The standalone net sales for Q4 FY12 was stagnant at Rs 1236.89 crore. The MIS business has shown de-growth of 5%, pipe business declined marginally while growth in agro processing was flat. Solar business has shown very robust growth. Lower growth in Micro Irrigation Business is result of company's efforts to reduce high receivable lavel and improve cash collection. Export business has continued to reflect robust overseas demand. Overall exports for the company were up by 17% at Rs 191.2 crore on the back of stellar growth in MIS (55%). OPM has decreased by 112 basis points to 20.19%. The net profit was up by 59% to Rs 173.43 crore due to lower tax and PPA.

Management Comment

Anil Jain, Managing Director, on the performance said:

The year passed by has been almost like a perfect storm for us. We have faced slowing sales growth, increasing delay in release of government subsidy receivables and consequent high working capital and high interest cost, high oil & polymer prices and depreciating rupee resulting in mark to market notional losses due to long term foreign currency assets, the list goes on….

We have taken various steps to address these factors so as to sustain our business model in meaningful manner. We have focused on reining in receivables, bringing down inventory, reducing ratio of our gearing and maintaining focus on innovation and research & development while developing new markets in applications as well as regions. We have reinforced our energies towards lighter balance sheet, consistent margins and to augment our leadership positioning in entire agri value chain.

What do we have to show for these efforts?

We have become a billion dollar company based on consolidated sales for FY 12 registering 19% growth, our overseas businesses have grown 30%. We have been able to grow 14% domestically without increasing combined inventory and receivables, our EBIDTA has grown faster than sales revenue, our net fund utilization grown at lower rate than earlier years, we have opened new Plant in Northern India, made few breakthroughs in Africa [still early days], made significant inroads into solar water pump market, have created much more sustainable food business with high margins and tied up with few best research institutions in the world to create products for better future.

We still have to go certain distance to achieve lower gearing and better balance-sheet by aggressively reducing long receivables and to consequently reduce high interest cost. We plan to achieve this with sustained multi pronged approach by working with banks who would like to lend to farmers to buy our irrigation systems, by using our proposed NBFC to create win-win financing formula for farmers and by continuously working with government so that they can disburse funds in a speedy manner. We will continue to work hard to achieve these objectives.

We believe, during current year, over next 12 months or so, we shall reach most of intended milestones. We will maintain leadership position, still grow and remain profitable while ensuring free cash flow. We will further strengthen our overseas operations within the sphere of Water- Food-Energy nexus. We will continue to build onto this great platform which we have created. This unique platform provides us an exciting opportunity to serve million of farmers around the world while creating significant value for all stakeholders over next few decades.

For quarter ended March 2012

The standalone net sales was stagnant at Rs 1236.89 crore. The MIS business has shown de-growth of 5%, pipe business decline marginally while growth in agro processing was flat. Solar business has shown very robust growth. Lower growth in Micro Irrigation Business is a result of efforts to reduce high receivable label and improve cash collection.

Export business has continued to reflect robust overseas demand. Overall exports for the company were up by 17% at Rs 191.2 crore on the back of stellar growth performance of MIS (55%).

OPM has decreased by 112 basis points to 20.19% due to increase in other expenditure by 260 basis points to 19% of adjusted net sales. The operating profit has decreased by 5% to Rs 249.71 crore.

The net gain on account of exchange rate difference was Rs 15.08 crore includes unrealized net loss of Rs 14.36 crore. There was net foreign currency translation and transaction loss of Rs 15.13 crore.

Interest cost increased by 38% to Rs 96.46 crore due to tightening interest cost and high working requirements. The provision for depreciation also inclined by 24% to Rs 26.87 crore. As a result, the PBT has decreased by 15% to Rs 143.37 crore

Total tax outgo has declined by 74% to Rs 14.27 crore due to availment of tax holidays and some tax write back from earlier years. The tax rate was down from 32.2% to 10%. After considering prior period adjustment, the net profit was up by 59% to Rs 173.43 crore due to lower tax and PPA

Performance for FY12

Based on management accounts, the company has registered significant sales growth in its overseas operations of approx 30%. Thus consolidated net sales is expected to show a growth of 19% to Rs 5000 crore.

The standalone net sales has increased by 14% to Rs 3791.51 crore. MIS has shown a growth of 11%, Pipe business grew by 4%, agro processing business recorded a growth of 18%, while PVC Sheet grew by 30% and solar business grew by 127%. OPM has increased by 54 basis points to 22.2%. The operating profit has increased by 17% to Rs 843.12 crore.

The net loss on account of exchange rate difference of Rs 128.92 crore includes unrealized net loss of Rs 114.39 crore. There was net foreign currency translation and transaction loss of Rs 61.12 crore.

Interest cost increased by 52% to Rs 347.11 crore due to tightening liquidity of country and rising interest cost. The provision for depreciation also inclined by 20% to Rs 99.88 crore. As a result, the PBT has decreased by 36% to Rs 273.01 crore.

Total tax outgo has declined by 63% to Rs 48.66 crore. The tax rate was at 17.8%. The net profit after considering PPA was down by 9% to Rs 268.6 crore due to significant mark to market foreign exchange losses

Hi-tech Agri Inputs Products

For Q4 FY12, the business contributed 68% to the entity's revenues. Net sales have de-grown by 3% to Rs 839.81 crore. PBIT margin was stagnant at 26.81%. As a result, PBIT has decreased by 3% to Rs 225.18 crore. The segment accounted for 84% of total PBIT.

For FY12, the business contributed 69% to the entity's revenues. Net sales have grown by 15% to Rs 2622.26 crore. PBIT margin has declined by 210 basis points to 26.87%. As a result, PBIT has increased by 7% to Rs 704.65 crore. The segment accounted for 80% of total PBIT.

Industrial Products

For Q4 FY12, the business contributed 32% to the entity's revenues. Net sales have grown by 8% to Rs 397.08 crore. PBIT margin has declined by 770 basis points to 10.47%. As a result, PBIT has decreased by 38% to Rs 41.57 crore. The segment accounted for 16% of total PBIT.

For FY12, the business contributed 31% to the entity's revenues. Net sales have grown by 11% to Rs 1169.25 crore. PBIT margin has inclined 308 basis points to 14.9%. As a result, PBIT has increased by 40% to Rs 174.25 crore. The segment accounted for 20% of total PBIT.

Other developments

As per the company's accounting policy during the Quarter/year ended, 31 March 2012 a sum of Rs 12.44 crore has been credited to Hedging Reserve on account of Rupee movement against major foreign currencies. Accordingly, the debit balance of Hedging Reserve Account of Rs 26.86 crore as on 31-Dec-2011 has decreased to Rs 14.42 crore as on 31-Mar-2012.

Valuation

The scrip is trading around Rs 75.5 at BSE.

The promoter has pledged 39.78% of ordinary equity share & 11.43% of DVR equity shares of total shareholding of promoter & promoter group.

The total promoters holding in the company stand at 30.35%.

Jain Irrigation Systems: Standalone Results

Jain Irrigation Systems: Standalone Segment Results