June 02, 2016 / 17:33 IST
Motilal Oswal research report on Jain Irrigation
Jain Irrigation (JI) reported overall revenue of INR 20.1b (vs. our estimate of INR 22b), marking a de-growth of 1.6% YoY. EBITDA stood at INR 2.9b (vs. our estimate of INR 3.1b) in 4QFY16, with EBITDA margin coming in at 14.3% (vs. our estimate of 14.2%), up 60bp YoY. Consequently, adjusted PAT for the quarter stood at INR 884m (vs. our estimate of INR 1,080m), as against INR 1,029m in 4QFY15.
In view of anticipation of a better monsoon and the Maharashtra government’s thrust on irrigation, we expect the MIS business to bounce back. Overall, we estimate 14% revenue CAGR and 19% EBITDA CAGR over FY16-18, translating into PAT CAGR of 93% to INR 3.8 in FY18, mainly to factor in the lower interest outgo. We maintain Buy with a target price of INR 76, based on 10x FY18E EPS (rolled over to FY18).
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