Mumbai: Jain Irrigation Systems posted a slight fall in net profit in April-June but earnings are likely to improve in the second half of FY11 on better capacity utilisation and contribution from overseas units, a top official said on Monday.
The diversified company posted a net profit of Rs52.31 crore compared with Rs55.59 crore on account of forex losses while net sales grew Rs721 crore from Rs567 crore posted a year ago. The company also approved a 5-for-1 stock split.
Jain Irrigation makes micro irrigation systems, plastic pipes and sells mango pulp and dehydrated onions.
“Current quarter (July-Sept) growth would be less because it is raining quite a lot,” Managing Director Anil Jain said over the telephone from his manufacturing unit in Jalgaon.
“But third and fourth quarter will compensate for that because with good monsoon farmers make money and if they make money, they are able to invest also. So, it makes a lot of difference,” he added.
Micro-irrigation was the highest contributor in the firm’s April-June topline but its agro division did not perform as per expectations due to delayed mango arrivals, Jain said.
“There was not enough time to process the mangoes. But in the third and fourth quarter you would see much larger growth in that segment because of seasonality,” he said.
Jain, which supplies mango pulp to Coa Cola, expects its agro division to grow by 15-20% from Oct-Dec quarter compared with 11% in April-June.
He also expects its overseas subsidiaries to start contributing to the bottomline from this year.
The company maintained its revenue guidance to top 30% in FY11 but could review in December, Jain said.
Besides, it is also planning to invest about Rs50 crore by March 2011 to set-up a new unit in Himachal Pradesh as it looks to increase its micro-irrigation capacity.
Shares in firm ended up 0.44% at Rs1,289.35 in a firm Mumbai market.