Jain Irrigation Systems Limited (JISLDVREQS) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to JAN Irrigation Systems Q4 and FI26 earning conference call hosted by D.R. Choksi Finsov Private Limited. As a reminder, all participant line will win the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mahir Mani. Thank you, and over to you.

Thank you, Danish. Good evening, everyone, and welcome to Jain Irrigation System Limited earnings call to discuss the Q4 FY26 results. Today, we have on call Mr. Aniljan, CEO and MD, and Mr. Bipin Vallameh, CFO. We must remind you that the discussion on today's call may include certain forward-looking statements that may involve known and unknown risks, uncertainties, and other factors, and must therefore be viewed in conjunction with the risks that the company faces. Future results, performance, or achievements may differ significantly from what is expressed and implied by such forward-looking statements. Please note the results and presentation are available on the Exchange and the company's website. Now, I request Mr. Anil Jain to take us through the company's business outlook and financial highlights, subsequent to which we will open the floor for questions. Thank you, and over to you, sir.

We have circulated the results. We are able to manage approximately a revenue of about 1,800 crore this quarter. As again, same period last year at about 1750, so registering about a nom- Within that, the high-tech business, which primarily means repairing. about eight percent. There is a small amount of degrowth in plastic business because of Because of very high prices of raw materials in month of March. And agro-processing also did about 6% growth. In terms of overall EBITDA, EBITDA grew about 7%, so revenue grew 4%, EBITDA grew about 7%. Within high-tech, EBITDA had a really good growth at about 22% compared to the same period last year. The plastics grew also 3.3%, but agro-processing had a negative EBITDA growth for this quarter. Well, for the whole year, We have been able to improve the margin. Overall margin came at 13.2% as against 12.8% across all the divisions. Within individual businesses, high-tech came out at 19.8% as against last year's same period, 17.5%. So that's a substantial improvement. Even plastic was a little bit higher at 10.2 versus 9.7. In that context and background, we have been able to hold our margins, even though revenue growth was lower than what we were expecting or we were anticipating. If I look at the whole year now that, you know, we are aggregating all the four quarters, revenue has grown for about 11% for the whole year. That includes, you know, the console business, that is, the business in India, the food business, the overseas plastic business all put together. But within that 11%, you would see that the high-tech business grew more than 20%. Thank you. That has been really heartening to see that the business, which is most profitable, you know, grew at the best rate. The plastics grew only at 2.4, and the food managed to cross 2,000 crore revenue by growing 9%. So, again, overall positive revenue growth, and especially in high-tech, it was 20%. So, that August was... In terms of EBITDA, while revenue growth for high-tech was about 20%, EBITDA for the whole year grew to 26%. We had a negative growth in plastics EBITDA because revenue also did not grow. And food managed about 9% growth in EBITDA compared to the last year's same period in line with the revenue growth. at the kind of There are many challenges in our European and US business. Those are being addressed. We will not remain so. Particularly in terms of the market, what we have seen that the pricing shocks which we saw in March were some of our polymer, you know. So, piping business and linear low-density quality. And we saw that... For about 20 days. And on polyethylene side, it was in fact 60% increase. And so that was a kind of a shock to the system. This was unprecedented. Not seen anything like that even during COVID period. And in fact, over the last 40 years, this was in such a short period, such an amount of increase which took place. And since then, you know, if I talk about... Thank you. We have seen, since these prices have come down, you know, we have seen demand for PVC pipe already come back. The market, customers decide to postpone. And, but PVC has come back, and we expect that over next few months, as this is expected also to be. We have a stronger demand for water management products from farmers. So we expect next few months to be better, unless there is another big price shock, which one cannot predict and one is not aware. But as things stand, I think what we saw the worst between, you know, first three weeks of March and through April, things have stabilized and business is coming back to normal. So the second half of this quarter...

Thank you, sir, for your presentation. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

Our first question come from the line of Praneet from Samatwa Investments.

Please go ahead.

Hi, Hair Management. Thank you for the opportunity. So, we just wanted to understand in terms of the debt treatment. I understand that you mentioned with cash flow may be able to service it. But if you see a standalone business where most of our entities are, we don't have that much of cash flow. So, could you explain how are you planning on servicing the debt especially? In previously, the management has indicated that you might restructure some portion of it and there might be a fundraise. There were many options given, but it was always vague on how are we planning on specifically paying this liability. So, could the management explain what's the strategy now, whether there will be restructuring of debt or what is going to go?

Yeah, I think that's a good question. And even the last year, I think, in 25, 26, we generated net cash from operations, about 350 crore, post-working capital exchange. And part of what, the increase in the, you know, receivables, et cetera. The receivables, in fact, should go down. I'm expecting the 350 crore. If things are delayed on the government projects, the backup options are always available about refinancing, backup options about raising of the equity, etc. Those are available, you know, but we feel fairly confident that we should be able to do it through the internal backwards, and I would like to state that, look, between 23 and 26. 1,300 crores. And it became possible. So companies are stronger today than, let's say, it was three or four years ago. And this scenario of what has happened in March and April necessitates some of the additional backup one must do because, you know, things are uncertain. And we are exploring those, and I think… We should have more clarity on that. We have necessary where we talk to each other.

Understood, sir, but like we have always had like many of these backup options in terms of asset sales and government receivables and all of that in the past also to prepay or whatever it is. But we have not, most of them didn't work out. So how fairly confident are you in terms of getting the government receivables? Let it be the benefit or the budget receivables. And like in terms of everything got delayed. I understand the management is doing everything from their behalf. But it is and it's not very far apart. It's 10 months is not that long. And the next payment is in September. That is also not too long. With existing situation, it looks like still to be difficult. We are also doing a lot of capex in the food business where it has its own commitments. So overall basis, because it got delayed so far, I'm just curious on how confident is the management in terms of doing that? Because neither did we go IPO in terms of liquidity, and land also got delayed. So is there any other backup option of the restructuring that's already set? Because getting finance in this market also could be difficult.

So, asset sale actually about the land is also in, you know, we kind of signed the MOU, etc. It's based in Tamil Nadu. There were recent elections there. So, it is expected to be closed this month, next month. So, overall, right? So, also you talked about government projects and the delay. The scenario is that. In terms of the government projects, now, you know, I think four major projects have been completed. So funds have to come. Earlier, you know, there was still last milestone was not done and so on and so forth. That's in place. The government benefit I talked about, we got the approvals only in July, August. So payment has to only take place this year. It could not have been done earlier. So, you know, when I'm saying something, it's based on, you know, being conservative. And also doing thorough analysis. So, and as I said, September part, we already know how that would happen. The March part, there is some more work needs to be done. I think, as I said, we have 10 months, and we are very confident that this will be done. No issues.

Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address all the questions from the participant, we request you to kindly limit your question to one question per participant. If you have a follow-up question, please rejoin the queue. Thank you. Our next question comes from the line of Sanjay Kohli from Goldstone Capital. Please go ahead.

Thank you for the opportunity. Then as a follow-up to the previous speaker's question about the debt management, there was a recent report by ICRA on the ratings, you know, update, which they provided, and that has mentioned a very advanced level of talks about sale, which is crystallized sometime this month. Where are we with that, sir?

Yeah, so I think the sale of the assets, as I said, it is happening in Tamil Nadu. We already signed the necessary MOU or whatever else. So it should happen over, you know, next couple of weeks. So that's in place. So that's what I'm saying. Some of these things are happening now, and, you know, we feel fairly confident.

Okay, so that's wonderful news because it should be a very nice near-term catalyst for investors to be also looking at the, you know, valuation and the other, yeah. And what progress have we made in the UK business and in the bottling plant? And since we made the announcement, what sort of... You know, from cash generation, from operation, what have we pumped into these businesses so far, the amounts, so that we can get a handle on the, basically on the capital work in progress or the investment, collectively, individually and collectively.

No, so the bottling beverage business, we have invested approximately 140. The project is already... We do not have to put any working capital because that's how the business works, and business has started functioning. In terms of the UK business, which was a different question, where we have grown this year from, I think, 60 million pounds to 68 million pounds. But there were some challenges related to cost. Because of the growth which we were achieving, there were additional costs. We will not be there in FY27, so, you know, I think we should get back to higher level of EBITDA into that business, but overall revenues are protected, good, you know, in a market which is not growing much, the fact that we could grow about 12% was quite nice. So, as I said, you know, if you look at overall business, the food... Thank you. The uncertainty, you know, I don't want to talk of any numbers where we'll end up, because everything is disturbed one way or the other, but overall, directionally, I think it is quite positive.

Thank you. Participant has left the queue. Our next question comes from the line of Sumit Kumar from Megat Securities.

Please go ahead. Samit Kumar, you may please proceed ahead with the question. Hello, am I audible? Yes, you are now.

Hello. Sir, my first question is regarding PAT. So, lots of hard work is going on and have been done in the past, but still we are on PAT, but we are not on positive side. So, Tim, what time? Can you give me some time that from this quarter we are expected to be PAT positive? Sir, it seems like we are working just unpaid employees of dimes. Whatever the EBITDA is, major change is going for financing the debt. And debt is increasing. Rather than decreasing, it is increasing on a consolidated basis. So can you give me some timeline that from that quarter we would be passed positive?

So I think, you know, that's a good question. Right now is to be PAD positive. But I want to just bring attention to one part, right? That's a pain felt by us also, right? That, you know, that whether you are unfaid employees of the banks after doing all the work. But when you look at the PAD, for example, for the entire FI20, the PAD is at minus 40 crores. But within that 40 crores, these were, you know, one-time issues plus... The unwinding of these NCDs, which is a non-cash item and not linked to the current year performance, if you adjust that adjusted PAT, which we have given in investor presentation also on slide 9, is about 133 crores, which was 97 crores earlier. So there is an improvement in the PAT, which we have earned on a cash basis, but on a PAT... On a reported basis, it is negative. But I think the whole idea or thought process from next year onwards, right, is that you must earn the PAC even post any adjustment, if any, to be on positive so that, you know, you have a positive EPS. So that's what we are striving for, and it should happen from next year.

Thank you. Mr. Kumar, you may rejoin the queue if you have a question. Reminded to all the participants, please leave me the question to one question per participant. Our next question comes from the line of Parag Khare from PK Investments. Please go ahead.

Good evening, sir. Thank you for the opportunity. Am I audible?

Yeah, yeah, yeah. Please go ahead.

Okay, so thank you for the opportunity. I joined slightly late as I missed some of your opening remarks. How are we doing in terms of bottling plant progress and how much we expect and if you can just tell with whom which we are doing the partnership and what kind of, you know, revenue we expect. What's your estimate for Q1 from the bottling plant lines?

I think the two lines which we set up have already started working part of February and March. But of course, there is the initial period, trials, and all of that, those have happened. And we already had, I think, about... 27-28 crore revenue clocked before end of March. You know, I can't give you the detail of exactly what is happening now, but overall season is going well. We are running both the lines quite well right now as we speak. And as the rest of the season goes and all of that, the next year revenue should be good for both of these lines. And there is a discussion that we should, you know, do. We have three more lines, I think, by, you know, investment in December, January, but most of that revenue will come, some of it will come in the fourth quarter, but most of the revenue for the additional three lines should come into the next fiscal year. So that's where we are. It looks very positive. We think this is going to be very good for the overall food business.

Okay, and are we getting closer in terms of doing the IPO for the food division? Or are we still some distance away?

Generally, yes, some distance away because of, you know, also our merchant bankers tell us that, you know, market right now, you know, has difficulties. And smaller issues, especially larger difficulties, you know, if you have a very big issue, then it's a different story. So that is something, you know, I think we need to continue to look at market, and based on the advice from merchant bankers, investment bankers, we will look at it. But I don't see that immediately happening, at least not in the first half. We will see how things change, or some of these uncertainties go away in the second half.

Okay, sir. Thank you for the opportunity, and all the rest for the busy season ahead. Thank you. Thank you.

Thank you. Our next question comes from the line of Ravi Kumar from Wadhwa. Please go ahead.

Yeah, hi. Thanks for the opportunity. I just want the market rumors that the Beverage Partnership and the Pomato Puri Partnership is with Reliance, Consumer Packs, and Kagome. Would management be able to confirm or deny this?

No, we don't want to confirm or deny. You know, in a sense that Kagome is a global international player, and we are working with them. They have been our customers for Tome and Lupi earlier, and we are working with them to, you know, increase... We are definitely... And we are doing more things with them. As we do also, you know, for example, Coca-Cola has been our customer for 15, 20 years. We work with Nestle, Unilever. You know, the global food companies, the Indian companies. I'm undercurrent of the opportunity which is out there on the beverages on overall food business.

Okay. Just a follow-up, not a follow-up question. Sir, when February 4th, when we had our results for the Q3, I mean, at least at that point of time, we were looking at overall YOI 15%. That would mean... We are in Q4, we are almost short by, in revenue, we are short by around 200 to 250 crores. I understand you gave details. Would you just be able to unbox this 200-250 by various segments? Where did we lose? And just a link to that, I mean, Feb end is when this whole uncertainty started, so the March was a troubled one. I can understand we would have had a margin impact because of the raw material price increase. How did it impact the revenue part? I'm sure there must be reasons if you can just give us a little bit more detail on that.

Yeah, you know, I think... Usually, if you think the drip and pipe which we sell to the farmers, you know, the first crop, the curry crop comes through January, right? Then the farmer fields remain open. It starts in March, then March, April, May, June. Before the monsoon, we sell a lot these four months, and then monsoon, there is a lean season again July or September, and then post the monsoon, again, business picks up. That's the nature of the business. And when early February, when we spoke, right, we were anticipating, because of the earlier good monsoon, a very strong season happening through March onwards. And that is when, you know, this war struck. And I have day-wise details, right? In the first 15 days, the prices of PVC were up by, I think, 30%. Prices of polythylene went up by 30-35%. Which has the raw material related to PVC industry business, which is what kicks in that time. And the farmers decided to postpone their purchases. And they got impacted also because of the lower produce prices for themselves. And that is what, so the entire reduction, about 200, 250 crore, is linked to this pricing shock in March. Otherwise, our overall revenue for fourth quarter should have been, you know, for standalone, which was about 1,000, was about, should have been about more than 1,200. You know, scenario, if we had done 200, 250, EBITDA would have been higher by about 25 crores, you know.

Exactly. Sir, but for March, whatever we have produced, EBITDA already had an inventory. Sorry to interrupt you, man. Just a link question.

So, I think I would answer. Yeah. I would answer. You know, there is a, of course, there is an inventory. The question is the farmers postpone in general the purchase decision, because when the raw material crisis, you know. You average out the pricing, right? When you're buying raw metal at X, then next week or after two weeks, you buy at Y and then Z. So you always average your raw metal price and your finished goods prices. And so that's the industry practice. And that's what we did also. And partly, as I said, the farmer postponed decisions to purchase also. Was not just due to this price shock, but the fact that the end produce prices for them went down. Because the exports of some of these agri and food commodities also went down at the same time. That is the reason, and that's why we fell short, because we were planned and ready. But as I said, things have started coming back now. What has gone is gone, and we still manage reasonably good level of EBITDA for the whole year and growth. But it could have been much better. So, I think we can move forward to that.

Thank you.

Thank you. Next question comes from the line of Ankit Bansal from AV Private India. Please go ahead.

Hello.

Yeah, please.

Sir. Sir, how are you looking at the current scenario, like with global environment, with domestic environment, how are you positioning yourself as a company which has been coming from the last struggling four years? How have you seen your businesses? Because you are being in a lot of businesses. My question mainly is that why not focus on the main part of the business like food, beverages? Your pipe business is not doing, I think so, in North India, I have not seen any presence of your company. What are your comments on that?

Yeah, I think, see, the company has been configured to operate across every value chain. So, just to quickly refresh everybody, we have high-tech division where we provide to farmers the drip irrigation, the pipe which goes along with the drip irrigation, and also the tissue culture, the planting material. Then, we also buy from farmers what they grow, and we process the fruits, make the pulp, and now the beverages. So, we are across the agri-value chain, right? We can't pick and choose. That's how company is structured and configured. But your question is valid that... How much do we sell in North? So our sales for the piping business are far more in Western and Southern India, but they are growing in North. I think because our base is lower in North, the percentage growth, in fact, is higher now. And we have a manufacturing plant in Alwar, near Delhi and within Rajasthan. And we are adding capacity into that to grow more into North. We are also adding more dealers. So I think the situation that our brand is not visible in North would change over next, I think, 12 to 18 month period. But all in all, the pipes are linked to irrigation. They are linked to the farm. So this is a consolidated offering. And that is a unique point, right? Yeah. You mentioned that we have struggled for four years, but... You know, within this period, we have also repaid substantial amount of debt. Company has increased its retail business. Company has increased the dealer network. The margins are better today than, let's say, they were three or four years ago. So those are the positives. And now with this, you know, this year in FY27, the substantial amount of debt gets paid. Thereafter, a company, you know, can be very focused on the growth agenda. Because whatever positive cash flow it generates, it can go into the growth. And there is still a lot of growth in this country left, and we are also export-oriented. So, you know, when medium-term, right, if I think of three, four years, you know, we are very, very positive. And even for the next year, we are being very cautious when we speak because things are uncertain. We do not know what holds for any or all of us. And we will see how that goes, but we are preparing ourselves for that. Thank you.

Okay, sir, one question, sir, about drip irrigation, like it's the major technology. Why it is not changed in northern India? I have never, ever seen drip irrigation projects in like a district like Haryana, like Delhi, like Jammu, Ashwira, Punjab. Sir, why it's not changing all over India? Why it's changing only southern part of India? Why it's not capturing all over India? It's a win-win technology, sir. Why it's not... Everybody is not using it.

Look at that effect. Maharashtra, you know, just to give you a flavor of the numbers, right? Maharashtra, we sold 700 crores. South, four states put together, we sold 400 and odd crores. Then in the west, west is then Gujarat, MP, that part, Rajasthan, that was 250 crores. The rest of the north, we sold about 88 crores. So it is not that we don't sell 88 crores. And northeast, east part, we sold about 100 crores. So, we are selling, and in fact, if I look at in north, last year sales were 75 crores, this were there 88 crores, so there is a 20% growth. East, last year our sale was 60 crores, this year is 107 crores. So, there is a substantial increase there also. So the reason North has less demand today, and I would underline the word today for drip, is typically in West and South, a farmer needs to irrigate his farm, and if he needs to take the groundwater, for example, he needs to go down 100 feet, 200 feet, 300 feet. In places like UP and Bihar, a lot of places, you go down 10 feet and you get water. So the value of the water, understanding, is less in north. But you talked about Haryana. Let's talk about Punjab, right? There are these rivers and the canals and the farmers keep on getting water. They keep on getting free electricity. They don't want to save. And if they are growing just wheat and rice, the government is buying, they are not worried about marketing. The farmers in West and South, right, they are growing value-added agriculture. They want to make more production, so they want to employ drip, because drip just doesn't save water but improves productivity and production by 50% for these farmers. They make a lot more money. Some of our customers in West and South are making two, three. Three, four lakh rupees per acre per year, net profit. And some of the farmers in northern India are also doing. We have cases of farmers in Bihar, UP, Punjab, Haryana. Number is small, right? But they are now doing very well. They are growing crops like banana, moving beyond wheat and rice. So, and we think we are now starting to drip on the rice also. So, with, you know, what happens is that sometimes it takes time. 20 to 30 years, Western and Southern India has used DRIP as a technology to change the farming and to improve the farmer incomes. I think over the next 5 to 7 years, that's going to happen in North and Northeast. And it has already started. I gave you the numbers that we are already growing in these areas, but base is small. But I think over the next 2-3 years, as we get more dealers to push forward, and as the farmers also are doing more value-added agriculture, A lot more reboot gets sold there. Thank you.

Okay, okay. Sir, one question, last question. Sir, coffee MOU, how far it has gone that you have signed with JNK government?

Yeah, the coffee MOU we signed with the coffee board. You know, in their way, our first drip irrigation systems have been delivered to the coffee grower. Again, it is happening for the kind of first time in the world that coffee, they are using these advanced irrigation methods. We already have good sales in J&K. There, the MOU was to work with the irrigation technologies into… You know, crops like saffron, because an apple, that is what is grown more in northern India, and there also we have a good success, and we think J&K using the technology can modernize its apple gardens and apple orchards, and then India does not have to import apple, because today our productivity is quite low. So, we are working with the, you know, the local farmers there to change the entire package of agriculture practices into a product like apple. Thank you.

Thank you. That, ladies and gentlemen, that was the last question for today. I would like to hand the conference over to the management for the closing remarks. Over to you, team.

Yeah, so, you know, so I think already just to summarize what I said, the last couple of months have been challenging into the business, but things are stabilizing. And so, you know, there are green shoots, growth is back, farmers have started coming with orders, so that's positive. Thank you very much. It's been a positive year for 27. DRIP continues to remain, you know, quite good margins and profitable for us. And our focus this year is on cash flow as one most important priority. to take care of the significant amount of debt which is falling to this year, but we are very confident that it would happen in time and we have taken necessary steps and we have backup options.

Thank you. Ladies and gentlemen, on behalf of DH Oxy Finso Private Limited and Gen Irrigation System, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.