Dear All,
Forwarding you the Result Update on Jain Irrigation Systems for 4QFY2011 with a Neutral Recommendation.
For 4QFY2011, Jain Irrigation Systems (JISL) reported results in line with our expectations. Total revenue for the quarter grew by 27% yoy to `1,221cr, 12% ahead of our estimate. EBITDA margin came in at 18.9%, 100bp below our estimate. Adjusted PAT for the quarter grew by 15% to `103cr, 10% ahead of our estimate. However, rising raw-material prices are likely to impact demand, realisation and margin going forward. Hence, we remain Neutral on the stock.
Micro irrigation system (MIS) segment’s growth ahead of estimates: JISL’s 4QFY2011 results were in line our expectations. However, segment wise there were few surprises and disappointments. The MIS, PVC and PE pipes segments registered robust growth of 36%, 20% and 18%, respectively, during the quarter. The PVC sheet segment declined by 9% during the quarter, while the onions segment recorded mere 8% yoy growth during the quarter. EBITDA margin came in at 18.9 % on the back of higher raw-material prices. Reported PAT stood at `109cr. Adjusted for forex losses and one-time other income, PAT for the quarter grew by 15% yoy to `103cr (`89cr).
Outlook and valuation: Going ahead, we expect the MIS segment to register healthy growth of 20–25% yoy over the next two years, with the government continuing to focus on agriculture. However, EBITDA margins across the segments – MIS, PVC pipes and PE pipes – declined in FY2011 on account of higher raw-material prices; hence, we have revised our estimates downwards to factor in the same. At `181, the stock is trading near its fair valuations. Hence, we remain Neutral rating on the stock.
Kindly click on the following link to view the Report.
Jain Irrigation Systems - RU4QFY2011
If you have any further queries, feel free to call us on 022 39357600 Ext: 6864 ,6865 or mail us at advisory@angelbroking.com
With best regards,
Fundamental Advisory Desk
Angel Broking
Akruti Star,5th Floor, Road No.7,MIDC, Andheri (E),Mumbai – 93.
Call : (91) (022) 39357600, Ext: 6864, 6865
Website : www.angelbroking.com
Disclaimer: Ours is an advisory role. The final decision and consequences based on our information is solely yours. Moreover, in keeping with regulatory guidelines, we do not guarantee any returns on investments. Prospective investors and others are cautioned that any forward-looking statements are not predictions and may be subject to change without notice.
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