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Angel Broking keeps BUY on Jain Irrigation

Angel Broking keeps BUY on Jain Irrigation
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First Published: Wed, Aug 06 2008. 01 33 PM IST

Updated: Wed, Aug 06 2008. 01 33 PM IST
Jain Irrigation (JISL) has reported healthy numbers for Q1FY09 with revenues spurting 44.9% y-o-y to Rs474.3 crore (Rs327.4 crore) backed by healthy growth in Micro Irrigation (MI), PVC Pipes and Fruit Processing segments.
Although the company faced pressure from high resins (derivative of crude oil and a primary raw material for JISL) prices, it was able to contain other operating expenditure, which resulted in OPMs improving by 250bp to 19.5% (17.0%).
PAT increased 4.7% to Rs29.6 crore (Rs28.2 crore) on account of provisioning for forex losses of Rs22 crore during Q1FY09 versus forex gains of Rs9.4 crore during Q1FY08. PAT, excluding the extra-ordinaries, jumped a whopping 154.7% to Rs51.6 crore (Rs20.3cr) delivering a stellar performance.
The MI segment, which contributes significantly to OPMs, delivered a superior performance, which we believe is a positive. We believe that the company will be able to sustain such a performance going ahead as well and hence remain positive on the company.
The stock is currently trading at 13x FY10E FDEPS of Rs39.9 crore. We maintain a BUY on the stock, with a target price of Rs679.
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First Published: Wed, Aug 06 2008. 01 33 PM IST
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