The Jain Irrigation Systems Ltd stock has fallen by 14% since it announced its June quarter earnings last week. For the first time in many quarters, the company reported a loss because of a combination of poor revenue growth and higher interest expenses.

For the June quarter, Jain Irrigation’s total revenue declined by 9% over the same period last year to 865 crore. A key reason for the decline in sales is because of a drop in the revenue from the micro-irrigation systems (MIS) business.

Anil Jain, managing director, Jain Irrigation Systems Ltd.
Prajakta Patil/Mint

Also See | Losing Favour (PDF)

These expenses, along with higher interest outgo and a mark-to-market notional forex loss led to the company posting a loss of 17 crore against a net profit of 82 crore in the same period last year.

Also See | Jain Irrigation Systems (PDF)

Jain Irrigation’s much-awaited non-banking financial company is finally expected to see the light of the day in October and investors would do well to track developments on that front. But in the short run, poor sales growth is likely to play spoilsport for earnings.

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