Concall AI

Jain Irrigation Systems Limited — Q1 FY26 earnings call

Call held 26 Jul 2025

Management summary

Jain Irrigation reported a Q1 FY26 revenue of approximately ₹1,550 crores, marking a 5% year-on-year growth amidst a challenging deflationary environment. The company achieved a 1 percentage point improvement in overall EBITDA margin, driven by strong performance in Hi-Tech Agri (30% growth, 16.6% EBITDA margin) and exports (40% growth). While the plastics segment faced a 10% decline, management expressed confidence in a strong H2, continued debt reduction, and long-term growth, with EPS improvement anticipated from FY27.

Highlights

Revenue of ₹1,550 crores, up 5% YoY, despite deflationary environment.
Overall EBITDA margin improved by 1 percentage point, with Hi-Tech Agri segment's EBITDA margin increasing from 15.2% to 16.6%.
Hi-Tech Agri segment showed strong growth, closer to 30%.
Exports continued to perform well, growing 40% from ₹88 crores to ₹130 crores.
Solar pump sales crossed ₹50 crores in the current quarter, a substantial increase from less than ₹2 crores in the same period last year.
Almost 50% of the incremental receivables from the June quarter were recovered in July.

Concerns

Plastic division revenue declined by approximately 10% due to deflation and early monsoon affecting domestic demand.
Overall Q1 revenue growth was limited to 5% due to the deflationary environment and early monsoon.
Working capital (receivables and inventory) saw a substantial increase in the June quarter.
EPS has been stagnant, with measurable improvement expected only from FY27 onwards.

Key financials

2 periods

Headline

Revenue
₹1,550 Cr
YoY +5%
Gross Debt
₹3,590 Cr
Overall EBITDA Margin Improvement
1%

Q1

Capex
₹44 Cr
Depreciation
₹68 Cr

What they filed

Q1 FY27: revenue down 2.5%, net profit down 263.6% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	1,192	1,361	1,749	1,546	1,432 +20%	1,598 +17%	1,824 +4%	1,508 −2%
Expenses	1,053	1,185	1,525	1,345	1,234	1,432	1,588	1,344
EBITDA	139	176	223	201	198 +42%	166 −6%	236 +6%	164 −18%
Margin	12%	13%	13%	13%	14%	10%	13%	11%
Other income	12	2	1	2	6	-34	-16	10
Interest	105	113	111	114	116	112	117	111
Depreciation	62	63	67	68	70	69	74	74
Profit before tax	-17	1	46	21	18 +206%	-49 −5000%	30 −35%	-10 −148%
Tax rate	-21%	185%	40%	47%	14%	-3%	164%	83%
Net profit	-13	-1	28	11	15 +215%	-47 −4600%	-19 −168%	-18 −264%
EPS	-0.15	0.01	0.43	0.19	0.21	-0.59	-0.17	-0.21

How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Hi-Tech Agri
30% Growth16.6% EBITDA Margin
Plastic
-10% Revenue Decline
Exports
₹130 Cr Revenue
Solar Pumps
₹50 Cr Sales
East (New Dealers)
63% Growth
Northeast (New Dealers)
2% Growth

Order book

medium confidence

Total value

₹750 Cr

as of 2025-06-30 quantified

Execution

Higher receivables due to closing one large project this quarter, expected to be received over another two quarters or so. Most overdue funds from projects expected between now and next September.

The company closed one large project this quarter, leading to high project revenue and increased receivables, which are expected to be recovered over the next few quarters.

Source: Prepared remarks

Capital allocation

high confidence

Capex ₹44 Cr
- Maintenance capex
- Growth capex for tissue culture planting material division and urban piping scenario
this quarter, capex overall maintenance plus growth capex was about INR44 crores, while depreciation was INR68 crores. For the rest of the year, maintenance capex would be in line with what we have done in earlier years. And we'll be doing some growth capex as well especially we are seeing a lot of demand for medium term from the tissue culture planting material division for the urban piping scenario. But we still believe that overall capex would still remain in line with the overall depreciation for the company.
Debt Gross ₹3,590 Cr · 3.5× EBITDA Maturity: Term debt of ₹1,500 crores (₹800 crores at 0%, ₹700 crores at 9-10%) almost zero by March '28.
- Repayment Repayment of long-term debt due in the remainder 9 months through internal accruals. ₹250 Cr
- Repayment Will pay down 0% NCDs once overdue project receivables are received.
Gross debt has remained almost same at INR3,590 crores, while net debt has gone up slightly as extra usage of cash has gone into working capital... Out of this INR3,500 crores debt, the long-term debt or term debt is close to INR1,500 crores. Now -- sorry, about INR1,500 crores. Now that INR1,500 crores has about INR800 crores debt at 0%, right? So remaining INR700 crores debt is at, let's say, average 9% to 10%. And that is being repaid as we speak in the next 9 months alone, INR250 crores of that debt is due, which we'll be paying... At one time, it was 6. I think it is down to 3.5 now. The idea is very soon in next 18 bring it to less than 2.
Liquidity Liquidity disclosed Equity infusion of ₹150 crores from warrants used for working capital. Almost 50% of incremental receivables from June quarter recovered in July.

This was also a quarter where we got the funds coming in towards the equity for the warrants, which we had issued earlier, almost to the tune of INR150 crores and that has gone into building of the working capital... Already in month of July, almost 50% of increment in the receivable, which we had in the June quarter has been recovered in last four weeks.

Guidance & targets

Revenue

Overall Revenue Growth Revenue · FY26 · Medium confidence >15%

we said for the whole year, we are anticipating to manage growth North of 15% in terms of revenue.

— Anil Jain

Business Size

Business Doubling Business Size · next 3-4 years · Medium confidence 2x

you can definitely double the size of the business. If you look at 5 years, you have a chance to make it 2.5, 3x.

— Anil Jain
Business Growth Business Size · next 5 years · Medium confidence 2.5-3x

If you look at 5 years, you have a chance to make it 2.5, 3x.

— Anil Jain

Segment Growth

Piping Segment Growth Segment Growth · Medium confidence 15-17%

we see piping segment to grow quite a lot, maintain 15%, 17% growth.

— Anil Jain
Irrigation Segment Growth Segment Growth · Medium confidence 12-14%

Definitely. We see irrigation to also maintain a 12% to 14% growth based on a combination of exports and new value-added applications.

— Anil Jain
Overseas Plastic Sheet Business Growth Segment Growth · Medium confidence 8-10%

We expect plastic sheet business, which is overseas to continue to grow at 8% to 10%.

— Anil Jain
Solar Pump Business Growth Segment Growth · next 2-3 years · Medium confidence substantially

We think that business could grow substantially over the next 2 to 3 years because the opportunity is quite large under the KUSUM Yojana of the Government of India.

— Anil Jain

EBITDA Margin

Overall EBITDA Margin EBITDA Margin · going forward · Medium confidence 14%

From 13% today

I think 13%, we must achieve definitely any year. But I think we would be inching towards 14% going forward.

— Anil Jain
Food Processing EBITDA Margin EBITDA Margin · Medium confidence 12-13%

globally speaking, all food processing companies are at about 12% to 13%. I think that's what would be maintained in that business.

— Anil Jain
Plastics EBITDA Margin EBITDA Margin · Medium confidence 12-14%

From 8-10% today

In plastics, we have been between 8% and 10% historically. But as we utilize better production capacities, higher growth rate, I think we can hit 12% to 14% window there.

— Anil Jain
Hi-Tech EBITDA Margin EBITDA Margin · High confidence 15-17%

And Hi-Tech, I think we would maintain this 15% to 17%. In an extraordinary year, it could go to 18%, 20%, but I think 15% to 17% would be.

— Anil Jain

Debt

Term Debt Reduction Debt · March '28 · High confidence zero

From ₹1,500 crores today

So on the term debt, the debt, I think as it stands, the entire INR1,500 crores, almost by March '28, almost become zero in normal course through internal accruals.

— Anil Jain
Net Debt to EBITDA Ratio Debt · next 18 months · High confidence <2

From 3.5 today

At one time, it was 6. I think it is down to 3.5 now. The idea is very soon in next 18 bring it to less than 2.

— Anil Jain

Receivables

Overdue Project Receivables Recovery Receivables · mid-'26 · Medium confidence ₹500-700 crores

I think what guidance we have given earlier also that by mid-'26, we should receive most of old government receivables, and that is INR500 crores to INR700 crores.

— Anil Jain

Project Receivables

Project Amount Recovery Project Receivables · before March '26 · High confidence ₹350 crores

I think overall amount on the project side is about INR750 crores approximately. And out of that, I think about at least INR350 crores should happen before March '26.

— Anil Jain

Sales Contribution

East, Northeast, North Sales Contribution Sales Contribution · next 3 years · Medium confidence 15-20%

From 5% today

in next 3 years, for example, the East, Northeast, and North, which is hardly 5% of our sales in past would become at least 15% to 20%.

— Anil Jain

Sales

Tissue Culture Sales Sales · next 3-5 years · Medium confidence ₹1,000 crores

So we can we are still on the track of reaching 1,000 in the next 3 to 5 years.

— Anil Jain

What to watch in Q2 FY26

Working Capital Improvement

Up to March '26 (check Q2 progress)

Current Substantial increase in receivables and inventory in June quarter, 50% recovered in July.

Target Continued improvement in DSOs and days outstanding for inventory and receivables.

Why it matters

Crucial for cash flow generation and reducing net debt, directly impacting the company's financial health.

For the medium term, that is up to March '26, we expect to maintain the trend of continued improvement on working capital in terms of DSOs, days outstanding against sales for both inventory as well as receivables, even though in short term in the current quarter they have gone up.

Risks & concerns

EPS Stagnation and Shareholder Value
high

Analyst raised concerns about stagnant EPS and past equity dilution, impacting existing investors, with management promising improvement from FY27.

Analyst acknowledged
Deflationary Environment
medium

Lower resin prices and lowest food prices (onion, mango) in years impacted Q1 revenue growth to 5%.

Management acknowledged
Increased Working Capital
medium

Substantial increase in receivables and inventory in the June quarter, though 50% of incremental receivables recovered in July.

Management acknowledged
State Government Delays in Project Payments
medium

Some state governments delay payments for sanctioned projects, impacting the recovery of ₹750 crores in project receivables.

Management acknowledged
Early Monsoon Impact on Demand
low

Early monsoon starting mid-May hit domestic plastic piping demand, contributing to a 10% decline in the plastic division.

Management acknowledged
Bio-product Vulnerability (Tissue Culture)
low

As a bio-product, tissue culture is susceptible to diseases and climate change, posing potential hurdles to growth.

Management acknowledged

Q&A highlights

7 direct

Long-term Revenue and EBITDA Targets Direct

you can definitely double the size of the business. If you look at 5 years, you have a chance to make it 2.5, 3x... I think 13%, we must achieve definitely any year. But I think we would be inching towards 14% going forward.

Management provided clear long-term growth aspirations (doubling business in 3-4 years) and specific EBITDA margin targets for overall business and segments, offering insight into strategic direction.

Asked by Nigel Mascarenhas

Value Monetization and EPS Growth Direct

I think we have recently started working seriously on food processing company, which is a subsidiary. And depending on, again, preparation, the market underlying performance, sometimes in '26, there is a good possibility that you would see value monetization of that business... measurable improvement in EPS because that's the ultimate goal.

Analyst challenged the lack of EPS growth and delay in value monetization. Management committed to pursuing value monetization for the food processing subsidiary in 2026 and promised EPS improvement from FY27, addressing a key shareholder concern.

Asked by Hemal Trivedi

Equity Infusion and Debt Repayment Strategy Direct

So the current infusion which happened, almost, I think, out of INR150 crores, 1/3 came from promoters and the remainder came from the institutions... So on the term debt, the debt, I think as it stands, the entire INR1,500 crores, almost by March '28, almost become zero in normal course through internal accruals.

Management clarified the source and use of recent equity infusion and provided a detailed roadmap for debt reduction, including specific amounts and timelines for term debt repayment and the role of value monetization.

Asked by Amit Agicha

Dealer Network Expansion and New Business Model Direct

we have kind of weeded out a lot of inefficient dealers and more focused on efficient dealers. And some of the inefficient dealers, we have gone -- we have got the new dealers in the existing areas... in next 3 years, for example, the East, Northeast, and North, which is hardly 5% of our sales in past would become at least 15% to 20%.

Management explained the strategy for expanding market reach by optimizing the dealer network and targeting new regions, highlighting operational changes and growth potential in previously underserved areas.

Asked by Praneet

Tissue Culture Segment Growth and Risks Direct

So we can we are still on the track of reaching 1,000 in the next 3 to 5 years... But it's a bio product. It's a tech product. And in the open area with the climate change, there could be things like diseases, which will come on to the product.

Management provided specific sales targets for the high-margin tissue culture segment and acknowledged inherent risks associated with bio-products and climate change, offering a balanced view of growth drivers and challenges.

Asked by Praneet

Government Receivables Status Direct

I think overall amount on the project side is about INR750 crores approximately. And out of that, I think about at least INR350 crores should happen before March '26.

Analyst pressed for an update on overdue government receivables. Management provided a quantified outstanding amount and a timeline for recovery, which is critical for assessing the company's liquidity and working capital management.

Asked by Madhur Rathi

Unallocated Assets on Balance Sheet Partial

Yes, I think that's a good question. But as a company, right, for the R&D, which we do and so on, we have a large amount of land between what we have here in Maharashtra or in Tamil Nadu, et cetera. And the total land goes into thousands of hectares... We will study this matter, right? We'll talk to the auditors.

Analyst questioned the significant amount of unallocated assets and its impact on segment profitability. Management explained the nature of these assets (primarily land, corporate investments) and committed to studying better allocation, indicating a potential for improved transparency.

Asked by Prashant

Concerns over Equity Dilution and Shareholder Returns Direct

I agree with your sentiment and not only agree with it, I empathize with the sentiment. We do not wish to do raising equity for the sake of equity... If equity is required, I think that would be in the interest of all the shareholders because rather than just staying in currently like this, we give it a shot because underlying strength company possesses in the marketplace are really very good.

Analyst expressed strong concerns about past equity dilution and its impact on long-term investors. Management empathized and assured that future equity raises would only be pursued if 'extremely value accretive' and in the best interest of shareholders, aiming to rebuild investor trust.

Asked by Hemal Trivedi

3 min read 6 chapters

Detailed narrative

Q1 FY26 Performance Overview Amidst Deflation

Jain Irrigation reported a Q1 FY26 revenue of approximately ₹1,550 crores, reflecting a 5% year-on-year growth. This growth was achieved despite a challenging deflationary environment, characterized by lower resin prices and the lowest onion/mango prices in years. The company successfully improved its overall EBITDA margin by 1 percentage point, demonstrating resilience in profitability. However, the plastics division experienced a 10% decline in revenue, primarily due to the deflationary pressures and reduced domestic demand caused by an early monsoon.

Segmental Highlights and Growth Drivers

The Hi-Tech Agri segment was a key growth driver, achieving nearly 30% growth and improving its EBITDA margin from 15.2% to 16.6%. This was supported by strong performance in drip irrigation and a significant surge in solar pump sales, which crossed ₹50 crores in Q1 FY26, compared to less than ₹2 crores in the prior year. Exports also contributed positively, growing 40% from ₹88 crores to ₹130 crores. While the food processing segment remained stable, management anticipates a strong second half of FY26, targeting over 15% revenue growth for the full fiscal year.

Debt Management and Capital Structure Initiatives

The company's gross debt remained stable at ₹3,590 crores, though net debt slightly increased due to working capital requirements. Long-term debt stands at ₹1,500 crores, with ₹800 crores being interest-free and the remaining ₹700 crores carrying an average interest rate of 9-10%. Jain Irrigation plans to repay ₹250 crores of long-term debt within the next nine months through internal accruals. A key target is to reduce the Net Debt to EBITDA ratio from the current 3.5 to below 2 within the next 18 months, with full term debt elimination aimed for by March 2028, potentially accelerated by value monetization.

Working Capital and Receivables Management

The June quarter saw a substantial increase in both receivables and inventory, impacting working capital. However, management reported a positive development in July, with almost 50% of the incremental receivables from the June quarter already recovered. The company expects continued improvement in working capital metrics, including Days Sales Outstanding (DSOs), through March 2026. Approximately ₹750 crores in project-related receivables are outstanding, with ₹350 crores expected to be realized before March 2026 and the majority of overdue funds by September 2026, despite some delays from state governments.

Strategic Market Expansion and New Opportunities

Jain Irrigation is actively expanding its market reach by optimizing its dealer network, replacing inefficient dealers with new ones, particularly in Northern, Eastern, and Northeastern India. These new regions, currently contributing 5% to sales, are targeted to reach 15-20% within the next three years, with some areas already showing 63% to 200% growth. The company is also exploring new irrigation opportunities in compressed biogas production and expanding its tissue culture business, aiming for ₹1,000 crores in sales within 3-5 years, alongside urban piping initiatives.

Shareholder Value and EPS Outlook

Addressing shareholder concerns regarding past EPS stagnation and equity dilution, management emphasized its commitment to creating shareholder value. The company is actively working on the value monetization of its food processing subsidiary, with a potential realization in 2026. While acknowledging the challenges of the past five years, management assured that any future equity raises would only be pursued if 'extremely value accretive' and that measurable EPS improvement is anticipated from FY27 onwards, following the resolution of balance sheet issues and leveraging projected 'super growth'.

This is an AI-generated summary of a publicly available earnings call transcript.

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