GLOBAL ECONOMY
The year 2023 presented a challenging landscape for the global economy, echoing the disruptions of the pandemic. Supply chain issues lingered, the war in Ukraine sent shockwaves through energy and food markets, and inflation climbed. Despite these headwinds, the world economy defied expectations of a recession and managed a 3.2% growth in 2023, albeit lower than the 3.5% witnessed in 2022
(as reported by the UNs World Economic Situation and
Prospects). This was driven by a stronger-than-anticipated performance in the latter half of the year, particularly in the US and some emerging markets. However, the recovery wasnt uniform. The euro area, burdened by weak consumer confidence, experienced subdued growth.
Looking ahead to 2024, the UN report offers a cautiously optimistic outlook with a projected global growth of
2.7%. This revision upward from the January 2024 forecast reflects positive developments in the US and key emerging economies, including India. While challenges like persistently high interest rates, geopolitical tensions, and climate risks persist, theres hope for a more stable year.
India, in particular, stands out as a potential bright spot. The
UN report suggests Indias growth is likely to outperform the global average in 2024. This resilience can be attributed to its robust domestic market, targeted government stimulus measures, and a young, growing workforce. However, India is not immune to global headwinds. Inflation and rising interest rates could potentially dampen future growth, and
Indias economic trajectory will also be influenced by the overall course of the global recovery.
However, the focus on economic recovery cannot overshadow the pressing issues of climate change and sustainable development. The year 2023 saw limited progress on these fronts, despite the growing urgency.
Achieving the UNs Sustainable Development Goals (SDGs) global by 2030 remains a significant shift towards environmentally and socially responsible practices. This is where the concept of ESG (Environmental, Social, and Governance) investing gains importance. ESG principles encourage companies to consider not just financial returns, but also their environmental impact, social responsibility, and ethical governance.
Governments are also implementing stricter regulations to promote ESG practices. India is no exception to this trend. The recent G20 summit held in New Delhi placed growing significant role in shaping global policies. The country is actively pursuing decarbonization goals, with a focus on renewable energy and cleaner technologies. However, challenges remain bridging the gap between ambitious goals and practical implementation requires robust infrastructure development, technological advancements, and strong collaborative efforts from both the public and private sectors.
In the recent Monetary Policy by RBI, it has summarised that ‘The outlook for domestic economic activity remains resilient on the back of strong domestic demand and improved macroeconomic fundamentals. Volatile food prices interrupt the path of disinflation and cloud the inflation outlook. Geopolitical hostilities, volatile global financial markets and climate shocks are the key risks to the outlook. Monetary policy remains focused on aligning inflation with the target to pave the path for sustained growth in the medium-term. one of the key risks identified is a Climatic Change which is going to have far wide repercussions going forward impacting economic growth, inflation, agriculture, water resources etc. It also indicates that frequent weather shocks caused by climate change pose challenges for the monetary policy as well as downside risks to economic growth. Global average temperatures are on a rise, with an accompanying increase in extreme weather events (EWE), and the economic and social impact of global warming is becoming increasingly evident. Climate change directly impacts inflation through adverse weather events affecting agricultural production and global supply chains. Climate change could impact the natural rate of interest, and the after-effects of climate change might weaken the transmission of monetary policy actions to financing conditions faced by households and firms.
In the absence of any climate mitigation policies, the long-term output will be lower by around 9 per cent by 2050 vis-a-vis a no climate change scenario with full pass-through of the physical risks of climate change to the economy. (Source:RBI Monetary Policy Report April 2024) Global climate models predict an increase in mean ambient temperatures between 1.8 and 5.8?C by the end of this century (IPCC, 2007). This heat load is already in place and greater variability in temperature and increased frequency of hot days are occurring now .
Worldwide, we see a growing focus on ESG investing, with investors increasingly seeking out companies that demonstrate commitment to sustainability. We, at JISL, exemplify how businesses can contribute to a greener future. Our micro-irrigation technologies promote water conservation, a crucial aspect in drought-prone regions. Additionally, we champion the use of renewable energy sources and sustainable farming practices, helping reduce the agricultural sectors environmental footprint. We at JISL are fully committed
Indias Economic Outlook: A Positive Shift
Adding to the global cautious optimism, Indias Economic
Survey for FY24 paints a relatively bright picture. The survey projects a GDP growth exceeding 7.2%, marking the third consecutive year of over 7% growth. This robust performance can be attributed to factors like:
Increased Public Sector Investment: The governments focus on infrastructure development and social welfare programs is expected to stimulate economic activity.
Robust Financial Sector: A stable banking system and increased credit flow to key sectors like agriculture and MSMEs (Micro, Small and Medium Enterprises) are crucial for growth.
Strong Non-Food Credit Expansion: Increased lending to non-agricultural sectors indicates growing investment and industrial activity.
Challenges Remain: Inflation and Sustainability
While the Indian economy shows promise, challenges persist. Inflation management and rising interest rates pose potential risks to future growth. Additionally, aligning Indias impressive economic trajectory with its sustainability goals requires continued efforts in areas like:
Renewable Energy Integration: Accelerating the adoption of clean energy sources is crucial for reducing carbon footprint and ensuring energy security.
Climate-Smart Agriculture: Promoting sustainable farming practices and water conservation technologies like those championed by JISL will be essential.
Technological Innovation: Investing in research and development for clean technologies and climate-resilient infrastructure is vital for long-term sustainability. By addressing these challenges and capitalising on its strengths, India can navigate the global economic landscape effectively while ensuring a sustainable future. For future sustainable growth of Agri and allied products in India, various initiates needs to taken such as to boost exports beyond cereals into marine, processed vegetables higher budgetary allocation will be necessary, long term credit facility and access to credit at competitive rates needs to be made available to farmers, strong rural infrastructure including roads, bridges, storage facilities, cold chains, and veterinary services needs to be built which can significantly reduce post-harvest losses and improve market access for farmers in remote areas and offering and promoting agri technologies and practices which would help to minimise impact of climate change is very important. Jain Irrigation is playing a pivotal role in offering the latest technology and assistance to farmers to overcome the challenges of climate change.
Industry Overview
Agriculture & Irrigation
Agriculture, involving around 54.6% of Indias total workforce and contributing 17.8% to the countrys GVA, is pivotal to Indias economy. However, conventional farming methods have led to limited efficiency and productivity growth. Therefore, the Indian government has initiated the fourth agricultural revolution, known as Agriculture 4.0.
This advanced approach is a refinedversion of precision farming, aiming to enhance yield quality and quantity while minimising environmental damage. According to Bain & Co., the Indian agricultural sector is predicted to increase to US$ 30-35 billion by 2025.
Source: IBEF
With the help of technology and government initiatives, this new approach offers a promising growth trajectory for Indian agriculture. Agriculture 4.0 includes cloud-based solutions and other cutting-edge management techniques to increase farming efficiency.
The governments policy initiatives for agricultural digitalization include the Jal Jeevan Mission, PM Kisan
Yojana, Agriculture Infrastructure Fund, PM Fasal Bima Yojana, Mission for Integrated Development of Horticulture, National Agriculture Market (e-NAM) Scheme, Organic Farming under the Paramparagat Krishi Vikas Yojana (PKVY), Rashtriya Krishi Vikas Yojna (RKVY), and the Atmanirbhar Clean Plant Program. These initiatives are designed to boost productivity, supplement farmers financial needs, support post-harvest activities, provide insurance, and promote online transparent trading and organic farming. Under Pradhan Mantri Krishi Sinchayee Yojana (PMKSY)-Per Drop More Crop, an area of about 145
Lakh hectare (ha) has been covered till 2024 under micro
( Drip and Sprinkler) irrigation in the country
In the Budget 2023-24, the Indian government announced following key initiatives for the agricultural sector: Digital Public Infrastructure for Agriculture: This open-source, interoperable public good will offer farmer-centric solutions through improved access to information, inputs, credit, and insurance, supporting crop planning and the growth of the agri-tech industry. Agriculture Accelerator Fund: Aimed at encouraging agri-start-ups by young entrepreneurs in rural areas, this fund will introduce innovative solutions to farming challenges and boost modern technologies to improve productivity.
Atmanirbhar Horticulture Clean Plant Program: With an outlay of Rs. 2,200 crores, this initiative will ensure the availability of disease-free, quality planting material for high-value horticultural crops.
Agriculture Credit: The target for agricultural credit will be raised to Rs.20 lakh crore, focusing on animal husbandry, dairy, and fisheries Centres of Excellence for Artificial Intelligence: Three centres will be set up in top educational institutions, in partnership with leading industry players, to foster interdisciplinary research and application development in agriculture, health, and sustainable cities, thereby building an effective AI ecosystem. Agricultural growth rate is an important factor which may impact our Company.
Water Supply and Management
Water scarcity is a global issue affecting millions of lives, food security, health, and the environment. Under Sustainable Development Goal (SDG) 6, all nations aim to provide Clean water and sanitation for everyone by 2030. India, with 18% of the worlds population but only 4% of water resources, faces high to extreme water stress. This problem is likely to be exacerbated by climate change and erratic monsoons. To address this issue, the Indian government established the Ministry of Jal Shakti in 2019 to handle water resource management.
Under this ministry, the Jal Jeevan Mission was launched with the aim to provide piped water supply to every household by 2024. The mission, backed by USD 65.6 billion in public funding, focuses on establishing community-managed, demand-driven water supply systems. Additionally, Rs.15,000 crore will be allocated over the next three improvement in overall EBITDA margins by 16% years for the Pradhan Mantri Particularly Vulnerable Tribal Groups Development Mission under the Development Action Plan for the Scheduled Tribes, which includes clean drinking water provision.
In the traditional irrigation systems of Dam and Canal, the irrigation efficiencies are very low, say up to 40 % due to water loss on account of evaporation, seepage etc. In order to increase the Irrigation efficiencies and Water Use Efficiencies, the Government of India is encouraging micro irrigation systems and Pressurised Distribution Network (PDN) systems in the canal command areas on a large scale. These systems (PDN) are future ready systems for micro irrigation systems. Few lakh hectares have already been developed as PDN in Madhya Pradesh, Gujarat, Maharashtra, Himachal Pradesh, Haryana and Karnataka. This is additional potential that has been created for micro irrigation systems in the country.
After realising the multiple benefits of the micro irrigation technology and fertigation technology, the Government of India has now an ambitious plan of covering 20 Lakh ha per year under micro irrigation systems in the country during the next plan period.
Overview of the Business:
Jain Irrigation is a diverse group, specialising in areas such as Micro and Sprinkler Irrigation Systems, Precision Farming, Tissue Culture, Plumbing Systems, Drinking Water Solutions, and Renewable Energy, among others. Its business spans four verticals: Hi-Tech Agriculture, Plastics, Agro Processing, and Others (including solar systems & products).
Jain Irrigations main businesses are a) Hi-Tech Agri including Planting Material and b) Plastics, with c) Agro Processing business operations through its subsidiary,
Jain Farm Fresh Foods Limited, India and its subsidiaries in the UK, USA,Europe, Dubai, Ireland, and Turkey.
The Company is Indias largest polyethylene pipe producer, amongst the top three PVC pipe producers, and the worlds largest tissue culture banana and pomegranate plant producer. JISL produces more than 120100 million banana tissue plants each year. Additionally, JISL is the worlds second-largest dehydrated onion producer and the largest producer of mango pulp, puree, and concentrate in India. It also works with hybrid and grafted plants, bio-fertilizers, biogas, renewable energy sources, and more. All of its manufacturing plants comply with international
FDA regulations and are ISO 50,000 & HACCP certified. JISL offers integrated agricultural solutions, such as crop rotation and selection for watersheds or wastelands. Its products aim to conserve natural resources and promote sustainable agricultural growth, ultimately aiming to double farm income.
In FY24, Jain Irrigation Systems Limited (JISL), on
Consolidated basis registered revenues of Rs. 61.47 billion as of March 31, 2024 with a growth of 7% YoY basis and significant to Rs.8.55 billion. As a leader in Indias Micro and Sprinkler Irrigation systems and the second-largest globally, JISL operates across the agricultural value chain.
The Company saw major growth in its plastic business followed by Agro Processing business with significant improvement in margins in Plastics business.
In Standalone business during the the year Company saw marginal growth of 5.7% in Revenue on account of its strategic decision to reduce EPC business which resulted in a drop in Revenue from EPC business from Rs.733 Crs in FY23 to Rs.322 in FY24. However, at the same time, the Company saw growth of 25% in Revenue from its Retail business from Rs.2,523 Crs to Rs.3,153 Crs. The overall EBITDA margins also improved by 10.3% during FY24 The company continues to focus on improving its profitability, working capital efficiency, quality of business and deleveraging the balance sheet by repayment of debt.
Growth Drivers and Strategy
At the forefront, our aim is to leverage strengths and focus on expanding our business operations by utilising our capabilities in product innovation, R&D, manufacturing capabilities, solutions to farmers and farm produce through our vast network of dealers and associates worldwide. As we create value along the entire supply chain in the three areas viz.water, energy, and food security, we want to be the leading Company managing water, food, and natural resources. The main components of our present strategy are as follows:
a) Expand the geographic markets and product offerings:
The Companys operations in India and overseas are being expanded geographically. While the Company continues to make efforts to increase sales in other regions by extending the reach of its retail distribution network and utilising the current distribution capabilities, historically, MIS product and piping system sales in India have been concentrated primarily in the Western and Southern regions of the country. prospects for growth and further solidify its market position. It leverages on its R&D capabilities to expand and diversify the use of its MIS products in India, including its use for wheat and rice in addition to commercial cash crops including sugarcane, cotton, vegetables, and fruits. This provides the Company with a substantial opportunity for horizontal expansion to boost sales of its MIS and Pipe products.
b) Continue to focus on Agri Solution Approach: The Company has positioned itself as an end to end solution provider and ‘One Stop Shop for irrigation, water conservation, and water management and food security. The Company follows a solution based approach with thorough analysis about cultivation area, seasonality of a crop, weather conditions, farmers need and application of the Company products to provide sustainable solutions for higher yield from farm land, disease free quality output and higher realisations for farmers. The
Company has put in significant efforts in developing new varieties for Banana, Pomegranate, Sweet Oranges, Onions, Papaya, Potato and others through its In-house
R&D centres under Jain Tissue Culture, Jain Seeding, Jain Seeds, Jain Hi Tech Factories and Jain Grafting.
The Company also provides comprehensive solutions for Green houses and Poly houses as a part of Hi Tech Agri business.
c) Promoting latest technology based Agri Solution
The Company has a unique position in the Agri Industry. The Company has over four decades of experience in the Agriculture Sector and has the highest reach towards farmers in India. The Company offers effective solutions to minimise the impact of Climate Change and elevated temperature under Climate Smart Agriculture.
Climate change is hitting hard on this Water-Food-Energy Nexus. Untimely rains, heat waves, temperature variations, cold waves, drought, GHG emission from farms are affecting agriculture. Farmers incomes are declining and agriculture is becoming unsustainable.
| Climate factor | Issues | Jain Irrigations Solutions |
| Heat waves | Terminal heat stress during the grain filling period affects grain formation & yields drop up to 30% | Acurain - mini sprinklers to be operated to control heat stress at the hottest part of the day during grain maturity. |
| Cold Waves (Frost) | Sudden cold waves or black frost freezes the sap flow and crop burns occur | Acurain Micro Sprinkler or Mini Sprinkler with fully automated system equipped with frost sensor to be operated to warm up the crop area at the coldest pre- morning hours |
| High Temperature stress | Crop yield decreases, pale colour fruits and fruit cracking | Acurain - Mini Sprinkler System to be used for evaporative cooling during fruit development stages |
| Global Warming (Especially through crop irrigated with _ood irrigation or requires standing water) | Methane emission(GHG) | Adoption of drip irrigation even for the crops presumed to require standing water e.g. rice |
| Sudden climatic fluctuations | Crop yield decreases | Developed Climate Neutral cultivation practices using which farmer can grow most of the crops commercially anywhere in the tropics and subtropics by climate proo_ng methods |
| Prolonged dry spells (rain breaks) during monsoon | Decrease in crop yield or entire crop loss due to non- availability of soil moisture at critical periods of growth. | Developed package and practices for survival irrigation which uses portable irrigation sets. Use of drip irrigation also helps to ameliorate intermittent dry spells. |
| Droughts | Crop loss, decrease in yield | Developed drought tolerant varieties. Developed package and practices for crop survival during drought periods. |
| Higher energy consumption in agriculture is an indirect factor responsible for climate change | High energy cost to the user and governments and impacts the environment | Developed drip irrigation system which can perform at very low pressure, as low as 0.1 kg/cm?, that reduces energy consumption. |
| Developed Solar powered drip irrigation system. Developed Agro-photovoltaic system. | ||
| Soil Degradation | Overuse of water and fertilisers degrades the soil | Digi-tech solution "Jain Logic" which helps to optimise irrigation according to soil moisture. |
| Advance fertigation machines which ensures maximum efficiency by monitoring EC and pH during fertigation |
d) Focus on Retail Sales and Cash & Carry business model: The Company is focussed on deleveraging its Balance Sheet by improving overall working capital cycle. In these efforts the Company reduced its DSO from 250 days in FY22 to 235 days in FY24 on Standalone Basis. On a consolidated basis there was a small increase from 176 days in FY23 to 188 days in FY24 mainly on account of payments to creditors which resulted in increase in net working capital cycle.
By assessing the benefitsand feasibility of using various funding sources, the Company aims to optimise its capital structure. Additionally, the Company plans to continue focusing on its cash and carry model for MIS product sales to its dealers, which has decreased the gross credit days for MIS product sales over the past few years. Company continues to adopt these measures to increase its free cash flow, enabling it to better pursue the development of the business even though currently there is a challenging situation on Government project related receivables, which is temporary in nature. As indicated earlier, the Company has not participated in any EPC project for the past 3 years and Company continues to complete its work on these projects. The Company has over 4000 across on pan India basis with major concentration in the state of Maharashtra, Gujarat, Tamil Nadu, AP, Telangana, Rajasthan. The Company is focussing on developing its network in Rajasthan, Punjab, North East, UP, Bengal.
The Company continues to support its Dealers for getting financingunder Dealer Finance Schemes of various banks and NBFCs at competitive terms which would help the Company to grow its business and also ensure growth of its Dealers going forward.
Competitive Strengths
The following, in our opinion, are our key competitive advantages.
a) Strong Brand and Innovative Products: Being a leading manufacturer of micro irrigation systems, piping systems, and agro-processed products in India, weve built a large dealership and distribution network throughout the country. Known brands like Jain Drip, Jain Sprinklers, Jain Pipes, Chapin, and Jain Farm
Fresh are popular domestically and globally. Our deep collaboration with farmers, state governments, and international organisations helps us innovate and educate, maintaining our leadership position.
b) Experienced Leadership: Our seasoned management teams deep understanding of global agricultural markets over five decades allows us to diversify our offerings and expand globally. With over 1,000 skilled professionals, we provide unparalleled after-sales support and training, differentiating us from competitors.
c) Global Reach: Companys entire product range meets international standards. The Company is able to make direct export and through its subsidiary for micro irrigation solutions and its plastic products division.
d) Integrated Agri-Value Chain Solutions: Our holistic approach to the agricultural value chain helps us diversify our offerings and foster strong relationships with farmers. We provide biotech tissue culture plantlets, solar pumps, irrigation systems, and a host of turnkey services, including agronomic and technical support. Our traceability offers sustainable solutions in compliance with international food safety norms.
e) Robust R&D and IP: We leverage technology for operational efficiency, strict quality control, and product innovation. Our focus on R&D enables us to develop new products and enhance existing processes, ensuring customer satisfaction and retention. The Company has largest number of offerings in MIS and SIS, Pipe and Pipe fittings
f) Product Quality: Our stringent quality management program ensures defect minimization and efficient manufacturing processes. Our commitment to "Jain Good Agricultural Practices (JAINGAP)" promotes traceability, environmental protection, and food safety, reinforcing customer trust.
Overview - Food Business
Jain Irrigation Systems Limiteds entry into the food processing business goes back to 1979 when the company converted a banana powder processing unit in Jalgaon to make a very high-quality food enzyme Papain from the latex of papaya fruit. This business, in its limited size, carried on till early 1990s. Then thirty years ago, in 1994, Jain Irrigation Systems Limited set up a greenfield project to make fruit with pulps and purees, and in the positive swing infollowing year, profitability dehydration facility to make dehydrated onion and garlic. Ever since, the food business of JISL has gone from strength to strength during the last three decades. For the last 8 years, the food business has been operating under subsidiary Jain Farm Fresh Foods, Limited (JFFFL) and consists of operations in
India, Turkey, Belgium, UK, and the USA.
JFFFL employs all key food processing technologies in its operations, namely dehydration, pulping, freezing, fresh and mix of some of these technologies. Product range includes tropical fruit pulps and purees, concentrates, clarified juices, dehydrated onion, dehydrated garlic, Indian spices like Chili, turmeric, ginger, cumin, coriander, Mediterranean herbs and spices via our Turkey facility, supply of industrial dry food ingredients, mixes via our Belgium and UK subsidiaries, frozen fruits, frozen vegetables via our USA operation, fresh fruits, value add seasoning, mixes, blends, retail products for India markets, private label and co-manufacturing operations through our operations for optimum capacity utilisation, etc.
Following is an overview of JFFFLs key businesses and how these stand-alone businesses form a common theme and group themselves with shared purpose of leadership in high impact value proposition in supply of industrial food ingredients to key sectors of food value chain in food manufacturing, food service / institutional sale, private label, co-manufacturing, generic retail, branded retail, etc.
INDIA:
JFFFL India business consists of main business verticals and sub-categories within these:
Fruit puree, Concentrates, Clarified juices, IQF Fruits, frozen fruit pulps, co-manufacturing of retail beverages, custom value add products, (Fruit Division) Dehydrated Ingredients Division consisting of main products like dehydrated onion, garlic and spices of Indian origin in bulk pack, small pack, branded spices, custom blends, spice pastes, etc (DHO Division) Company has marquee customers like Hindustan Coca
Cola, Nestle, Unilever, large names in the QSR sector etc. JFFFL India plays a vital role in supply of ingredients via its international subsidiaries in the UK, USA and Turkey.
During the year under review, JFFFL Indias performance on a stand-alone basis showed low single digit revenue growth however a 10% growth in Ebitda.
The Companys Fruit Division showed significantlyimproved performance in terms of revenue and healthy profitability.
Strong growth in revenue was observed in export sales. The export order book was strong, but the Company faced some volume allocations challenges due to adverse mango crop (due to short season) and the Company held back on potential volumes for export markets of Europe, Asia Pacific and North America.
Companys DHO Division had negative growth in revenue by 2% but significant Ebitda improving by 16% YOY. Less than ideal situation was observed in production volumes of Dehydrated Onion, Dehydrated Garlic, Indian Spices. Production volumes were tracking around 60-65% in key production months compared to what was anticipated.
OVERSEAS:
JFFFLs overseas operations showed stronger performance during the year under review. Both revenue and Ebitda performed well. Overseas operations contributed nearly 60% of JFFFL group revenue. UK Operations under subsidiary Sleaford Quality Foods showed 14% growth in revenues. Company has good distribution coverage of the British Isles and supplies to all key food manufacturing companies, food service companies and private label markets. Turkey and Belgium operations showed strong resilience in adverse market conditions, especially in Turkey due to currency issues. All the companies continued to show year-on-year improvement in business performance and working capital management.
Growth Drivers and Strategy
JFFFL s India operations are on a growth trajectory afterCOVID disruptions and other challenges. Companys strategic direction is heavily focused on first reaching the Pre-Covid levels of operations in revenue, margins, capacity utilizations and working capital management. The Company enjoys very strong customer relationships despite many supply challenges we faced in our supply chain to our customers. Company has unmatched farmer relations in India due to farmer relation strength of parent
Company Jain Irrigation Systems Limited. Company is focused on leveraging the parent Companys strengths and filling a yawning gap that exists in food markets with respect to traceability, sustainability and subsequently food safety It is safe to say that our customer base has remained loyal to us due to our strengths in backward integration, contract farming, supply chain traceability, world class processing facilities and customer service. Food value chain looks for an undisrupted supply chain and our capacities put us on an unparalleled platform. Focus is to reach pre-covid capacity utilisation levels and then go beyond.
Company is also looking to grow in adjacent categories. To expand its processed fruit products basket, the Company is exploring the manufacture of processed citrus pulps and concentrates. Increased tomato processing in conjunction with large global strategic players is another area of new focus. Spice business is gaining traction both in bulk and in small packs. Our retail operations in India are regaining traction, especially new brands in healthy fruit snacks under an in-house brand named "FRUSH". Company uses its own processed fruit pulps as raw materials for production of this healthy snack. The Companys retail spices under brand Valley Spice are also gaining popularity. These natural food products are prepared without any preservatives, artificial flavours and aimed to provide a healthy nutrition to our customers.
Overseas operations are also continuously evolving their strategic approach to markets. Businesses are adapting well to changing market conditions, adding new markets, and new origins in the supply chain. Parent Companys supplies form about 22% of overseas sourcing. Rest comes from various other origins, suppliers. Operations continue to look for efficiencies in those supply chains regularly.
Competitive Strengths
JFFFL s competitive strengths include:
a) Strong Research and Development: The Company, in its early years of food processing business had to face many challenges w.r.t. getting viable varieties of fruits and vegetables for processing. As a result, the Company had to come up with its own varieties. What started as a crisis driven move has now become the Companys strongest attribute and gives the Company an edge over its competition.
b) Strong backward linkage and contract farming: One of the few companies in the marketplace in any sector - that has fully integrated supply chain, farming base due to strong parent JISLs farmer reach. Sustainability story of the Company is used as an industry benchmark by many to emulate.
c) Experienced Management: One of the key strengths is highly experienced management and management team helping the Company to source the agricultural produce at right time at competitive prices, quality and quantum
d) World class facilities: All the operations of the Company, whether in India or abroad are world class facilities, approved by major customers and hold all necessary qualitycertifications
e) International reach of the products: The Company has direct access to the institutional and food service industries in the UK thanks to our subsidiary in the UK, Sleaford, which distributes spices and other blends of food ingredient items. Our agro-processed products have a strong presence in the US and Europe. Unique processes in our Frozen Ingredients division and a direct supply chain to UKs institutional and food service industries through our UK subsidiary, Sleaford, allow us to meet global market demands
Subsidiary Operations of JISL
Indian Subsidiary Companies
DripTech India Pvt. Ltd., India ("DripTech") is owned to the extent of 74% by JPFTIPL and 1% by JISL. The Company focuses on affordable, high quality irrigation systems designed for small-plot farmers which are affordable, high quality and easy to use which will help to increase income from farm land. The Company caters to both domestic and international markets. Revenue of the Company has increased by 62.5% from Rs.134.89 million in FY 2022-23 to Rs. 219.16 million in FY 2023-24, mainly due to volatility in the market for low priced irrigation products.
Overseas Holding Companies:
a) JISL Overseas Ltd., Mauritius ("JISO") is a wholly owned subsidiary of JISL India and was incorporated in 1994 under the laws of Mauritius. JISO acts as a holding Company for the UK based overseas subsidiaries. It holds 54.53% in Jain (Europe) Ltd,. It made a net loss of US$ 0.02mn in FY 2023-24 against net profit of US$ 1.99mn in FY 2022-23 which was on account of profit on sale of discontinued operations.
b) Jain International Trading B.V., ("JITBV") is a wholly owned subsidiary of JISL India incorporated in March 2010 under the laws of The Netherlands. It holds 45.47% in Jain (Europe) Ltd., UK, and 100% in Jain Americas Inc., USA, Jain MENA DMCC, Dubai and Jain Overseas B.V., Netherlands. JITBV had a net loss of US$ 2.93mn in FY 2023-24 as against net profit of US$ 1.32 in FY 2022- 23 on account of the loss recognised on completion of accounts of the sale of international irrigation business.
c) Jain Overseas B.V., The Netherlands ("JOBV") is a wholly owned subsidiary of the Jain International Trading BV, and was incorporated under the laws of The Netherlands. It has been in business since 2007. JOBV has a net loss of US$ 1.23mn in FY 2023-24 against net loss of US$ 1.76mn in FY 2022-23.
d) Jain (Israel) B.V., The Netherlands ("JIBV") is a wholly owned subsidiary of the Jain Overseas B.V., The
Netherlands was incorporated under the laws of The
Netherlands. It has been in business since 2007. JIBV had a net loss of US$ 2.12mn in FY 2023-24 against net profit of US$ 112.99mn in FY 2022-23
e) JISL Global SA, Switzerland ("JGSA") is a wholly owned subsidiary of the Jain Overseas B.V., The Netherlands and was incorporated under the laws of Switzerland. It has been a holding Company since 2007. JGSA had a net profit of CHF 0.11mn in FY 2023-24 against a net loss of CHF 0.20mn in FY 2022-23.
f) JISL Systems SA, Switzerland ("JSSA") is a wholly owned subsidiary of the JISL Global SA., Switzerland and was incorporated under the laws of Switzerland. It has been in business since 2007. JSSA had a net loss of CHF 0.01mn in FY 2023-24 against net profit of CHF 0.03mn in FY 2022-23.
g) Jain Netherlands Holding, I B.V. The Netherlands ("JNHBV I") is a wholly owned subsidiary of the Jain Overseas B.V. The Netherlands and was incorporated under the laws of The Netherlands in 2020. JNHBV I had a net profit of US$ 0.03mn in FY 2023-24 against net loss of US$ 0.01mn in FY 2022-23.
h) Jain Netherlands Holding II B.V., The Netherlands ("JNHBV II") is a wholly owned subsidiary of the Jain Overseas B.V. The Netherlands and was incorporated under the laws of The Netherlands in 2020. JNHBV II had a net profit net loss of US$ 0.01mn in FY 2022-23.
Overseas Sales and Distribution Companies
i) Jain (Europe) Ltd., UK ("JEL") is a wholly owned subsidiary incorporated in 1996, under English laws. Jain (Europe) Ltd. is our marketing and distribution arm in the UK and other EU countries. The sales of the Company decreased by 91.6% from GBP 0.13 million in FY 2022-23 to GBP 0.01 million in FY 2023-24. The decrease in sales is due to a re-alignment within the group of sales from the parent Company in India directly to customers in major markets. The Company now operates as largely a holding / financing Company for the Plastic business subsidiaries.
j) Jain Americas Inc., USA ("JAI") is a wholly owned subsidiary and was incorporated in August 2022, under the laws of Delaware, USA. It is the key marketing and distribution in the United States for Plastic sheet & Hi-tech agri business. The sales of the Company increase by US$ 24.15 million in FY 2023-24 to US$ 0.70 million in FY 2022-23 (for the last two days). Jain America Holdings Inc., USA has carved out its Plastic Business into JAI on March 29, 2023.
l) Jain MENA DMCC, Dubai ("JMENA") is a wholly owned subsidiary of Jain International Trading B.V., Netherlands and was incorporated in 2017, registered in Dubai Multi
Commodities Center, Dubai. JMENA is the marketing and distribution arm in Dubai and other neighbouring countries. The sales of the Company have increased from AED 4.95 million in FY 2022-23 to AED 12.20 million in FY 2023-24.
Operating Overseas Subsidiary Companies m)Ex-cel Plastics Ltd., Ireland ("EPL") is a Company limited by shares and was incorporated in 2013 under the laws of the Republic of Ireland. The Company is engaged in manufacturing Plastic sheets products. EPL is one of the leading manufacturers of the highly technical product PVC Foam Sheets in Europe. The sales of the Company have increased by 13.1% from EUR 26.87 million in FY 2022-23 to EUR 30.38 million in FY 2023-24. After Covid-19 slowdown, the Company has strongly turned around and registered a double-digit revenue growth. Ex-cel Plastics Limited is now the leading player in Europe in PVC Foam Sheets especially in the key markets such as Germany, France & UK. Ex-cel Plastics is the strategic supplier to the leading plastic sheet distributors across all the main European countries. Ex-cel Plastics Limited has one of the widest product ranges in the industry. EX-
CEL Brand is widely recognised as the most preferred brand by digital print companies and in the building industry due to the consistent quality & reliability of supplies. The European market for sign and graphics has been quite challenging due to diverse reasons such as inflation, reduced demand and a cut in sales & advertising budget by major companies. Ex-cel Plastics has managed to stay ahead of competition despite the of US$ 0.03mn in FY 2023-24 against challenging environment.
n) Northern Ireland Plastics Ltd. ("NIP") is owned 100% through the Jain (Europe) Ltd., UK. The Company is engagedinmanufactureanddistributionofPolypropylene (PP) twin-walled plastic sheets under the well-known brand name CORRIBOARD. Company was acquired to expand the product range, extend the presence at key European distributors, expand the markets for plastic products and provide a plastic manufacturing base in the United Kingdom to service that market. Company is one of the largest manufacturers of Polypropylene Twin Wall Sheets in Europe, and has an excellent reputation for product quality and service. Company also employs the latest extrusion technology at its plant in Northern Ireland, and complements our existing plastic sheet operations in the Republic of Ireland. The Company services three main industries Sign & Graphics,
Packaging & Building Construction. With the increase in online sales of products, the Company is focussing on the Packaging sector. The sales of the Company have decreased by 16.4% from GBP 14.21 million in FY 2022-23 to GBP 11.89 million in FY 2023-24. Northern Ireland Plastics continues to service mainly the UK market in all the key areas of Sign & Graphics, Packaging sector and in Building Construction. CORRIBOARD continues to be the most preferred brand in its sector.
o) Boomer Industries Ltd,UK. ("Boomer") is owned 100% through the Jain (Europe) Ltd., UK. The The sales of the
Company GBP 6.97 million in FY 2023-24.
Subsidiary Companies – Food Business
p) Jain Farm Fresh Foods Ltd., India ("JFFFL") The Company incorporated in April-2015. The Standalone revenue of the Company has increased from 1.7% on yoy basis to Rs. 6,712.76 million in FY 2023-24 as against
Rs. 6,603.06 million during the FY 2022-23. The Company also had better margins on account of better realization in spite of higher raw material prices.
q) Jain Processed Foods Trading & Investments Pvt. Ltd., India ("JPFTIPL") is a wholly owned subsidiary of the Company. JPFTIPL holds 74% of Driptech India Pvt Ltd. & 7.16 % in JFFFL.
Overseas Sales and Distribution Companies
r) Jain International Foods Ltd., UK ("JIFL") is a wholly owned subsidiary of the Jain Farm Fresh Foods Ltd., India ("JFFFL") and incorporated under English laws. The sales of the Company increase in FY 2023-24 by 17.1% on yoy basis. In FY 2022-23 GBP 17.17 million and in FY 2023-24 GBP 20.11 million. JIFLs trading business primarily involves servicing customers on behalf of its parent Company i.e. Jain Farm Fresh Foods Limited by providing local logistics and sales support. The Companys performance is dependent upon volume allocation from the parent Company in the markets and customers that JIFL looks after. During the year under review, while the parent Companys standalone performance showed growth in revenue year on year basis, JIFL revenue declined due to supply chain disruption and lesser allocation of volumes by the parent Company.
s) Jain America Foods Inc., USA ("JAF") is a wholly owned subsidiary and was incorporated in 1998, under the laws of Ohio, USA. It is the sales, distribution and investment arm in the United States for the food business. The sales of the Company decreased from US$ 1.14 million in FY 2023-24 to US$ 1.53 million in FY 2022-23. Company is a sales and distribution arm for food business and servicing North American markets.
Operating Overseas Subsidiary Companies
t) Sleaford Quality Foods Ltd., UK ("SQF") is based in Sleaford town in Lincolnshire County in the East
Midlands region of England. Primary nature of its business is blending, repacking, trading & distribution of food ingredients. The sales of the Company increased by 5.9% from GBP 53.15 million in FY 2022-23 to GBP 56.27 million in FY 2023-24. The Company continues to enjoy a strong order book and excellent customer relations. Some challenges remain on the supply side but the Company is managing these challenges well.
u) Jain Farm Fresh Foods. Inc ("JFFFI, USA") is a wholly owned subsidiary through Jain America Foods Inc., USA. JFFFI, USA is engaged in the frozen vegetables and frozen foods business. The sales have decreased by 8.9% from US$ 40.09 million in FY 2022-23 to US$ 36.53 million in FY 2023-24. Company is focused on improving working capital cycle and inventory reduction. Despite reduction in revenue, Ebitda performance was strong and Ebitda as % of sale was higher in year under review, compared to previous year. Company enjoys strong customer relations due to high quality products it offers to customers. Company also has strong order book.
v) Jain Farm Fresh Holdings SPRL, Belgium ("JFFH") is a wholly owned subsidiary and incorporated in 2018 under the laws of Belgium. JFFH has acquired 100% stake in Innova foods N.V. Belgium. Innova food is a leading importer, stockist and distributor of food ingredients and has become one of the leading players in the dehydrated vegetables, spices and other food ingredients in Belgium, Netherlands, France and other neighbouring countries.
Consolidated sales of the JFFH including Innova food for FY 2022-23 were EUR 21.45 million and FY 2023-24 is EUR 21.90 million. Company managed supply chain challenges well during year under review.
w) Jain Farm Fresh Gida Sanayi Ve Ticaret Anonim Sirketi, Turkey ("JFFG") is a subsidiary and incorporated in 2019 under the laws of Turkey. JFFG is a leading processor, importer, stockist and distributor of food ingredients, especially Mediterranean herbs and spices. The sales of the Company were US$ 10.86 million in the year 2022-23 and US$ 9.84 million in 2023-24. The Company is the youngest Company in the JFFFL food group.
During the year under review, the Company saw delayed volumes offtake from one of the key customers and as a result showed less revenue year-on-year. Company is operating in economically volatile environment of very high inflation and interest rates but the Company is managing these risks well.
Our company is a one-stop shop for innovative agricultural solutions. We specialize in designing and manufacturing efficient, long-lasting irrigation systems, including drip irrigation, sprinkler irrigation, and integrated solutions. Our in-house technological expertise allows us to create products that maximize water savings, ensure bountiful harvests year after year, and offer hassle-free installation. We also offer biotech tissue culture services to support modern farming practices. Our commitment to sustainability is evident in our high-tech systems, which are not only environmentally friendly but also designed to optimize labor and fertilizer costs. We strive to provide farmers with the tools they need to thrive while minimizing their environmental impact.
We believe our solutions are designed to experience the future of agriculture where innovation meets efficiency for a greener, more prosperous tomorrow.
Industry:
1) Micro Irrigation Systems
The Indian agricultural landscape continues to grapple with growing food demand due to a rising population and shrinking arable land.
This has intensified the need for efficient irrigation solutions, with micro-irrigation technologies (drip and sprinkler systems) emerging as a critical tool for water conservation.
The combined market for fertilizers, pesticides, seeds, plastic pipes, and micro-irrigation systems in India is currently estimated at USD 12.5 billion (as of mid-2024).
JISL, a key player in this sector, holds a 4.2% market share, translating to approximately USD 525 million in revenue.
This market is projected to grow significantly, reaching USD 20 billion by 2030. JISL aims to capitalize on this growth by targeting a 5% market share, equivalent to USD 1 billion in revenue.
The micro-irrigation segment, while still a smaller portion of the overall market, is experiencing rapid expansion.
Growing awareness among farmers about the benefits of water efficiency, coupled with the governments push for micro-irrigation adoption through subsidies, are key drivers room for behind this growth.
Indias micro-irrigation market remains consolidated, with portionthe top five companies commanding a significant of the market. JISL competes in this landscape alongside both domestic and international players. Government subsidies continue to play a crucial role in driving micro-irrigation adoption, with ongoing programs covering a substantial portion of installation costs and providing additional support to small and marginal farmers.
Operational Performance share, banana dominates as the largest
Revenue from domestic sales of Micro Irrigation Systems has decreased by 13.3% in FY 2024 to Rs.15,643 million from Rs.18,044 million in FY 2022 mainly due to reduction in turnkey projects related sales. However, Retail sales has increased. Export of MIS has decreased by 15.9 % to Rs.1,725 million in FY 2024 from Rs..2,052 million in FY 2023.
Risks & Challenges
The energy needed to operate micro-irrigation systems can be a barrier for small and marginal farmers, particularly in regions with unreliable power supply. Additionally, the initial investment cost of these systems can be prohibitive for some farmers. Further, many farmers still lack awareness about the advantages of micro-irrigation and the proper techniques for its utilization. This knowledge gap can lead to suboptimal results and discourage further adoption. The fragmentation of landholdings and declining farm incomes pose challenges to farmers investment capacity in new technologies like micro-irrigation. The Indian agricultural sectors heavy reliance on monsoons and the increasing depletion of groundwater resources highlight the urgent need for water-efficient irrigation solutions.
Drought conditions during the latter part of the monsoon season have led to diminished demand for micro-irrigation products in the Rabi season, affecting the markets overall growth.
Opportunities & Outlook
We are well-positioned to benefitfrom the expanding micro-irrigation market. The company not only caters to the domestic market but also exports micro-irrigation components to various regions globally. Our focus on innovation, coupled with ongoing government initiatives and the escalating need for water-efficient agriculture, are expected to fuel the growth in the coming years. Despite the positive outlook, challenges remain. The micro-irrigation market is highly competitive, requiring us to constantly innovate and differentiate ourselves. Additionally, while government subsidies are a major driver, ensuring their effective utilization and reaching farmers in remote areas remains a focus.
The opportunity lies in the vast untapped potential of the Indian agricultural sector. With the area under micro-irrigation still representing a relatively small percentage of the total irrigated land, theres significant expansion. JISL, with its experience and market presence, is well-placed to contribute to this growth and achieve its ambitious market share target.
2) Biotech Tissue Culture
The global plant tissue culture industry, currently valued at approximately $475 million, is projected to reach $895 million by 2030. In India, over 78 tissue culture laboratories produce around 200 million plants annually. While ornamental plants hold a significant crop propagated through tissue culture. Other prominent commercial crops include pomegranate and strawberry.
The industrys future looks promising, as tissue-cultured planting materials can substantially enhance crop productivity.
Banana, the leading tissue-cultured plant in India, currently accounts for less than 20% of the total crop area. We are a major player in the market with over 50% share, offering quality tissue-cultured banana plants and precision production technology that can boost productivity by 3-6 fold. The continuous demand for banana plants, due to annual or biennial replacements and expansion into new areas, fuels the industrys growth.
Pomegranate, another major tissue-cultured crop, sees us holding over 70% of the market share. The high returns on pomegranate cultivation have driven its expansion into new regions. Pomegranate plants are replaced every 10-12 years, creating a long-term business cycle. Our research and development efforts have reduced the banana crop cycle from 15-18 months to 9-10 months, enabling higher yields and disease resistance. The company produces 120 million banana plants annually, with plans to increase capacity to 150 million.
In the potato sector, the company has ventured into the development and production of high-quality seeds using advanced technologies like aeroponics, net house cultivation, and seed plot techniques. The company has also developed a unique technology for growing potatoes in the air without soil, called "Air Aloo." This year, we expanded our product offerings to include specially developed coffee and black pepper varieties, which were met with strong demand from growers. Building on this success, we are committed to scaling up production and distribution to ensure these high-quality products are accessible to a wider range of growers in the coming season.
We have established a strategic position in sweet orange and mango planting materials by developing innovative high-tech nursery production systems. The company is actively working on various projects to introduce high-quality planting materials for new crops like ginger, turmeric, red onion seeds and other potential crops in the future.
Operational Performance:
The Business contributed about 6.9% to the Companys corporate turnover. The Tissue Culture Revenue has increased by 49.6% in FY 2024 to Rs. 2,642 million from Rs. 1,766 million in FY 2023.. The major benefit of this business is that it acts as a pull effect for MIS/SIS business thereby supporting and enhancing the overall value proposition of the Companys offerings.
Risks & Challenges:
The tissue culture industry faces several challenges, including seasonal plant demand, lengthy propagation cycles, the need for skilled labour, and high unit costs. These factors, coupled with unpredictable precipitation, make it difficult to accurately plan manufacturing schedules and forecast plant material demand. To overcome these obstacles, the industry is actively seeking cost-reduction measures, with a strong focus on automation. The development of affordable, automated systems for mass propagation and efficient robotic transplant manufacturing is becoming crucial for the advancement and sustainability of the industry. 13-15%
Opportunity & Outlook:
Tissue culture has revolutionised crop improvement by enhancing germplasm diversity, improving plant health, and promoting genetic diversity. The integration of specific traits through gene transfer and large-scale micropropagation has significantly benefited various markets. Looking ahead, tissue cultures impact is set to expand further, with the potential to produce commercially valuable variants and improved varieties through somaclonal and gametoclonal variations, cell line selection, and protoplast fusion. This technology will continue to yield disease-free, high-quality plants, maintaining their genetic integrity. Our Hi-Tech nursery, accredited by NHB for premium planting material manufacturing, is at the forefront of this innovation. They are poised to expand their offerings to include agroforestry, ornamental, medicinal, and fruit and vegetable crops. With a commitment to higher yields and improved quality, tissue culture technology is poised to play a pivotal role in shaping the future of agriculture.
Furthermore, recent advancements in gene editing techniques like CRISPR-Cas9 have opened new avenues for targeted crop improvement. Tissue culture serves as a crucial platform for integrating these genetic modifications, enabling the development of crops with enhanced resistance to pests, diseases, and environmental stresses. This convergence of tissue culture and gene editing holds immense promise for sustainable agriculture and food security in the face of climate change and a growing global population.
We believe, tissue culture technology, along with recent breakthroughs in gene editing, is revolutionizing crop improvement by enhancing genetic diversity, producing disease-free plants, and enabling the development of crops with improved traits. Our Hi-Tech nursery is well-positioned to leverage these advancements, contributing to a more resilient and productive agricultural landscape.
B) Plastic Products
Revenue from the domestic Plastic Products division has increased by 29.4% in FY 2024 to Rs.16,149 million from Rs.12,480 million in FY 2023. The revenue from export of Plastic division has decreased by 15.6% in FY 2024 to Rs. 1,702 million from Rs. 1,472 million in FY 2023. The Company manufactures and offers PVC Pipes & Fittings, plumbing systems, PE Piping and PVC sheets.
a) PVC Piping Industry:
The Indian plastic pipe industry is poised for a robust growth trajectory, fueled by sustained demand driven by increased government spending on crucial sectors like water supply, irrigation, housing, and infrastructure development. The industry anticipates a significant year-on-year volume growth in the next fiscal year.
Polyvinyl chloride (PVC) pipes remain a cornerstone of the industry, favored for their affordability and versatility. The cost-effectiveness of PVC water pipes, compared to traditional materials like steel or concrete, makes them an attractive choice for consumers across various applications.
Chlorinated polyvinyl chloride (CPVC) pipe manufacturers are also witnessing a surge in demand, particularly for hot and cold water supply systems. CPVC pipes have gained popularity due to their exceptional resistance to heat and corrosion, making them ideal for demanding applications. The outlook for the plastic pipe industry in India is decidedly optimistic. With the governments emphasis on infrastructure development, industrial expansion, and water conservation initiatives, the demand for plastic pipes is expected to soar. This heightened demand is likely to spur technological advancements and innovation in manufacturing processes, ultimately leading to even higher quality products and potentially lower prices for consumers. Its worth noting that while the plastic pipe industrys growth prospects are encouraging, challenges such as fluctuating raw material prices and environmental concerns regarding plastic waste disposal need to be addressed for sustainable development.
Overall, the Indian plastic pipe industry is well-positioned for continued expansion, driven by government initiatives, rising consumer demand, and technological advancements. The sectors focus on affordability, durability, and innovation is set to shape the future of water infrastructure and plumbing systems across the country.
Operational Performance:
During FY 2024, this division contributed about 23.6% to the Companys turnover. The revenue from PVC has increased by 15.7% to Rs.9,013 million in FY 2024 from Rs7,789 million in FY 2023. The revenue from the domestic market for PVC Pipe has increased by 14.6% in FY 2024 to Rs.8,491 million from Rs7,411 million in FY 2023.
Risks & Challenges:
The availability of substitutes for PVC pipes, such as steel, to PVC pipe HDPE, and PEX, presents a significant manufacturers. These alternative materials offer distinct advantages in certain applications, potentially eroding the market share of PVC.
While these alternatives pose a competitive threat, its important to note that PVC pipes still maintain a strong position in the market due to their affordability, ease of installation, and versatility. However, the growing adoption of substitute materials necessitates PVC manufacturers to innovate and adapt to maintain their market share.
Apart from the competitive landscape, the plastics pipe industry faces other challenges including Labor-Intensive
Machinery, Erratic Power and High Energy Prices, Transportation and Handling Challenges, Maintaining High Standards While the plastics pipe industry, particularly PVC pipe manufacturers, faces numerous challenges, these obstacles also present opportunities for growth and innovation. Embracing technological advancements, investing in sustainable practices, and adopting robust quality control measures can help PVC manufacturers not only navigate the competitive landscape but also thrive in a dynamic market.
Opportunity & Outlook:
With growing awareness among consumers and farmers challenge about the durability and BIS standards of plastic pipes, theres a clear shift towards high-quality pipes to minimize water wastage. The affordability, superior quality, and longevity of PVC pipes have contributed to their rising popularity.
Amongst the key growth drivers, we note that the
Government Initiatives like Jal Jeevan Mission, Pradhan
Mantri Awas Yojana (Housing for All), AMRUT, Swatch Bharat Abhiyan, and the development of Smart Cities are significantly boosting the demand for PVC pipes in India coupled with International Projects and Replacement the growth Demand provides a significant of the product market. Further, the PVC pipe industry is poised for sustained growth. Market consolidation, stable PVC prices, and emerging opportunities in the infrastructure pipe segment are all positive indicators. Furthermore, the governments strong emphasis on infrastructure development in the budget and the resumption of construction activities are expected to further accelerate growth. The PVC pipe industry is experiencing a promising phase, driven by government initiatives, growing demand, and a focus on quality and innovation. The company is well-positioned to leverage these favorable conditions and contribute to the development of the industry.
b) PE Piping
Industry:
The global High-Density Polyethylene (HDPE) pipe market is experiencing robust growth, projected to reach $26.5 billion by 2025, with a steady 5% CAGR since 2018. Several key factors like Agricultural Demand, Infrastructure Investment, Urbanization and
Construction Boom, Aging Infrastructure Replacement, Rising Industrial Output and Wastewater Management are fueling this expansion. These factors collectively create a positive outlook for the HDPE pipe market, with continued growth expected in the coming years. As the world focuses on sustainable infrastructure development and efficient resource management, HDPE pipes are well-positioned to play a crucial role in meeting these demands.
Financial Performance:
This business contributed about 20.5% to the Companys corporate turnover. The revenue from PE Piping has increased by 45.1% to Rs.7,830 million in FY 2024 from Rs 5,398 million in FY 2023. The revenue from domestic PE Piping has increased by 52.2% in FY 2024 to Rs.7,530 million from Rs. 4,947 million in FY 2023.
Markets:
Risk and Challenges:
Project execution delays remain a significant the HDPE pipe industry. This issue, coupled with consumer confusion regarding quality standards, necessitates a renewed focus on innovation and adherence to stringent manufacturing protocols.
While HDPE pipes offer superior resistance to most chemicals and solvents, their susceptibility to stress cracking and combustion risks underscores the need for advanced production capabilities. Manufacturers must prioritize the development of state-of-the-art pipes that not only meet but exceed existing quality benchmarks.
The transition from traditional materials like steel and concrete to HDPE pipes is hindered by resistance to adapting technical standards. However, a notable shift in industry mindset signals a promising trajectory for HDPE pipe adoption. To remain competitive, manufacturers should invest in research and development to enhance the durability and performance of HDPE pipes. A proactive approach to educating consumers about the benefits and limitations of HDPE pipes will further drive market acceptance. Additionally, collaboration with regulatory bodies to streamline the standardization process can accelerate the widespread adoption of HDPE pipes in various applications. By addressing these challenges head-on, the industry can unlock the full potential of HDPE pipes and solidify its position as a leading material for sustainable infrastructure development.
Opportunity and Outlook:
The Indian HDPE (High-Density Polyethylene) Pipes Market is experiencing robust growth, projected to reach impressive significant compound annual growth rate (CAGR). HDPE pipes are findingincreasing applications across diverse sectors, including gas transit, agriculture irrigation, drinking water supply, sewage systems, city gas distribution, and chemical & processing industries.
Rapid urbanization and a growing population are driving the expansion of the construction sector, subsequently boosting the demand for pipelines and fostering the growth of the HDPE pipes market. Government initiatives such as the Jal Jeevan Mission (JJM), aimed at providing piped water connections to all rural households, are playing a competition, leading to pivotal role in driving market growth. The focus on upgrading wastewater treatment infrastructure, combined with government schemes like PMKSY, is providing additional momentum to the sector. The expansion of gas distribution networks, increased agricultural activities, and the rising number of housing units are all contributing to the growth opportunities for the HDPE pipes market.
Overall, the Indian HDPE Pipes Market is poised for sustained growth in the foreseeable future, driven by a combination of factors such as rapid urbanization, government initiatives, infrastructure development, and technological advancements.
c) PVC Sheets Industry:
The PVC foam board and sheet market is experiencing billion by significant
2026, driven by a 4.06% annual growth rate. Its high quality, water and corrosion resistance, and eco-friendly properties are key factors in its increasing adoption across various industries. PVC sheets are replacing traditional wood in applications like doors, furniture, advertising, and shelving, due to their versatility and durability. This demand is further fueled by their use in control panels, wall cladding, displays, and structures resistant to corrosive environments.
Wood Polymer Composite (WPC) is another burgeoning market, expected to reach $9.03 billion by 2027 with an
8.57% CAGR. WPCs strength, fire, moisture, and corrosion resistance, coupled with its eco-friendly nature, make it a preferred alternative to wood and plywood. Its versatile applications, spanning construction, automotive, and marine sectors, contribute to its growing demand.
Both PVC foam boards and WPC sheets are at the forefront of innovation, with emerging technologies and new product offerings driving their adoption. Their combined benefits of sustainability, durability, and versatility position them as leading materials in the evolving landscape of construction and manufacturing.
Operational Performance:
The business contributed about 2.3% to the Companys corporate turnover. The business has increased by 31.6% to Rs.1,008 million in FY2024 from Rs..765 million in FY2023. This is a small segment for the Company currently, but in coming years Company would like to focus on this given improved financial position.
Markets:
Risks and Challenges:
PVC (Polyvinyl Chloride) sheets have experienced rapid growth in recent years, emerging as a popular choice for panel products due to their versatility, durability, and cost-effectiveness. However, the influx of unorganized players into the market has intensified concerns about maintaining high-quality standards. The PVC sheet market is currently witnessing a surge in demand, driven by the construction and renovation sectors.
However, several challenges that hinders the industrys potential include Unorganized Sector, Quality Control,
Alternative Materials and Environmental Concerns.
Market Outlook:
Despite the challenges, the PVC sheet market continues to hold significant growth potential. The demand for lightweight, durable, and moisture-resistant panel products is expected to rise, especially in emerging economies with booming construction sectors. By addressing the concerns surrounding quality and sustainability, the PVC sheet industry can position itself for long-term success.
Opportunity and outlook:
The global PVC foam board market is experiencing rapid expansion, fueled by growing recognition of its potential and environmental advantages. This growth is particularly pronounced in emerging economies like India, China, Indonesia, Malaysia, Vietnam, Singapore, and Thailand. Factors contributing to this surge include Increasing demand for plastic sheets due to versatility in the material, Rapid industrialization, Changing demographics and Government initiatives. Overall, the confluence of these factors propels the PVC foam board markets growth in numerous regions.
3) Agro-Food Processing
JFFFL is well-positioned for continued growth, leveraging Indias thriving economy and expanding food processing sector. Despite a temporary setback due to the COVID-19 pandemic, Indias GDP has consistently shown strong year-on-year growth over the past three decades. The food processing sector, projected to reach US$ 535 billion by 2025-26, is a key driver of this growth. Indias strategic location provides advantageous access to major international markets, further enhancing JFFFLs global reach.
The companys focus on the packaged food segment aligns with the sectors impressive 10% CAGR and estimated value of Rs 4,000 billion. JFFFLs participation in the booming spices sector, particularly in dehydrated onion and garlic, demonstrates its commitment to high-growth categories. The companys active involvement in Indias fruit processing sector, experiencing an annual growth of 7-8%, further strengthens its position in the market.
While JFFFLs international operations face unique challenges, the company has successfully navigated these issues. In Turkey, JFFFL has effectively managed the volatile economic situation characterized by high inflation and interest rates. Despite softening demand due to rising interest rates and inflation in mainland European markets,
JFFFLs Belgium operations continue to perform well. In the UK, JFFFLs business is recovering from the impact of
COVID-19 and adapting to the current economic challenges of high interest rates and inflation. The US market remains robust for JFFFL, although cost inflation poses a challenge. Overall, JFFFLs diversified portfolio, strong market presence, and ability to adapt to changing economic conditions position it for a promising future in the global food processing industry.
Products
The Company under its brand, Jain Farm Fresh, offers dehydrated onion and vegetable products, aseptic fruit purees, concentrates, clarified juices, individually quick frozen (IQF) and frozen products of premium quality. Valley
Spice has been created to give consumers the real taste of spice in its most pure and authentic form.
Operational Performance
The business has grown by 3.5% to USD 210 million in FY2024 from USD 203 million in FY2023.
Markets
The Company has two plants in India and one in the US, with total capacity to manufacture 34,700 MT of product. It caters to major players in dehydrated soups and ready to eat/cook products in 28 countries.
Risk & Challenges
Our primary concerns continue to revolve around unpredictable crop conditions, adverse weather events affecting both yield and quality, escalating production costs due to inflation, a softening in consumer demand, and rising expenses across the supply chain from origin to market. The ongoing high interest rate environment further complicates matters.
While our unwavering commitment to delivering premium products remains a cornerstone of our strategy, we acknowledge the competitive pressure from lower-priced alternatives that may compromise on quality.
Opportunities & Outlook
JFFFL is poised for growth, capitalizing on existing and emerging opportunities with both our loyal customer base and potential new markets. By increasing production volumes and reducing unit costs, we will deliver exceptional value to our customers while simultaneously fortifying our business foundation.
We are committed to enhancing yield at every stage, from farm to processing, and to optimizing costs across our operations. This strategic focus allows us to remain competitive, providing thought leadership and innovative solutions in the markets we serve.
Despite the ever-changing business landscape, we maintain a bullish outlook, armed with robust, adaptable plans for the coming years. JFFFLs agility and responsiveness will ensure continued success in a dynamic environment, enabling us to seize opportunities for sustained growth and deliver on our commitment to value creation.
4) Risks and concerns at corporate level
Our company operates in the dynamic agricultural and manufacturing sectors, facing a diverse array of risks including commodity price fluctuations, seasonal agricultural variations, foreign exchange rate volatility, capacity utilization challenges, regulatory uncertainties, and liquidity concerns. Despite these complexities, our robust risk management strategies have enabled us to maintain growth, enhance margins, and expand our market share even amid recent pandemic and war-related economic turbulence.
Heres a breakdown of our top six risks and our corresponding mitigation approaches:
Operating Risks:
1) Operation and Maintenance: We uphold the highest operational standards through state-of-the-art equipment and a dedicated, skilled workforce at all our locations. Our experienced personnel ensure seamless routine operations and maintenance across our facilities.
2) Raw Material Prices: Given the absence of hedging instruments for plastic resins, we currently do not hedge against price fluctuations. However, we closely monitor market trends and adjust our pricing and procurement strategies accordingly.
3) Lower Capacity Utilization: Seasonal variations, competition, and the underperformance of government programs like RKVY can lead to reduced capacity utilization. To address this, we proactively diversify our product portfolio, explore new markets, and optimize our production processes.
Market Risks & Opportunities:
4) Demand: We leverage a robust Management Information System (MIS) to track market trends, consumer preferences, and emerging opportunities. We actively participate in government initiatives like the PMKSY to expand our reach and tap into the growing demand for micro-irrigation solutions. Additionally, we capitalize on the increasing focus on water infrastructure development through programs like Jal Swarajya, Jal
Nirmal, and AMRUT, promoting our plastic products. We also recognize the immense potential of tissue culture saplings in Indias agricultural landscape and are strategically positioned to meet the rising demand.
5) Interest Rate and Foreign Exchange Risk: We closely monitor interest rate projections and assess their potential impact on our cash flows. We also keep close watch on FX rates and its impact. Our proactive approach includes continuous efforts to deleverage our balance sheet and optimize working capital management. We hedge foreign exchange risk by taking adequate forward covers.
6) Payments and Overdue Outstanding: Recognizing the challenges posed by delayed subsidy payments from state governments, we have transitioned from a subsidy model to a cash-and-carry model. Furthermore, we have initiated community-based turnkey irrigation projects, focusing on supply rather than implementation. This strategic shift, coupled with our strong dealer network, allows us to prioritize retail business and maintain a healthy cash flow.
In conclusion, our comprehensive risk management plan, which includes regular reviews and adjustments in response to evolving market dynamics and internal operations, is the cornerstone of our resilience and continued success. We remain committed to navigating the complexities of the agricultural and manufacturing sectors, leveraging opportunities, and mitigating risks to deliver long-term value to our stakeholders.
5) Analysis of the Standalone financial performance a) Net Sales
| Business | 22023-24 | 2022-23 | Change absolute | Change % |
| Hi Tech Agri | 20,010 | 21,862 | (1,852) | 8.47% |
| Input Products | ||||
| Division | ||||
| Plastic Division | 17,850 | 13,952 | 3,898 | 27.94% |
| Other Division | 351 | 321 | 30 | 9.35% |
| Total Revenue | 38,211 | 36,135 | 2,076 | 5.75% |
| Domestic | 34,774 | 32,611 | 2,164 | 6.64% |
| Export | 3,437 | 3,524 | (87) | (2.47%) |
Total revenue of the Company on a standalone basis has increased by 5.7% to Rs. 38211.40 million in FY 2024 vis-a-vis Rs. 36134.90 million in FY 2023.
Companys total domestic revenue has increased by 6.6% for FY 2024 to Rs.3,4774.38 million from Rs. 32610.79 million in FY 2023. The revenue from exports has decreased by 2.5% in FY 2024 to Rs. 3437.02 million from Rs.3524.11 million in FY 2023.
i) Hi Tech Agri Input Products Division:
Revenue from sales of Companys Hi-Tech Agri Input Products has decreased by 8.5% in FY 2024 to Rs.2,0010.16 million from Rs.21,861.67 million in FY 2023 mainly due to Decrease in project sales. Domestic Hi-Tech Agri Input Products have decreased by 7.8% to Rs. 18,274.68 million in FY 2024 from Rs.19,810.49 million in FY 2023, mainly due to reduction in project sales.
ii) Plastic Products:
Revenue from the Plastic Products division has increased by 27.9% in FY 2024 to Rs.17,850.18 million from Rs.13,952.36 million in FY 2023. The revenue from domestic Plastic division has increased by 29.4% in FY 2024 to Rs.16,148.64 million from Rs.12480.42 million in FY 2023.
iii) Other Division:
Other divisions include Solar Water Heating systems, Solar Photovoltaic Systems, and Agricultural products. Revenues from other division has increased by 9.4% in fiscal 2024 toRs. 320.87 million from Rs 351.06 million in FY 2023.
b) Raw material consumption
| Particulars | 31st Mar 2024 | 31st Mar 2023 | Change absolute | Change % |
| Polymers, | 21,442.95 | 22,003.14 | (560.19) | 31.85% |
Chemicals & additives, packing material etc. Raw material consumption has decreased by 2.55%, due to change in product mix.
c) Other Expenses
| Particulars | 31st Mar 2024 | 31st Mar 2023 | Change absolute | Change % |
| Other Expenses | 8,008.41 | 7,760.97 | 247.44 | 3.19% |
Expenses
Other Expenses were increased by 3.19%, mainly due to increase in power and fuel by 21.85%, agency charges for installation by 15.96%, provisions for bad and doubtful debts by 157.24% d) Employee Benefit Expenses
| Particulars | 31st Mar 2024 | 31st Mar 2023 | Change absolute | Change % |
| Employees benefit expenses | 3,218.21 | 2,874.59 | 343.62 | 11.95% |
Employee cost has increased by 11.95% due to increase in basic salary of associates.
e) Finance Costs
| Particulars | 31st Mar 2024 | 31st Mar 2023 | Change absolute | Change % |
| Interest Exp | 2,734.41 | 3,501.71 | (767.30) | (21.91)% |
| Bank | 188.09 | 127.68 | 60.41 | 47.31% |
| Charges | ||||
| Total | 2,922.50 | 3,629.39 | 706.89 | (19.48)% |
The overall Finance Cost has decreased by 19.48% in FY24 as compared to FY23 mainly due to repayments of term borrowings.
f) Fixed Assets
| Particulars | 31st Mar 2024 | 31st Mar 2023 | Change absolute | Change % |
| Gross | 47,426.77 | 46,141.64 | 1,285.13 | 2.79% |
| Block(net of disposal) | ||||
| Less: | 20,032.96 | 18,776.31 | 1,256.65 | 6.69% |
| Depreciation | ||||
| Net Block | 27,393.81 | 27,365.33 | 28.48 | 0.10% |
Gross block of Fixed Assets has increased by Rs. 1,285.13 million during FY 24. The increase is mainly due to addition in Plant and Equipment Rs.377.31 and orchards Rs. 453.87 million (net of disposal).
g) Investments Rs. ( in Million)
| Particulars | 31st Mar 2024 | 31st Mar 2023 | Change absolute | Change % |
| Investment in Wholly owned subsidiary (WoS)/ Subsidiary/ Step Down Subsidiary Company | 13,011.08 | 13,011.08 | - | - |
| Other | 612.48 | 612.48 | - | - |
| Investment | ||||
| Total | 13,623.56 | 13,623.56 | - | - |
There is no change in the Investments made in the Subsidiaries and associates. h) Inventories Rs. ( in Million)
| Particulars | 31st Mar 2024 | 31st Mar 2023 | Change absolute | Change % |
| Inventories | 8,954.04 | 8,93403 | 20.01 | 0.22% |
| (incl. Biological assets) |
The overall inventory has remained flattish.
i) Trade Receivables Rs. ( in Million)
| Particulars | 31st Mar 2024 | 31st Mar 2023 | Change absolute | Change % |
| Gross | 24,019.21 | 24,508.91 | (489.7) | (2.00)% |
| Receivables | ||||
| Particulars | 31st Mar 2024 | 31st Mar 2023 | Change absolute | Change % |
| Less: | 4,135.34 | 3,748.74 | 386.60 | 10.31% |
| Impairment allowances | ||||
| Net | 19,883.87 | 20,760.17 | 876.30 | (4.22)% |
| Receivables |
an increase in impairment allowances of Rs. 386.60 million mainly on account of Govt. & Project Receivables.
j) Short Term Loans and Other Current Assets (Rs. in Million)
| 2024 | 2023 | absolute | % | |
| Short Term | 5,120.59 | 5,894.59 | (774.00) | (13.13)% |
| Loans & other current assets |
Short Term Loans & Other Current Assets have decreased by 13.13% mainly due to decrease in balance with government authorities by Rs. 694.25 million and contract related assets by Rs. 425.74 million.
k) Current Liabilities (Rs. in Million)
| Particulars | 31st Mar 2024 | 31st Mar 2023 | Change absolute | Change % |
| Current Liabilities | 25,814.31 | 27,522.19 | (1,707.88) | (6.21)% |
Current Liabilities have decreased by Rs.1,707.88 million
- to Rs.25,814.31 million for FY 2024 from Rs.27,522.19 million for FY 2023 mainly due to decrease in trade payable by Rs. 649.48 million and other financial and current liabilities by Rs. 495.17 million.
l) Long Term Borrowing (Rs. in Million)
| Particulars | 31st Mar 2024 | 31st Mar 2023 | Change absolute | Change % |
| Long Term | 9,878.92 | 11,906.11 | (2,027.19) | (17.03)% |
| Borrowing (incl. the current maturities |
The Long Term Borrowing has decreased by 17.03% to
Rs. 9,878.92 in FY 2023 from Rs. 11,906.11 million in FY 2023 due to repayment of the term liabilities.
m) Shareholders Fund
| Particulars | Equity Capital | Premium Share | Other Reserves | Retained | Money recd agst share warrants | Total |
| Balance as on 1st April 2023 | 1,247.80 | 18,344.19 | 3,948.64 | 21,928.48 | 453.43 | 45,922.62 |
| a) Allotted during the year | 125.64 | 1,688.05 | - | - | - | 1,813.69 |
| b) Share option outstanding | - | - | - | - | - | - |
| b) Profits for the year | - | - | - | 555.50 | - | 555.50 |
| c) Dividend paid (incl. dividend tax) | - | - | - | - | - | - |
| d) Adjustments | - | - | - | (0.03) | 45.47 | 45.44 |
| Sub Total (a to d) | 125.64 | 1,688.05 | - | 555.47 | 45.47 | 2,414.63 |
| Balance as on 31st March 2024 | 1,373.52 | 20,032.24 | 3,948.64 | 22,483.95 | 498.903 | 48,337.25 |
Increase in Equity share capital and share premium by Rs.24.08 million and Rs.323.53 million due to issue 12,040,623 Equity share to domestic and foreign lenders and individual investor.
n) Dividend (Rs. in Million)
The Board has not proposed to pay dividend on Ordinary Equity Shares and DVR Equity Shares for the FY 2024.
| Business | 2023-24 | 2022-23 | Change absolute | Change % |
| Equity | - | - | - | - |
| Dividend |
7) Internal Control Systems
Our robust internal control framework, overseen by management, ensures the safeguarding of assets and the accuracy of financial reporting. We utilize agile budget control mechanisms, continuously evaluating actual performance against evolving operational needs, allowing for efficient resource allocation.
A comprehensive internal audit program, encompassing all areas of activity, identifies and addresses emerging risks and opportunities. Quarterly reports are presented to the Audit Committee, ensuring transparency and accountability, while fostering collaboration to resolve any issues.
Our commitment to innovation is reflected in our contemporary business rules, procedures, authority levels, and organizational structures. These adaptable frameworks empower our teams to make informed decisions swiftly, enabling us to respond effectively to the dynamic business landscape. By fostering a culture of continuous improvement, we ensure that our internal control environment remains relevant, responsive, and aligned with evolving ESG requirements.
8) Human Resources
At JISL, our people are the heart and soul of our financial success. Were not just building a workforce; were nurturing a dynamic community of talent, inspired by our founders philosophy: Innovate, Adapt, and Thrive.
Within our walls, we ignite the spark within each individual, empowering them to reach their full potential.
Our unwavering commitment to maintaining a high-performance organization drives our numerous projects designed to unleash the potential of our supervisory and managerial teams. We not only provide them with the tools they need but also empower them to transform aspirations into realities and responsibilities into accomplishments.
JISL is a breeding ground for innovation, where we cultivate not just exceptional individuals, but a thriving high-performance work culture. We seamlessly integrate progressive training programs, performance-driven incentives, and adaptable production systems.
To stay at the forefront of the evolving global landscape, our HR practices reflect the latest trends:
People Analytics: We utilize data-driven insights to inform decision-making across the employee lifecycle, from recruitment and onboarding to performance management and succession planning. This enables us to identify trends, predict future needs, and optimize workforce strategies.
Employee Experience: We prioritize creating a positive and engaging employee experience through personalized development plans, flexible work arrangements, and a culture of open communication and feedback. By investing in our employees well-being and growth, we foster a sense of belonging and loyalty.
Diversity, Equity, and Inclusion (DEI): We actively promote DEI initiatives to ensure a workplace where everyone feels valued and respected. This includes diverse representation at all levels, unconscious bias training, and inclusive hiring and promotion practices. We believe a diverse workforce brings a wider range of perspectives and ideas, fuelling innovation and creativity.
Agile HR: We embrace agile methodologies to adapt quickly to changing business needs. This involves breaking down traditional HR silos, fostering cross-functional collaboration, and implementing flexible HR processes. By being agile, we can respond effectively to new challenges and opportunities.
Artificial Intelligence (AI) and Automation: We leverage AI and automation technologies to streamline HR processes, such as recruitment, onboarding, and benefits administration. This frees up HR professionals to focus on strategic initiatives and provide more personalized support to employees.
By embracing these contemporary HR trends, JISL continues to foster a high-performance culture that attracts and retains top talent, drives innovation, and ensures sustainable growth. Our commitment to our people and their development is unwavering, and we believe this is the key to our continued success
Disclaimer
The Management issues a warning that some of the aforementioned statements are directional and forward-looking, management estimates and may not represent the accuracy of the underlying predictions as they depend on a number of variables, some of which may be beyond the managements control.
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