Particulars	Q2FY2013	Q2FY2012
Revenues	603	750
EBITDA	122	180
Exchange Rate Gain/(Loss)	28	(59)
Finance Charges	102	88
PBT	20	14
PAT	36	12

Jain Irrigation, the largest Micro Irrigation Company in the country and the second largest globally, has announced better standalone results for the quarter ended 30th September 2012. The net sales for the quarter were at Rs.603 crores a decline of 19.6% (against corresponding quarter net sales in FY 2012 at Rs.750 crores). Tissue Culture & Green Energy businesses have been the star performers, recording a growth of 20% and 110%, albeit on a small base. Under a planned slow down of Micro irrigation Business (MIS) sales were lower by 33.7% in Q2. The agro products revenue was down by 21.8%, mainly on account of lower raw material prices of mangoes and higher proportion of Totapuri Mango products sales which has lowered sales value as compared to Alphanso Mango products.

Overall exports for the Company declined by 38% at Rs.136.50 crores due to weak demand from European markets and deferred shipments from Middle East customers. Overall the finance cost was still high at Rs.102 crores. PAT was higher at Rs.36 crores up by 313%, mainly on account of foreign exchange gains due to appreciation of Indian Rupee against US Dollar & Other Currencies.

The Board also approved standalone unaudited results H1 FY 2013. The net sales for the half year were at Rs.1,447 crores declining by 14% (against net sales of Rs.1,682 crores in FY 2012). Pipe business grew by 18%, Agro Processing business recorded a value de-growth of 14% (Vs quantity growth of 20.80%), Tissue Culture & Green Energy have been the star performers, recording a growth of 42% and 36% during H1 FY 2013. Micro Irrigation business degrew by 33% as a part of Company’s strategy to evolve new business model which entails dealers & farmer’s commitment to pay entire systems cost themselves and resultantly addresses the high Government subsidy receivable issue and creates sustainable long term growth prospect of MIS business.

Corporate EBIDTA for the half year was at Rs.301 crores (corresponding quarter FY 2012 Rs.408 crores). Decline has been due to lower absolute contribution from Micro Irrigation business with lower sales mix in overall business of the Company. Net profit for the half year was down by 80% at Rs.19 crores (against net profit of Rs.94 crores in H1 FY 2012) primarily due to notional foreign exchange losses.

Company looks forward to a better second half, which traditionally accounts for 65% of annual business, with positive growth momentum. While overall monsoon is below par in some of the States, drought like situation in certain agriculture areas and resultant lack of water availability in these areas is an area of concern. Company will continue its focus on balance sheet improvement with further reduction in subsidy backed receivables and improved gearing. Company also expects higher acceptance from dealers / farmers towards changed business model going forward. Recent equity infusion and new long term loans has addressed liquidity issues & balance sheet structuring for Company and has given positive start for the busy season

Company has Order Book of about Rs.775 crores across all Divisions.

Mr Anil Jain, Managing Director of the Company said after the meeting of Board for announcing the results, “the challenges faced in Q1 FY 2013 continued in Q2 as monsoon was erratic in distribution and mostly below par in the major Micro Irrigation sales geography for the Company. Subsidy receivable situation has improved, especially in Maharashtra. The start of Sustainable Agro-commercial Finance Limited (NBFC arm) operations shall help to rebuild growth in Micro Irrigation business.

As we said earlier this year, we have been through a perfect storm due to multitude of factors of high interest, FOREX issues, high polymer prices, slow collection of subsidy receivables and resultant stress of on liquidity etc. apart from deliberate slow growth in Micro Irrigation business amid general economic slowdown affecting other businesses of the Company.

Undeterred by these factors, we have maintained study focus on addressing structural as well as situational issues so as to find long lasting solutions.

I believe with significant long term fund raise of about USD 200 Million, in mix of equity, ECB & FCCB, we have addressed issues of liquidity, foreign exchange volatility and interest cost. We have significantly improved net subsidy collections by Rs.248 crores over last 6 months thus improving our receivable positions. Launch of our NBFC, Sustainable Agro-commercial Finance Limited (SAFL) is another strong step to resolve twin issue of lower receivable and sustainable growth.

The situation has started improving and deleveraging of the balance sheet as well as resultant rerating of the Company in FY 2013 will help us to build a strong base for sustainable growth of business in the coming quarters”.

About Jain Irrigation (www.jains.com)
Jain Irrigation is a diversified Company with approximately 8,000 employees and a product portfolio encompassing Irrigation Products, Piping Products, Plastic Sheets, Dehydrated Foods, Fruit Puree & Juice concentrates. Jain Irrigation has pioneered Drip Irrigation for small farmers in India and has a major market share in one of the fastest growing irrigation markets in the world and is also the second largest Drip Irrigation Company in the world.

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