Buy Jain Irrigation; target of Rs 120: Edelweiss

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26 Aug, 2025 12:21

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Edelweiss' report on Jain Irrigation Systems (JISL)"JISL reported another good quarter, with Q1FY16 sales coming broadly in line with estimates. However, superior margins led to better than expected EBITDA and PAT. Net debt remained stable QoQ. Key positives were: 1) domestic sales grew 11.7% YoY; 2) domestic MIS and piping sales grew 9.6% and 21.9% YoY, respectively; 3) 360bps YoY surge in gross margin primarily owing to soft raw material prices; and 4) drop in receivables by 9 days YoY. Key negatives were: 1) food processing sales fell 3.1% YoY on high base; and 2) subdued revenue in export/overseas business. JISL guided for double-digit YoY consolidated revenue growth in FY16. It is also targeting to further reduce debt by INR3bn in H2FY16. Minority stake sale in food processing business is likely in FY16, which will further lower debt. In view of the immense untapped opportunity, increased focus by the government on MIS and JISL being a market leader, we anticipate its domestic MIS business to sustain strong growth, going forward. Nonetheless, debt reduction remains a key monitorable. Maintain buy with a target price of Rs 120", says Edelweiss research report. For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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