 Jain Irrigation eyes Rs 2,200 cr in topline this yrPublished on Tue, Sep 25, 2007 at 14:07 | Source : Moneycontrol.com Updated at Wed, Sep 26, 2007 at 10:34 18501 Investors following Jain Irrigation. Share this News with them.
The company is focussing on strong growth momentum in India for the next 3-6 months, he added.
Excerpts from CNBC-TV18's exclusive interview with Anil Jain: Q: Promoter holding currently stands at 29%. Is it a funding requirement for which the board is meeting or is it really the intention to increase promoter holding that you want to execute? A: It is a combination of both. The board met today morning and approved an additional issue of about 86 lakh warrants new warrants to the promoter, which could mean an additional fund inflow of approximately Rs 400 crore into the company over the next 18 months or so. That should take the promoter holding to close to about 39-40%. These funds would help the company deleverage its balance sheet. Our total debt to equity today is about 2.7 and long-term debt to equity is about 1.5. Post this infusion and additional cash flow generating for the company by 2009, we expect long-term debt to equity ratio to come down to 0.3. This would at that point in time allow us to have a balance sheet which we can use to go to the next level in terms of possible larger acquisitions in the water and agriculture space.
Q: Give us an idea of the key businesses that you have like micro irrigation, pipes, food processing essentially fruit pulp etc, and the plastic sheet business, which is going to be the key growth driver, and also the big margin business that you would have in your pack? A: Drip irrigation is the biggest margin business for us. It is growing at about 70% year to date and that growth rate can be maintained for some more time. For the entire year, we are definitely expecting it to grow in excess of about 70% with EBITDA margins in excess of 25%. Even other businesses like fruit pulp should grow by about 80% this year, on the back of very good demand for mango pulp, as people are going for more healthy juice alternatives and drinks. Our piping division, where we make plastic pipes for telecom, gas infrastructure etc, is also growing at about 80%. Overall, these three divisions would grow about 70% while a few others would grow slower.
Q: You are looking at a 40% growth in sales over the coming years. This 40%, if you were to break it up between organic and inorganic growth, how would you do that? A: If you look at organic growth for the current year itself, we should grow about 40-45%. The acquisitions that have been made recently, over the last 6-9 months, will come into play for the full year. For the current year, we will grow from about Rs 1,220 crore last year to about Rs 2,200 crore. Overall, topline growth would be about 70% for the current year.
Q: How many more acquisitions are you planning and can you share with us details on the geographic spread? A: In irrigation, we have done about three acquisitions which covers almost the entire world expect Africa and certain parts of West Asia. In food processing, it's a very wide range and area in terms of the types of fruits and the different types of products, which are required. There is nothing concrete on the horizon right now. We are in the process of actually integrating what we have done up to now. About 3-6 months down the line, we would be ready as a management and company to start looking at things again. We are focusing on strong organic growth in India because the momentum here is extraordinarily very good.
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