JainIrrigation Karvy Sept24-2015

8/17/2019 JainIrrigation Karvy Sept24-2015

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Sep 23, 2015

Jain Irrigation Systems LtdIndustrials - Machinery - Agricultural Machinery Sep 23, 2015

Jain Irrigation Systems Ltd

India Research - Stock Broking BUY

Bloomberg Code: JI IN

Recommendation (Rs.)

CMP 60

Target Price 75

Upside (%) 26

Stock Information

Mkt Cap (Rs.mn/US$ mn) 26169 / 396

52-wk High/Low (Rs.) 93 / 51

3M Avg. daily volume (mn) 4.3

Beta (x) 1.5

Sensex/Nifty 25823 / 7846

O/S Shares(mn) 443.1

Face Value (Rs.) 2.0

Shareholding Pattern (%)

Promoters 28.7

FIIs 31.9

DIIs 11.7

Others 27.8

Stock Performance (%)

1M 3M 6M 12M

Absolute (6) (14) (2) (32)

Relative to Sensex (0) (8) 7 (30)

Source: Bloomberg

Relative Performance*

Source: Bloomberg; *Index 100

Analyst Contact

Joyjit Sinha

040 - 3321 6275

[email protected]

NBFC Led Business Model to Eliminate the Balance Sheetsetbacks, Debt reduction is Key for Margin Expansion

JISL to bring in synergies to its MIS business: For the customers in the

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

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

a NBFC which provides nance 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.

Widespread dealer network for MIS growth: Strong dealer network of over

4000 with farming background and are inuential in their respective regions

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

business.

High entry barrier business: In the context of dealing with Government,

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

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

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.

Key Risks

y Withdrawal of subsidies.

y Exposed to foreign currency uctuations.

For private circulation only. For important information about Karvy’s rating system and other disclosures refer

to the end of this material. Karvy Stock Broking Research is also available on Bloomberg, KRVY ,

Thomson Publishers & Reuters

Exhibit 1: Valuation Summary (Rs. Mn)

YE Mar (Rs. Mn) FY13 FY14 FY15 FY16E FY17E

Net Sales 50217 58281 61579 66669 71145

EBITDA 7253 7700 7875 8829 9772

EBITDA Margin (%) 14.4 13.2 12.8 13.2 13.7

Adj. Net Prot 31 (398) 553 1645 2333

EPS (Rs.) 0.1 (0.9) 1.2 3.6 5.0

RoE (%) 0.1 (1.8) 2.6 7.1 9.3

PE (x) NA NA NA 16.8 11.8Source: Company, Karvy Research

0

50

100

150

200

Jul-12 Jul-13 Jul-14 Jul-15

Sensex JISL

http://www.karvy.com/http://www.karvy.com/


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Company Background

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; Bio-

fertilizers; 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.

Exhibit 2: Shareholding Pattern (%)

Source: Company, Karvy Research

Exhibit 3: Revenue Segmentation (%)


Balance sheet (Rs. Mn)

FY15 FY16E FY17E

Total Assets 83799 85768 88007

Net Fixed assets 24531 25036 25195

Current assets 49289 52450 54853

Other assets 8933 7159 6751

Total Liabilities 83799 85767 88006

Networth 21399 23199 25079

Debt 16957 16275 15675

Current Liabilities 43783 44838 45766

Other Liabilities 1660 1455 1486

Balance Sheet Ratios

RoE (%) 2.6 7.1 9.3

RoCE (%) 15.0 17.1 18.5

Net Debt/Equity 1.8 1.7 1.5

Equity/Total Assets 0.3 0.3 0.3

P/BV (x) 1.3 1.2 1.1


Cash Flow (Rs. Mn)

FY15 FY16E FY17E

PBT (after exceptional item) 310 2345 3327

Depreciation 2441 2541 2691

Interest (net) 4692 4394 4232

Tax (271) (561) (859)

Changes in WC (868) (2380) (1381)

Others 307 486 296

CF from Operations 6613 6825 8307

Capex (2205) (1643) (3000)

Others (83) 189 189

CF from Investing (2288) (1454) (2811)

Change in Debt 1656 (982) (900)

Dividends (270) (270) (270)

Interest paid (4640) (4394) (4232)

CF from Financing (3254) (5646) (5402)

Change in Cash 1070 (275) 93


Company Financial Snapshot (Y/E Mar)

Profit & Loss (Rs. Mn)

FY15 FY16E FY17E

Net sales 61579 66669 71145

Optg. Exp (Adj for OI) 53704 57840 61373

EBITDA 7875 8829 9772

Depreciation 2441 2541 2691

Interest 4692 4394 4232

Other Income 331 451 478

PBT 1073 2345 3327

Tax (239) (703) (998)

Adj. PAT 553 1645 2333

Profit & Loss Ratios

EBITDA margin (%) 12.8 13.2 13.7

Net prot margin (%) 0.9 2.5 3.3

P/E (x) NA 16.8 11.8EV/EBITDA (x) 5.3 4.7 4.1

Dividend yield (%) 0.8 0.8 0.8


Promoters28.7%

FIIs31.9%

DIIs11.7%

Others27.8%

Hi-techagri inputproducts62.3%

IndustrialProducts35.6%

Green Energy2.1%

http://www.karvy.com/


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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 nancing 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 nance 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 Bank’s Private Equity Arm IFC (International Finance Corporation)

holds 10% of equity share capital. With this structure, the company can provide nancing to the farmers during the delay period

till the receipt of the subsidy from the governments and eventually this will create nancial 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 costlylabour, 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 beneted 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 ecient 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 beneted responding to the demand.

Government subsidies and reforms like Pradhan Mantri Krishi Sinchai Yojana (PMKSY) likely to contributetowards JISL’s 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 Aairs (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 nancial year is Rs. 53 Bn. One of the major objectives of PMKSY is to improve

on-farm water use eciency 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 beneted from such scheme of Indian government.

GoI’s focus on agriculture, sanitation and infrastructure segments augurs well for its Polyethylene Pipes (PEPipes), 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) ttings, PVC pipes ttings

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. Government’s 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 inuential 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.



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Exhibit 4:


Exhibit 5:


JISL oers 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 multiplebusinesses could maintain its top line growth even during slowdown in

other sectors. Its diversied business model not only acts as a protability

driver but also insulates it from slowdown in any segment.

JISL has production and processing facilities across India; sales growingin 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 diversied across

wide range of products and customers. No single customer accounts for

more than 5% of its total revenue in FY14.

Well diversified business model to de-risk the business

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

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 JISL’s inherent competencies

and technical supremacy in this eld.

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 rst in the world in production of fruitsand 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. India’s 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 company’s 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 benets of scale. Management expected to achieve

15-20% growth in food business during FY16E.

India54.9%

Europe16.7%

Northmerica9.8%

Rest of theWorld18.6%

Hi-techagri inputproducts38,369

IndustrialProducts21,944

GreenEnergy1,266



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Exhibit 6: Business Assumptions

Y/E Mar (Rs. Mn) FY14 FY15 FY16E FY17E Comments

Consolidated

Revenue 58281 61579 66669 71145

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

assumed more conservatively growth rates of12% and 8% in MIS business for FY16E and

FY17E respectively; and 5% growth on YoY basis

for both FY16E and FY17E.

Revenue Growth (%) 16.1 5.7 8.3 6.7

EBITDA 7700 7875 8829 9772

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

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.

EBITDA Margins (%) 13.2 12.8 13.2 13.7 We are expecting the EBITDA margins to expand.

EBIT 6117 5765 6739 7559We expect EBIT to grow at 17% and 12% during

YoY basis during FY16E and FY17E.

Net prot after all adjustments (398) 553 1645 2333

We kept the nance cost consistent though the

management indicated for a reduction of debt

during FY16E. We have assumed there could be

reduction in nance cost during FY17E in line with

reduction of the debt.

EPS (0.9) 1.2 3.6 5.0We expect EBIT to grow at 17% and 12% on YoY

basis during FY16E and FY17E.EPS Growth (%) -to + 194.0 41.8

Capex (ex. Acquisition) - cash capex (3322) (2205) (1643) (3000)Management guides for a capex of ~ Rs.1500 mn

during FY16E.

Net CFO 5731 6613 6825 8307

We are expecting robust cash ow from operation

on the back of increase in sales and improvement

in debtors collection period.

Net Debt (LT + ST) 36866 39358 38376 37476Management indicated there could be a reduction

of debt which we assumed during FY17E.

Free Cash Flow 2409 4408 5182 5307A robust free cash ow owing to good top line

growth and decline of debtor collection period.


Exhibit 7: Karvy vs Consensus

Karvy Consensus Divergence (%) Comments

Revenues (Rs. Mn)

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.

FY16E 66669 67273 (0.9)

FY17E 71145 76402 (6.9)

EBITDA (Rs. Mn)

FY16E 8829 9099 (3.0)

FY17E 9772 10720 (8.8)

EPS (Rs.)

FY16E 3.6 4.2 (14.3)

FY17E 5.0 7.0 (27.7)

Source: Bloomberg, Karvy Research



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Exhibit 8: Operating Revenu


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


Exhibit 11: PAT and PAT Growth


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 JISL’s

overall operating revenue to grow at 8% and 7% during FY16E and FY17E

respectively.

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.

We expect the net prot 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.

Exhibit 9: Segment Revenue (Rs in Mn)

YE Mar (Rs. Mn) FY12 FY13 FY14 FY15

Hi-tech agri input products 33798 31656 36347 38369

Industrial Products 13536 16252 20165 21944

Green Energy 1872 2309 1770 1266

EBIT Margins (%)

Hi-tech agri input products 21.8 17.6 14.3 13.9

Industrial products 9.9 7.3 9.5 9.9

Non-conventional energy 20.1 17.1 15.3 10.4


4 9 2 0 6

5 0 2 1 7

5 8 2 8 1

6 1 5 7 9

6 6 6 6 9

7 1 1 4 52.1%

16.1%5.7%

8.3% 6.7%

0%

5%

10%

15%

20%

0

20000

40000

60000

80000

F Y 1 2

F Y 1 3

F Y 1 4

F Y 1 5

F Y 1 6 E

F Y 1 7 E

Operating Revenue (Rs in Mn)

Growth (%)

2 2 3 5

3 1

- 3 9 8

5 5 3

1 6 4 5

2 3 3 3

4.5

0.1

-0.7

0.9

2.5

3.3

-2

0

2

4

6

-500

500

1500

2500

F Y 1 2

F Y 1 3

F Y 1 4

F Y 1 5

F Y 1 6 E

F Y 1 7 E

PAT (Rs in Mn ) Growth (%)

8 1 5 5

7 2 5 3

7 7 0 0

7 8 7 5

8 8 2 9

9 7 7 2

16.6%

14.4% 13.2% 12.8%13.2%

13.7%

0%

5%

10%

15%

20%

0

5000

10000

F Y 1 2

F Y 1 3

F Y 1 4

F Y 1 5

F Y 1 6 E

F Y 1 7 E

EBITDA (Rs. Mn )

EBITDA Margins (%)



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Exhibit 12: RoE and RoCE (%)


Exhibit 13: Debtors and Collection Period


Exhibit 14: Return on Assets


Exhibit 15: Current Ratio


JISL’s RoE (Return on Equity) is modest because of high nance cost. Its

RoCE has always been strong and we expect that it will be stable in the

coming years.

Debtors are in line with the revenue but the collection period declined from

168 days in FY12 to 111 days in FY15.

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

JISL maintained current ratio at more than 1x indicating that the company

is meeting the current liabilities using its current assets.

2 2 7 1

2

2 1 1 2 9

1 8 7 7 0

1 8 7 6 8

2 0 5 0 5

2 1 9 0 4

168 154

118 111 111 111

0

50

100

150

200

0

10000

20000

30000

F Y 1 2

F Y 1 3

F Y 1 4

F Y 1 5

F Y 1 6 E

F Y 1 7 E

Average Debtors (Rs in Mn)

Collection period (in days)

3.0%

0.0%

-0.5%

0.7%

1.9%

2.7%

-1%

0%

1%

2%

3%

4%

F Y 1 2

F Y 1 3

F Y 1 4

F Y 1 5

F Y 1 6 E

F Y 1 7 E

Return on Assets

1.1

1.2

1.11.1

1.21.2

1.00

1.05

1.10

1.15

1.20

1.25

F Y 1 2

F Y 1 3

F Y 1 4

F Y 1 5

F Y 1 6 E

F Y 1 7 E

Current Ratio

23.6%17.3% 16.7%

15.0%17.1%

18.5%

12.7%

0.1% -1.8% 2.6%

7.1%9.3%

-5%

0%

5%

10%

15%

0%

5%

10%

15%

20%

25%

F Y 1 2

F Y 1 3

F Y 1 4

F Y 1 5

F Y 1 6 E

F Y 1 7 E

RoCE (%) RoE (%) (RHS)



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Exhibit 16: Working Capital Cycle


Exhibit 17: Debt Equity Ratio


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.

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.

176170

142 143152 151

120

140

160

180

200

F Y 1 2

F Y 1 3

F Y 1 4

F Y 1 5

F Y 1 6 E

F Y 1 7 E

Working capital cycle

2.0

1.6 1.7

1.8

1.71.5

1.0

1.5

2.0

2.5

F Y 1 2

F Y 1 3

F Y 1 4

F Y 1 5

F Y 1 6 E

F Y 1 7 E

Debt Equity Ratio

Exhibit 18: Company Snapshot (Ratings)

Low High

1 2 3 4 5

Quality of Earnings 3

Domestic Sales 3

Exports 3

Net Debt/Equity 3

Working Capital Requirement 3

Quality of Management 3

Depth of Management 3

Promoter 3

Corporate Governance 3 Source: Company, Karvy Research



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Sep 23, 2015


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 company’s 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


Exhibit 20: P/BV Band


0

20

40

60

80

100

120

Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15PE 5x 15x 30x 50x

Key Risks

y Withdrawal of subsidies: Withdrawal of subsidies for micro irrigation systems by Central and State Governments is a key

risk which could lead to JISL’s de-growth.

y Exposed to foreign currency uctuations: More than 45% of the revenue is from abroad. Volatility in currency may impact

export revenues as well as margins.

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.

0.0

0.5

1.0

1.5

2.0

2.5

3.0

0.0

50.0

100.0

150.0

200.0

Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15

1x 1.5x 2x 2.5x 3x P/BV (RHS)



10/1210

Sep 23, 2015


Financials

Exhibit 21: Income Statement


Revenues 50217 58281 61579 66669 71145

Growth (%) 2.1 16.1 5.7 8.3 6.7

Operating Expenses 42964 50582 53704 57840 61373

EBITDA 7253 7700 7875 8829 9772

Growth (%) (11.1) 6.2 2.3 12.1 10.7

Depreciation & Amortization 1696 2045 2441 2541 2691

Other Income 668 463 331 451 478

EBIT 6226 6117 5765 6739 7559

Interest Expenses 4855 4676 4692 4394 4232

PBT (after exceptional item) 125 (860) 310 2345 3327

Tax (80) 462 (239) (703) (998)

Adjusted PAT (After MI) 31 (398) 553 1645 2333

Growth (%) (98.6) + to - - to + 197.5 41.8


Exhibit 22: Balance Sheet


Cash & Cash Equivalents 2359 1968 3044 2770 2863

Sundry Debtors 19547 17994 19541 21469 22339Inventory 17231 18364 18566 19071 20148

Loans & Advances 5808 8818 7582 6926 6769

Investments 38 14 621 621 621

Net Block 24327 25579 25051 25036 25195

CWIP 749 807 526 1122 1208

Miscellaneous 8150 8500 8868 8752 8864

Total Assets 78208 82044 83799 85768 88007

Current Liabilities & Provisions 20393 21565 21382 22737 23965

Debt (LT + ST) 34170 36866 39358 38377 37477

Other Liabilities 1966 1654 1660 1455 1486Total Liabilities 56528 60084 62400 62569 62928

Shareholders Equity 1072 925 925 925 925

Reserves & Surplus 20608 20831 20474 22274 24154

Total Networth 21680 21755 21399 23199 25079

Minority Interest 0 205 0 0 0

Total Networth & Liabilities 78208 82044 83799 85768 88007




11/1211

Sep 23, 2015


Exhibit 23: Cash Flow Statement


PBT 125 (860) 310 2345 3327

Depreciation 1696 2045 2441 2541 2691

Interest 4855 4676 4693 4394 4232

Tax Paid (295) (41) (271) (561) (859)Changes in WC (3127) (1551) (868) (2380) (1381)

Other income and non cash item 1021 1461 307 486 296

Cash ow from operating activities 4275 5731 6613 6825 8307

Inc/dec in capital expenditure (3000) (3322) (2205) (1643) (3000)

Inc/dec in investments 356 (1) (10) - -

Others (773) 410 (73) 189 189

Cash ow from investing activities (3418) (2913) (2288) (1454) (2811)

Inc/dec in borrowings (586) 1216 1656 (982) (900)

Issuance of equity 3903 - - - -

Dividend paid (469) (265) (270) (270) (270)

Interest paid (4843) (4638) (4640) (4394) (4232)

Others 162 485 - - -

Cash ow from nancing activities (1832) (3202) (3254) (5646) (5402)

Net change in cash (974) (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 13.7EBIT Margin (%) 12.4 10.5 9.4 10.1 10.6

Net Prot Margin (%) 0.1 (0.7) 0.9 2.5 3.3

Dividend Payout ratio 714.3 (57.5) 41.3 14.1 9.9

Net Debt/Equity 1.6 1.7 1.8 1.7 1.5

RoE (%) 0.1 (1.8) 2.6 7.1 9.3

RoCE (%) 17.3 16.7 15.0 17.1 18.5


Exhibit 25: Valuation Parameters

YE Mar FY13 FY14 FY15 FY16E FY17E

EPS (Rs.) 0.1 (0.9) 1.2 3.6 5.0

DPS (Rs.) 0.5 0.5 0.5 0.5 0.5

BV (Rs.) 47.7 47.0 46.3 50.2 54.2

PE (x) NA NA NA 16.8 11.8

P/BV (x) 1.3 1.4 1.3 1.2 1.1

EV/EBITDA (x) 5.5 5.6 5.3 4.7 4.1

EV/Sales (x) 0.8 0.7 0.7 0.6 0.6

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



12/12

Sep 23, 2015


Stock Ratings Absolute Returns

Buy : > 15%

Hold : 5-15%

Sell :

JainIrrigation Karvy Sept24-2015

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