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Home > Business > Special

FY07 EPS seen at Rs 18-20

June 29, 2006

Jain irrigation has come out with a very strong set of numbers. MD at Jain Irrigation, Anil Jain, says that the growth of the micro irrigation division is likely to double that of last year. He further adds that they are looking at an EPS of Rs 18-20 for FY07.

Excerpts with CNBC-TV18's exclusive interview with Anil Jain:

How has your micro irrigation pipes and plastics business done individually, which one has contributed to this growth?

Overall, I think micro irrigation has contributed 24 per cent of this revenue, but in the division we had 76 per cent growth compared to last year. PE-piping, especially due to infrastructure, grew 177 per cent contributing about 17 per cent of the total revenue. Plastic sheet exports were up by 35 per cent, with contribution of about 20 per cent of overall revenue.

So as a company, we have had 42 per cent growth, and we grew from Rs 605 crore (Rs 6.05 billion) to Rs 859 crore (Rs 8.59 billion) in net sales, with EBITDA rising 49 per cent. Net profit doubled from Rs 32 crore (Rs 320 million) to Rs 67 crore (Rs 670 million) approximately.

Where does the order book stand for both these segments of micro irrigation and pipes, how much is executable in the next three quarters?

The order book for micro-irrigation alone is about Rs 850 crore (Rs 8.5 billion), and for the current quarter, we see growth, which is double compared to last year, on a similar time basis. Hence we expect this division to grow this year at almost double; on the basis of last year's 76 per cent growth, this year we expect it to double.

Overall for your businesses consolidated revenues, what can you deliver this year in terms of revenue and EPS?

Our internal budgeting looks like we should exceed 50 per cent revenue target in terms of growth compared to last year, which is closer to Rs 1,350 crore (Rs 13.5 billion) plus, and in terms of net profit we are looking at repeating the performance we had this year, where we ended up doubling our net this year compared to last year on a 40 per cent growth on sales. Next year possibly we will do similar thing.

We are targeting an EPS of about Rs 18-20 as against Rs 10.50 this year.

Could you give us more details on your capacity expansion plans?

Out of this FCCB that we raised - $60 million in March, we are using that to raise capacities across all divisions. This would make us the largest plastic processor between pipes and sheets on one hand and it will also increase our mango processing capacity substantially. Most of these capacities will kick in by Q3 and Q4 of this year. So we will have a partial benefit of that this year, although majority of the benefit will come next year.

In totality with all these capacities in place, which should happen by December, at full utilization of those capacities, we will ramp up to a level of about Rs 2,200 crore (Rs 22 billion) or so a year after that.

The company which you recently acquired, Terra Agro has Rs 1,200 crore of land in Coimbatore. Are there any plans of developing or processing that land since SEZ is a fashionable word now days?

Yes, but we are not looking at fashion per se. We don't have the herd mentality. Just because everybody is thinking about it, within SEZ, these agri-SEZ's or agri-exports zones, we as a company are already into export of food processing and vegetable dehydration etc.

So looking at our integrated value chain approach to agriculture, this is something we are looking at, because there is such a large amount of land available at one location and also the fact that it is well irrigated and located near Coimbatore from where there are now flights to Europe etc.

Therefore we are looking at a possibility and have not yet taken any decision. But we are just exploring in terms of research, on whether it might be a good idea to have an AEZ there.

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