Jain Irrigation Systems Limited — Q3 FY26 earnings call

Call held 4 Feb 2026

Management summary

Jain Irrigation reported a strong Q3 FY26 with revenue growing 17.4% to approximately ₹1,600 crore, driven by broad-based growth across all segments and robust retail sales. While Q3 EBITDA margin saw a slight dip due to inventory loss in plastics and seasonality in agro-processing, 9M FY26 EBITDA grew 15%. The company is focused on retail expansion and working capital improvement, providing optimistic guidance for Q4 FY26 and FY27 with targets of 18-20% revenue growth and 14-14.5% EBITDA margin for FY27.

Highlights

  • Q3 FY26 Revenue grew 17.4% YoY to approximately ₹1,600 crore.

  • Retail sales showed robust growth of 24% in Q3 FY26.

  • 9M FY26 Revenue grew 13.5%, and EBITDA grew 15% to ₹569 crore.

  • Q3 FY26 EBITDA margin was 10.5%, down from 12.9% YoY, impacted by inventory loss and seasonality.

  • Working capital cycle improved by 15 days, from 196 days to 181 days.

  • Targeting 18-20% revenue growth for Q4 FY26 and 15%+ for full FY26.

  • Projected FY27 revenue growth of 18-20% and EBITDA margin of 14-14.5%.

  • Expects ₹125 crore reduction in government project receivables in Q4 FY26 and ₹350-400 crore in FY27.

Concerns

  • Slow recovery of government project receivables

Key financials

3 periods

Headline

  • Net Working Capital Cycle
    181 days

Q3 FY26

  • Revenue
    ₹1,600 Cr
    YoY +17.4%
  • EBITDA
    ₹168 Cr
    YoY -4%
  • EBITDA Margin
    10.5%
  • Adjusted PAT
    ₹16 Cr

9M FY26

  • Revenue Growth
    —
    YoY +13.5%
  • EBITDA
    ₹569 Cr
    YoY +15%
  • EBITDA Margin
    12.4%
  • Adjusted PAT
    ₹81 Cr

What they filed

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

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,192 1,361 1,749 1,546 1,432 +20%1,598 +17%1,824 +4%1,508 −2%
EBITDA139 176 223 201 198 +42%166 −6%236 +6%164 −18%
Net profit-13 -1 28 11 15 +215%-47 −4600%-19 −168%-18 −264%
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

Share of Revenue (Q3 FY26)
₹1,596 Cr Total
  • Hi-Tech Business (Drip Irrigation & Tissue Culture) ₹625 Cr 39.2%
  • Agro Processing (Fruits, Vegetables, Spices) ₹509 Cr 31.9%
  • Plastic Business (Pipes & Plastic Sheet) ₹462 Cr 28.9%

Guidance & targets

Revenue

  • Overall Revenue Growth Revenue · FY26 · High confidence 15%+
    For first nine months, including December quarter, revenue growth for the company is about 13.5%. And in the current quarter, we will definitely grow more than 15%. So, we think we should then average it out around 15% growth for the whole year as was projected and discussed by us earlier in terms of what is our goal.

    — Anil Jain, CEO & MD

  • Overall Revenue Growth Revenue · Q4 FY26 · High confidence 18-20%
    I think the fourth quarter will have to be about 18% to 20% overall revenue growth for us to average out around 15% for the whole year.

    — Anil Jain, CEO & MD

  • Overall Revenue Growth Revenue · FY27 · High confidence 18-20%

    Previously 15-17% → 18-20%

    But internally, we are working to be more ambitious and while current year our targets have been around 15% plus, next year, the idea would be closer to 18% to 20% rather than 15% to 17% in terms of revenue and earning growth.

    — Anil Jain, CEO & MD

Profitability

  • EBITDA Growth Profitability · FY26 · High confidence Higher than 15%
    EBITDA is already at 15% for the first nine months and fourth quarter being a stronger quarter, we should be able to do better overall in revenue and earnings with better absorption of fixed cost, better product mix, more profitable products being sold in the quarter.

    — Anil Jain, CEO & MD

Margin

  • EBITDA Margin Margin · FY26 · High confidence 13%+
    So, overall, I think, we are targeting for the current year EBITDA margin should be 13% plus for the whole year.

    — Anil Jain, CEO & MD

  • EBITDA Margin Margin · FY27 · High confidence 14-14.5%

    Previously 13% → 14-14.5%

    I think the idea would be to improve the margin next year from 13. The idea was that as we, I talked about, right, that this year revenue is growing 15%, and next year we would like to grow 18% plus. So, as we move that to 18% growth in revenue, I think the earnings from 13% should move at least to 14% or 14.5%.

    — Anil Jain, CEO & MD

Debt

  • Government Project Receivables Reduction Debt · Q4 FY26 · High confidence ₹125 crores
    I mean, in current quarter, fourth quarter, I think we are expecting a lot reduction to the tune of about Rs. 125 crores or so from government projects alone on net basis.

    — Anil Jain, CEO & MD

  • Government Project Receivables Reduction Debt · FY27 · High confidence ₹350-400 crores
    But next fiscal year, I think the reduction should be close to Rs. 350 crores to Rs. 400 crores due to the government projects.

    — Anil Jain, CEO & MD

  • Term Loan Repayment (Jain Irrigation) Debt · current year · High confidence ₹60 crores
    So, in fact, in the same presentation, investor presentation, you see that out of the term loan at Jain Irrigation level, which were right now outstanding is only Rs. 60 crores. So, that should get paid in the current year.

    — Anil Jain, CEO & MD

Business Mix

  • Government Business Revenue Contribution Business Mix · FY26 · High confidence 3-3.5%

    Previously 15-20% → 3-3.5%

    I think, let's say, current year, out of overall, when we think of overall business of the company, Rs. 6,500-7,000 crore, already the government project business this year itself would be only about 3%-3.5%.

    — Anil Jain, CEO & MD

  • Government Business Revenue Contribution Business Mix · FY27 · High confidence <1%

    Previously 3-3.5% → <1%

    So, next year maybe it is, when you look at the whole company, the government would be may be less than 1% or so.

    — Anil Jain, CEO & MD

Capacity

  • Beverage Unit Lines Operational Capacity · by March 31st · High confidence 2 lines
    So, by this March, I think, we will have full two lines operating, and these are large lines, right?

    — Anil Jain, CEO & MD

  • Beverage Unit Additional Lines Capacity · over next one year · Medium confidence 3 lines
    there would be additional three more lines, which will be there.

    — Anil Jain, CEO & MD

Risks & concerns

  • Slow recovery of government project receivables

    high

    Large amounts are still due from four states (Karnataka, Maharashtra, MP, Rajasthan), and the pace of recovery is not ideal, though significant reductions are expected in Q4 FY26 and FY27.

    Management acknowledged

  • Seasonality impacting Agro Processing earnings

    medium

    Erratic weather led to limited availability of raw materials (onions, bananas), impacting fixed cost absorption and Q3 earnings in Agro Processing.

    Management acknowledged

  • Raw material price volatility (resin prices)

    medium

    Falling resin prices in Q3 impacted inventory values in the plastic business, though prices have started to inch up in January.

    Management acknowledged

  • Lower export business in Q3 FY26

    medium

    Exports were lower by 34% YoY in Q3, though management expects them to come back strongly.

    Management acknowledged

  • Uncertainty regarding US tariff changes

    medium

    Recent FTA signings are positive, but specific clarity on US tariff changes impacting plastic sheets is still awaited from the government.

    Management acknowledged

Areas of evasion (1)

  • Specific timeline for Food IPO

Q&A highlights

2 direct
Food division IPO and JV structures Partial
In terms of your first question related to the public IPO of the food business, I think we were working with the investment bankers about the likely approach to the market. And I think, when we talk sometimes in March, post March results, we should be able to give you ample clarity in terms of precise how exactly it is moving forward.

Analyst sought clarity on the timeline and structure of the Food business IPO and JVs, which is a key value monetization event. Management provided a timeline for clarity (post-March results) rather than a firm date for the IPO itself, and clarified JV structures.

Asked by Praneeth

Plastic division EBITDA degrowth Direct
So, loss of about 20% in absolute amounts and percentage-wise it came down from 10.8% to 7.2% in this particular quarter. And about half of that I will attribute towards loss of inventory and half of that with less volume growth which should have taken place because season it will start, but up to November it was raining. So, season did not really start.

Analyst questioned the significant EBITDA decline in the Plastic segment. Management provided a clear breakdown of the causes (inventory loss from falling resin prices and lower volume due to extended rains), indicating specific operational challenges.

Asked by Praneeth

Repayment of unsustainable debt and fallback plans Direct
I think our budget is showing us that there should be surplus next year after payment of the about Rs. 200 crores to Rs. 300 crores. That is one. Second, about the land parcel, so we have some land in southern India which we are already working along with the banks to get additional funds in place.

Analyst pressed on the strategy for repaying the substantial Rs. 688 crore unsustainable debt due next year, especially given legacy receivable issues. Management outlined reliance on internal accruals and potential asset monetization (land parcels), which is crucial for assessing financial stability.

Asked by Parag Khare

3 min read 6 chapters

Detailed narrative

Robust Q3 FY26 Revenue Performance

Jain Irrigation Systems Ltd. delivered a strong Q3 FY26, with revenue growing 17.4% year-on-year to approximately ₹1,600 crore. This growth was broad-based, with the Hi-Tech business (drip irrigation and tissue culture) expanding 16% to ₹625 crore, the Plastic business (pipes and plastic sheets) growing 18% to ₹462 crore, and Agro Processing (fruits, vegetables, and spices) increasing 18.5% to ₹509 crore. A key highlight was the 24% growth in retail sales, indicating a successful strategic shift towards this segment.

EBITDA Margins Impacted by Q3 Specifics, Strong 9M Performance

While Q3 FY26 EBITDA margin stood at 10.5%, a decline from 12.9% in the prior year, the absolute EBITDA was ₹168 crore, down 4% YoY. This dip was primarily attributed to inventory losses in the plastic business due to lower resin prices and seasonality issues affecting fixed cost absorption in the Agro Processing division. Despite the Q3 pressure, the nine-month FY26 period saw EBITDA grow 15% to ₹569 crore, with an average consolidated EBITDA margin of 12.4%, demonstrating overall healthy profitability.

Improved Working Capital and Debt Management

The company showcased improved working capital efficiency, reducing its net working capital cycle by 15 days from 196 days to 181 days. This improvement was supported by a ₹100 crore reduction in inventory at the standalone India level. On the debt front, Jain Irrigation has repaid over ₹1,300 crore since its restructuring. Management anticipates a significant reduction in government project receivables, targeting ₹125 crore in Q4 FY26 and ₹350-400 crore in FY27, which is crucial for addressing the remaining ₹688 crore unsustainable debt due next year.

Expansion in Food Processing and Beverage Units

Jain Irrigation is actively expanding its food processing capabilities. The beverage unit, part of Jain Farm Fresh, is set to begin commercial production in February 2026, with two full lines operational by March 31, 2026. Phase-2 plans include an additional three lines within the next year. Furthermore, the company recently entered a 51-49 joint venture with a Japanese firm for tomato processing, with revenue generation expected to commence in January 2027. These initiatives are poised to contribute substantially to future revenue growth.

Optimistic Outlook and FY27 Growth Targets

Management expressed a bullish outlook, targeting an 18-20% overall revenue growth for Q4 FY26, which would lead to a 15%+ revenue growth for the full FY26. For FY27, the company aims for an even more ambitious 18-20% revenue growth and an EBITDA margin improvement to 14-14.5%. This growth is expected to be fueled by continued retail market penetration, new business from the beverage unit, and a recovery in export markets, potentially aided by recent FTA signings with the EU and US.

Strategic Shift Away from Government Projects

Jain Irrigation is strategically de-risking its business by significantly reducing its reliance on government projects. The contribution of government project business to overall revenue is expected to decrease from 15-20% historically to only 3-3.5% in FY26, with a further reduction to less than 1% in FY27. This shift towards retail sales and private sector engagement is intended to improve cash flow predictability and reduce the working capital intensity associated with long-cycle government projects.

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