enter into this MIS business.

31.9
27.8

Absolute

Relative to Sensex

1M

3M

6M

12M

(6)

(14)

(2)

(32)

(0)

(8)

(30)

Source: Bloomberg

Valuation and Outlook


Going ahead, we anticipate better operational performance and lower interest

costs to drive PAT growth. However, debt reduction remains a key monitorable. We
initiate BUY with a target price of Rs.75, based on 15x FY17E EPS. At current
levels, the stock is trading at 16.8x FY16E EPS and 11.8x FY17E EPS.

Relative Performance*
200
150
100

Key Risks

50
0

yyWithdrawal of subsidies.

Jul-12

yyExposed to foreign currency fluctuations.

Jul-13
Sensex

Jul-14

Jul-15
JISL

Source: Bloomberg; *Index 100

Exhibit 1: Valuation Summary (Rs. Mn)


YE Mar (Rs. Mn)
Net Sales
EBITDA

EBITDA Margin (%)


Adj. Net Profit

FY13

FY14

FY15

FY16E

FY17E

50217

58281

61579

66669

71145

14.4

13.2

12.8

13.2

13.7

7253

31

(398)

0.1

(1.8)

EPS (Rs.)

0.1

PE (x)

NA

RoE (%)

7700

(0.9)
NA

7875

8829

9772

553

1645

2333

2.6

7.1

9.3

1.2

NA

3.6

16.8

5.0

11.8

Source: Company, Karvy Research

For private circulation only. For important information about Karvys rating system and other disclosures refer
to the end of this material. Karvy Stock Broking Research is also available on Bloomberg, KRVY<GO>,
Thomson Publishers & Reuters

Analyst Contact
Joyjit Sinha

040 - 3321 6275

joyjit.sinha@karvy.com

Sep 23, 2015


Jain Irrigation Systems Ltd

Company Background

Company Financial Snapshot (Y/E Mar)


Profit & Loss (Rs. Mn)
FY15

FY16E

FY17E

Net sales

61579

66669

71145

EBITDA

7875

8829

9772

Optg. Exp (Adj for OI)

53704

Depreciation

57840

2441

Interest

2541

4692

Other Income

4394

331

PBT

451

1073

Tax

2345

61373

2691
4232

478

3327

(239)

(703)

(998)

12.8

13.2

13.7

P/E (x)

NA

16.8

11.8

Dividend yield (%)

0.8

0.8

0.8

Adj. PAT

553

1645

2333

Profit & Loss Ratios


EBITDA margin (%)

Net profit margin (%)

0.9

EV/EBITDA (x)

2.5

5.3

4.7

Jain Irrigation Systems Ltd (JISL) operating in Micro Irrigation


industry and manufactures Drip and Sprinkler Irrigation systems
and components, PVC Pipes, Polyethylene & Polypropylene
Piping Systems; Plastic Sheets; Agro Processed Products
include Dehydrated Onions and Vegetables; Processed Fruits
(Purees, Concentrates & Juices); Tissue Culture, Hybrid &
Grafted Plants; Greenhouses, Poly and Shade Houses; Biofertilizers; Green energy solutions include Solar Photovoltaic
(Solar lighting and appliances, Solar pumping systems),
Solar water heating systems, Bio-Energy sources, Financial
services and other agricultural inputs since last 27 years. JISL
is operating with 14 subsidiary operating companies (including
2nd step subsidiaries). It has 26 plants across 116 countries
and 5485 distributors around the globe.

3.3
4.1

Source: Company, Karvy Research

Cash Flow (Rs. Mn)

Balance sheet (Rs. Mn)


FY15

FY16E

FY17E

Total Assets

83799

85768

88007

PBT (after exceptional item)

Current assets

49289

52450

54853

Interest (net)

Net Fixed assets

24531

Other assets

25036

8933

7159

25195
6751

Total Liabilities

83799

85767

88006

Debt

16957

16275

15675

Networth

21399

Current Liabilities

23199

43783

Other Liabilities

44838

1660

1455

25079
45766

1486

Balance Sheet Ratios


RoE (%)

2.6

RoCE (%)

Net Debt/Equity

7.1

15.0

17.1

18.5

0.3

0.3

0.3

1.8

Equity/Total Assets
P/BV (x)

1.7

1.3

1.2

Source: Company, Karvy Research

Exhibit 2: Shareholding Pattern (%)

Others
27.8%

9.3
1.5
1.1

FY16E

FY17E

310

2345

3327

4692

4394

4232

Depreciation

2441

Tax

(271)

Changes in WC
Others

CF from Operations

2541
(561)

2691
(859)

(868)

(2380)

(1381)

6613

6825

8307

307

486

296

Capex

(2205)

(1643)

(3000)

CF from Investing

(2288)

(1454)

(2811)

(270)

(270)

(270)

Others

(83)

Change in Debt

1656

Dividends

Interest paid

(4640)

CF from Financing

(3254)

Change in Cash

1070

189

(982)

(4394)

(5646)

(275)

189

(900)

(4232)

(5402)

93

Source: Company, Karvy Research

Exhibit 3: Revenue Segmentation (%)

Promoters
28.7%

Industrial
Products
35.6%

DIIs
11.7%

Green Energy
2.1%

Hi-tech
agri input
products
62.3%

FIIs
31.9%
Source: Company, Karvy Research

FY15

Source: Company, Karvy Research

Sep 23, 2015


Jain Irrigation Systems Ltd

Financial and Operational consolidation to drive bottom line:


JISL is the largest supplier of Micro Irrigation Systems (MIS) in India. Its strong brand name along with agricultural expertise and
broad network of dealers are the contributors to its growth. During FY13 and FY14, it has consolidated its main MIS business,
which has good revenue growth through recovery of receivables. Starting FY15, the management has indicated its focus on
positive revenue growth.

Focus on positive cash flow and deleveraged Balance Sheet:


For the customers in the irrigation business, there are not many financing options available to farming and due to delayed
subsidy on irrigation products. This has resulted into stretched Balance Sheet with shoot up in the receivables. To minimise this
complex situation, the company has initiated a Non-Banking Financial Company (NBFC) to finance the customers.
The current equity subscription of this NBFC is Rs. 1,200 Mn, with the company holding 49%, Promoter Group (Jain Family)
holding 21%, Mandala Capital holding 20% while World Banks Private Equity Arm IFC (International Finance Corporation)
holds 10% of equity share capital. With this structure, the company can provide financing to the farmers during the delay period
till the receipt of the subsidy from the governments and eventually this will create financial liquidity in the farming sector.

World Micro Irrigation and sprinkler irrigation could be new opportunities for global expansion:
The World Micro Irrigation (MI) market is one of the fastest growing segments of global agricultural industry. Increase in crop
production, protection against drought-like situation are the major drivers of the MI market. Where there is scarcity and costly
labour, large areas need to be irrigated with minimum waste of time and water, MI systems come into play. The global market
players like JISL to be benefited from responding to these new opportunities by expanding their global presence and product
lines.

Huge scope for improvement in efficient water irrigation:


MI system is one of the most efficient ways of watering crops and plants. The agricultural sector consumes over 80 percent of the
available water in India. Sustained focus of the government on pushing micro-irrigation as a tool to conserve water and address
the issue of food security could drive the demand for MI technique. JISL likely to be hugely benefited responding to the demand.

Government subsidies and reforms like Pradhan Mantri Krishi Sinchai Yojana (PMKSY) likely to contribute
towards JISLs growth:
The Governments (Central and State) provide upto 50% of capital subsidy for promoting the use of Micro Irrigation by farmers.
This can be said that the Government is encouraging for adoption of MI system as regular practice for future safety due to water
scarcity, in order to conserve natural water resources.
Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister, has given approval to a new scheme named
Pradhan Mantri Krishi Sinchayee Yojana (PMKSY). It will have an outlay of Rs.500 Bn over a period of 5 years (FY16 to
FY20) and the allocation during the current financial year is Rs. 53 Bn. One of the major objectives of PMKSY is to improve
on-farm water use efficiency to reduce wastage of water, enhance the adoption of precision-irrigation and other water saving
technologies (more crop per drop). Being a leading manufacturer and supplier of irrigation systems, PVC & Polyethylene pipes,
there could be every chance that JISL could be benefited from such scheme of Indian government.

GoIs focus on agriculture, sanitation and infrastructure segments augurs well for its Polyethylene Pipes (PE
Pipes), Fittings PVC pipes and fittings business:
Piping industry for next decade expected to grow at 15% CAGR which is mainly because of demand in agriculture pipes,
plumbing pipes and industrial pipes. A robust demand is expected for Polyethylene Pipes (PE Pipes) fittings, PVC pipes fittings
from the irrigation and sanitation space in the coming years. Users are opting for PE pipes and PVC sheets due to its techno
commercial superiority. Governments massive drive towards improving infrastructure in the country has been giving positive
vibes to the PE Pipes segment of the market.
PE pipes used for making availability of water to the farmers replacing canals, PE pipe network used for gas transportation,
Irrigation-Sprinkler and drip segment and also transportation of drinking water segment as well. Concept of green building is
growing at rapid space to boost the products of PVC sheets like PVC doors and windows replacing wooden doors and windows.

Widespread dealer network for MIS growth:


In India, JISL has strong dealer network of over 4000, with most of them are from farming background and are influential in
their respective regions. This strong local sales force gives JISL a deep insight towards the needs of its customers in India and
assists the company in providing strong after-sales support and sharing knowledge with the customers.
3

Sep 23, 2015


Jain Irrigation Systems Ltd

Well diversified business model to de-risk the business


Exhibit 4:
Green
Energy
1,266

Industrial
Products
21,944

Hi-tech
agri input
products
38,369

JISL offers its services & products to various segments like Hi-tech agri
input products, industrial products and green energy. We believe that the
company is well insulated from any economic slowdown as its multiple
businesses could maintain its top line growth even during slowdown in
other sectors. Its diversified business model not only acts as a profitability
driver but also insulates it from slowdown in any segment.

Source: Company, Karvy Research

Geographical diversification of revenue to insulate from sales and operations in particular region
Exhibit 5:

North
America
9.8%

Rest of the
World
18.6%
India
54.9%
Europe
16.7%

JISL has production and processing facilities across India; sales growing
in various states of India and internationally, which makes its sales and
production less susceptible to weather or other risks in a particular region.
JISL is set to expand internationally and looking for opportunities for future
growth especially in agriculture markets. Its revenue is diversified across
wide range of products and customers. No single customer accounts for
more than 5% of its total revenue in FY14.

Source: Company, Karvy Research

One-stop-shop for total Agricultural input needs:


JISL has the capability and adequate support infrastructure to take up total turnkey agricultural development projects of any size
within the country or abroad, irrespective of land, topography, soil, water and other agro climatic conditions.
It has taken some end-to-end water solution projects by transporting water, creating new water reservoirs, creating irrigation
systems and assisting with agronomy through the canal command area projects and aimed to do more such projects for a
sustainable growth. Some of the African countries shown good interest in such projects due to JISLs inherent competencies
and technical supremacy in this field.

JISL positioning to capitalize on the growing opportunities in the world food processing Industry:
JISL is largest manufacturer of Mango pulp, puree and concentrate in the world, and the third largest manufacturer of dehydrated
onions the largest manufacturer of Tissue Culture banana plants in the world. India ranks first in the world in production of fruits
and second in vegetables, accounting roughly 10 and 15 percent, respectively, of total global production. Despite the large
production of fruits and vegetables, it is estimated that only approximately 6 per cent of total agro output of India is currently
processed as against up to 60-80 per cent in some developed countries. Indias share in the global food trade is only 1.5%. All
of this implies that there is a great potential to grow for this industry. An increase from 6% to 20% in terms of processing and
increase in value addition from 20% to 30% will translate into quantum jump in the size of the processed fruit and vegetable
industry. The National policy aims to increase the percentage of food being processed in the country to 25 percent by 2025.
It is proposed by the companys management that JISL Indian Food Business to carve out to form a wholly owned subsidiary
company named as Jain Farm Fresh Foods Limited (JFFFL). The carving out of Indian Food Business to JFFFL will also allow
creation of strategic focus and value creation opportunity as a consequence. This could enable the company to organize its
foods vertical under an independent and focused management and achieve benefits of scale. Management expected to achieve
15-20% growth in food business during FY16E.

Sep 23, 2015


Jain Irrigation Systems Ltd
Exhibit 6: Business Assumptions
Y/E Mar (Rs. Mn)

FY14

FY15

FY16E

FY17E Comments

Consolidated

Revenue

Management guides a double digit growth during


FY16E. It expects to achieve 15% to 20% growth
in MIS and food businesses in FY16E. We have
71145 assumed more conservatively growth rates of
12% and 8% in MIS business for FY16E and
FY17E respectively; and 5% growth on YoY basis
for both FY16E and FY17E.

58281

61579

66669

Revenue Growth (%)

16.1

5.7

8.3

EBITDA

7700

7875

8829

EBITDA Margins (%)

13.2

12.8

13.2

EBIT

6117

5765

6739

7559

We kept the finance cost consistent though the


management indicated for a reduction of debt
2333 during FY16E. We have assumed there could be
reduction in finance cost during FY17E in line with
reduction of the debt.

6.7

Polymers are the raw materials for piping as well


as irrigation business which are the derivatives
of crude business. Softening of crude oil prices
could decline the raw material prices. We have
9772
assumed a decline of 1% for both FY16E and
FY17E on pricing of raw materials to sales
multiple. Management guides for a fall of 5% to 6%
of polyethylene prices.
13.7 We are expecting the EBITDA margins to expand.

Net profit after all adjustments

(398)

553

1645

EPS

(0.9)

1.2

3.6

5.0

-to +

194.0

41.8

(2205)

(1643)

(3000)

EPS Growth (%)


Capex (ex. Acquisition) - cash capex

(3322)

Net CFO
Net Debt (LT + ST)

We expect EBIT to grow at 17% and 12% on YoY


basis during FY16E and FY17E.
Management guides for a capex of ~ Rs.1500 mn
during FY16E.

We are expecting robust cash flow from operation


8307 on the back of increase in sales and improvement
in debtors collection period.

5731

6613

6825

36866

39358

38376

37476

2409

4408

5182

5307

Free Cash Flow

We expect EBIT to grow at 17% and 12% during


YoY basis during FY16E and FY17E.

Source: Company, Karvy Research

Management indicated there could be a reduction


of debt which we assumed during FY17E.
A robust free cash flow owing to good top line
growth and decline of debtor collection period.

Exhibit 7: Karvy vs Consensus


Karvy

Consensus

Divergence (%)

FY16E

66669

67273

(0.9)

FY17E

71145

76402

(6.9)

FY16E

8829

9099

(3.0)

FY17E

9772

10720

(8.8)

FY16E

3.6

4.2

(14.3)

FY17E

5.0

7.0

(27.7)

Comments

Revenues (Rs. Mn)

EBITDA (Rs. Mn)

EPS (Rs.)

We have assumed conservatively a growth rates


of 12% and 8% in MIS business for FY16E and
FY17E respectively; and 5% growth on YoY
basis for both FY16E and FY17E. Management
guides for a double digit growth of 15-20% in
MIS and Food businesses.

Source: Bloomberg, Karvy Research

Sep 23, 2015


Jain Irrigation Systems Ltd

Exhibit 8: Operating Revenu

58281

50217

20000

49206

40000

2.1%

8.3% 6.7%
71145

60000

5.7%

66669

16.1%

61579

80000

20%
15%
10%
5%

FY17E

FY16E

FY15

FY14

FY13

0%
FY12

We expect the revenue to grow at a CAGR of 9% during FY14-FY17E. We


have anticipated a double digit growth in Hi-tech agri input products and
nominal growth in industrial products and green energy. We expect JISLs
overall operating revenue to grow at 8% and 7% during FY16E and FY17E
respectively.

Operating Revenue (Rs in Mn)


Growth (%)
Source: Company, Karvy Research

Exhibit 9: Segment Revenue (Rs in Mn)


YE Mar (Rs. Mn)
Hi-tech agri input products

Industrial Products

FY12

FY13

FY14

FY15

33798

31656

36347

38369

1770

1266

13536

16252

20165

Hi-tech agri input products

21.8

17.6

14.3

13.9

Non-conventional energy

20.1

17.1

15.3

10.4

Green Energy

1872

2309

21944

EBIT Margins (%)


Industrial products

9.9

7.3

9.5

9.9

Source: Company, Karvy Research

Exhibit 10: EBITDA (Rs. Mn) & EBITDA Margin (%)


13.7%
9772

13.2%
8829

7875

7700

14.4% 13.2% 12.8%


7253

5000

16.6%
8155

10000

20%
15%
10%
5%

FY17E

FY16E

FY15

FY14

FY13

0%
FY12

We expect the EBIDTA to register a growth of 9.5% CAGR during


FY14-FY17E. JISL likely to maintain the margins at 13-14% during
FY15-FY17E. Softening crude prices could decline the polymer prices
which might help to improve the margins further.

EBITDA (Rs. Mn )
EBITDA Margins (%)
Source: Company, Karvy Research

PAT (Rs in Mn )

4
2
0
-2

FY17E

553

-0.7
FY14
-398

31
FY13

FY12

-500

0.1

FY15

0.9
500

3.3

1645

2.5

FY16E

1500

4.5
2235

2500

2333

Exhibit 11: PAT and PAT Growth

We expect the net profit has recovered to Rs. 553 mn during FY15. We
expect the growth momentum to be maintained by the company on the
back of improving top line and decrease in raw material prices. We expect
PAT to register growth of 198% and 42% during FY16E and FY17E on YoY
basis.

Growth (%)

Source: Company, Karvy Research

Sep 23, 2015


Jain Irrigation Systems Ltd
Exhibit 12: RoE and RoCE (%)
23.6%

20%

17.3% 16.7%

12.7%

15%

15.0%

17.1%

7.1%

10%

9.3%

5%
0%

RoCE (%)

FY16E

FY14

-5%

FY13

FY12

0%

15%
10%

-1.8% 2.6%

0.1%

FY15

5%

18.5%

JISLs RoE (Return on Equity) is modest because of high finance cost. Its
RoCE has always been strong and we expect that it will be stable in the
coming years.

FY17E

25%

RoE (%) (RHS)

Source: Company, Karvy Research

Exhibit 13: Debtors and Collection Period

18768

111

111
21904

111

20505

118
18770

10000

154

21129

20000

168
22712

30000

150
100
50

Debtors are in line with the revenue but the collection period declined from
168 days in FY12 to 111 days in FY15.

FY17E

FY16E

FY15

FY14

FY13

0
FY12

200

Average Debtors (Rs in Mn)


Collection period (in days)
Source: Company, Karvy Research

Exhibit 14: Return on Assets


4%

3.0%

2.7%

3%

1.9%

2%
0.7%

FY17E

FY16E

FY13

-1%

FY12

0%

We expect return on assets to recover in the next couple of years.

-0.5%
FY15

0.0%

FY14

1%

Return on Assets
Source: Company, Karvy Research

Exhibit 15: Current Ratio


1.25
1.15
1.10

1.2

1.2

1.20

1.1

1.1

1.2

1.1

JISL maintained current ratio at more than 1x indicating that the company
is meeting the current liabilities using its current assets.

1.05
FY17E

FY16E

FY15

FY14

FY13

FY12

1.00

Current Ratio
Source: Company, Karvy Research

Sep 23, 2015


Jain Irrigation Systems Ltd
Exhibit 16: Working Capital Cycle
176

170

160

142

143

152

151

FY17E

180

FY16E

200

140
FY15

FY14

FY13

FY12

120

Cash conversion cycle has declined from 176 days in FY12 to 143 days
in FY15. We expect the company will maintain the same level of working
capital cycle in terms of number of days.

Working capital cycle


Source: Company, Karvy Research

Exhibit 17: Debt Equity Ratio


2.5
2.0
2.0

1.7

1.6

1.8

1.7

1.5

1.5

FY17E

FY16E

FY15

FY14

FY13

FY12

1.0

JISL is in the process of 25% stake sale in food processing business,


which would help reduce overall debt burden of the company. Debt equity
multiple has also declined from 2.0x in FY12 to 1.8x in FY15.

Debt Equity Ratio


Source: Company, Karvy Research

Exhibit 18: Company Snapshot (Ratings)


Low
1

High
2

Quality of Earnings
Domestic Sales
Exports

Net Debt/Equity

Working Capital Requirement


Quality of Management
Depth of Management
Promoter

Corporate Governance
Source: Company, Karvy Research

33
33

33
33
33
33

33
33
33

Sep 23, 2015


Jain Irrigation Systems Ltd

Valuation & Outlook


Going forward, it is expected that the company to focus on collection of debtors, debt reduction, which in turn could lead to
favorable return ratios and a healthy balance sheet. Government initiatives like Pradhan Mantri Krishi Sinchai Yojana, extending
subsidies towards implementing MIS could provide a cushion to the companys revenue growth.
JISL historically traded at PE band of 30x-50x. At CMP Rs.60 the stock is trading at 11.8x of FY17E. We have assigned 15.0x
PE of FY17E EPS for a target price of Rs.75 per share representing an upside potential of 26% in 9-12 months.
Exhibit 19: PE Band
120
100
80
60
40
20
0
Sep-13

Nov-13

Jan-14

Mar-14

PE

May-14

Jul-14

5x

Sep-14

Nov-14

Jan-15

15x

Mar-15

May-15

30x

Jul-15

Sep-15

50x

Source: Company, Karvy Research

Exhibit 20: P/BV Band


200.0

3.0
2.5

150.0

2.0

100.0

1.5
1.0

50.0

0.5

0.0

0.0

Sep-12

Jan-13
1x

May-13
1.5x

Sep-13

Jan-14
2x

May-14
2.5x

Sep-14

Jan-15
3x

May-15

Sep-15
P/BV (RHS)

Source: Company, Karvy Research

We expect the JISL to restructure its debt and debtors collection period to and restructure is balance sheet. Currently, the stock
is trading at 1.3x FY15 BV, 1.2x FY16E BV and 1.1x FY17E BV. We value the stock at 1.4x FY17E BV for a target price of Rs.75
per share representing an upside potential of 26% in 9-12 months.

Key Risks
yyWithdrawal of subsidies: Withdrawal of subsidies for micro irrigation systems by Central and State Governments is a key
risk which could lead to JISLs de-growth.
yyExposed to foreign currency fluctuations: More than 45% of the revenue is from abroad. Volatility in currency may impact
export revenues as well as margins.

Sep 23, 2015


Jain Irrigation Systems Ltd

Financials
Exhibit 21: Income Statement
YE Mar (Rs. Mn)

FY13

FY14

FY15

FY16E

FY17E

Revenues

50217

58281

61579

66669

71145

Operating Expenses

42964

50582

53704

57840

61373

Growth (%)

(11.1)

6.2

2.3

12.1

10.7

Growth (%)
EBITDA

Depreciation & Amortization

2.1

7253

16.1

7700

5.7

7875

8.3

8829

6.7

9772

1696

2045

2441

2541

2691

6226

6117

5765

6739

7559

125

(860)

310

2345

3327

31

(398)

YE Mar (Rs. Mn)


Cash & Cash Equivalents

Other Income
EBIT

Interest Expenses

PBT (after exceptional item)


Tax

Adjusted PAT (After MI)


Growth (%)

Source: Company, Karvy Research

668

4855

(80)

463

4676

331

4692

451

4394

478

4232

462

(239)

(703)

(998)

+ to -

- to +

197.5

41.8

FY13

FY14

FY15

FY16E

FY17E

2359

1968

3044

2770

2863

(98.6)

553

1645

2333

Exhibit 22: Balance Sheet

Sundry Debtors
Inventory

Loans & Advances


Investments
Net Block
CWIP

Miscellaneous

19547

17994

19541

21469

22339

5808

8818

7582

6926

6769

17231

38

18364

14

18566

621

19071

621

20148

621

24327

25579

25051

25036

25195

8150

8500

8868

8752

8864

749

807

526

1122

1208

Total Assets

78208

82044

83799

85768

88007

Debt (LT + ST)

34170

36866

39358

38377

37477

Current Liabilities & Provisions


Other Liabilities

Total Liabilities

Shareholders Equity
Reserves & Surplus

20393
1966

56528

1072

20608

21565
1654

60084

925

20831

21382
1660

62400

925

20474

22737
1455

62569

925

22274

23965
1486

62928

925

24154

Total Networth

21680

21755

21399

23199

25079

Total Networth & Liabilities

78208

82044

83799

85768

88007

Minority Interest

Source: Company, Karvy Research

205

10

Sep 23, 2015


Jain Irrigation Systems Ltd
Exhibit 23: Cash Flow Statement
YE Mar (Rs. Mn)

FY13

FY14

FY15

FY16E

FY17E

PBT

125

(860)

310

2345

3327

4855

4676

Depreciation

1696

Tax Paid

(295)

Interest

Changes in WC

Other income and non cash item

Cash flow from operating activities


Inc/dec in capital expenditure
Inc/dec in investments
Others

Cash flow from investing activities


Inc/dec in borrowings
Issuance of equity
Dividend paid

2045

2441

(41)

(271)

(3127)

(1551)

4275

5731

1021

1461

4693

2541
4394

(561)

2691
4232

(859)

(868)

(2380)

(1381)

6613

6825

8307

307

486

296

(3000)

(3322)

(2205)

(1643)

(3000)

(773)

410

(73)

189

189

356

(1)

(10)

(3418)

(2913)

(2288)

(1454)

(2811)

3903

(586)
(469)

1216

(265)

1656

(270)

(982)
(270)

(900)
(270)

Interest paid

(4843)

(4638)

(4640)

(4394)

(4232)

Cash flow from financing activities

(1832)

(3202)

(3254)

(5646)

(5402)

Others

Net change in cash

Source: Company, Karvy Research

162

(974)

485

(384)

1070

(275)

93

Exhibit 24: Key Ratios


YE Mar

FY13

FY14

FY15

FY16E

FY17E

EBITDA Margin (%)

14.4

13.2

12.8

13.2

13.7

2.5

3.3

EBIT Margin (%)

Net Profit Margin (%)

Dividend Payout ratio


Net Debt/Equity
RoE (%)

RoCE (%)

12.4

0.1

10.5

(0.7)

714.3

(57.5)

0.1

(1.8)

1.6

0.9

41.3

1.8
2.6

10.1
14.1

1.7
7.1

10.6

9.9
1.5
9.3

16.7

15.0

17.1

18.5

FY13

FY14

FY15

FY16E

FY17E

0.1

(0.9)

1.2

3.6

5.0

BV (Rs.)

47.7

47.0

46.3

50.2

54.2

P/BV (x)

1.3

1.4

1.3

1.2

1.1

Source: Company, Karvy Research

17.3

1.7

9.4

Exhibit 25: Valuation Parameters


YE Mar
EPS (Rs.)

DPS (Rs.)
PE (x)

EV/EBITDA (x)
EV/Sales (x)

0.5

NA
5.5
0.8

0.5

NA
5.6
0.7

0.5

NA

0.5

16.8

5.3
0.7

Source: Company, Karvy Research; *Represents multiples for FY13, FY14 & FY15 are based on historic market price

4.7
0.6

0.5

11.8

4.1
0.6

11

Sep 23, 2015


Jain Irrigation Systems Ltd
Stock Ratings
Buy

Sell

Hold

Absolute Returns
> 15%

5-15%
<5%

Connect & Discuss More at


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