Q1 2027 Jain Irrigation Systems Ltd Earnings Call

August 10, 2026

Speaker #1: Ladies and gentlemen, good day and welcome to the Jain Irrigation Systems Ltd. Q1 FY27 earnings conference call. Today, we have on the call Mr. Anil Jain, CEO and MD, and Mr. Bipin Valame, CFO.

Operator: Ladies and gentlemen, good day, welcome to Jain Irrigation Systems Ltd. Q1 FY27 earnings conference call. Today, we have on the call Mr. Anil Jain, CEO and MD, Mr. Bipeen Valame, CFO. As a reminder, all participant lines will be in the listen-only mode, there will be an opportunity for you to ask questions after the presentation concludes.

Speaker #1: As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.

Speaker #1: Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touch-tone phone. Please note that this conference is being recorded.

Operator: Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Anil Jain to take us through the company's business outlook and financial highlights. We will open the floor for questions. Thank you, over to you, sir.

Speaker #1: I now hand the conference over to Mr. Anil Jain to take us through the company's business outlook and financial highlights, after which we will open the floor for questions.

Speaker #1: Thank you, and over to you, sir.

Speaker #2: Thank you. Good afternoon to all the listeners on the call, and thank you for joining our call. This call is about the Q1 results for Jain Irrigation.

Anil Jain: Thank you. Good afternoon to all the listeners on the call, thank you for joining our call. This call is about the Q1 results for Jain Irrigation. Today, we also had annual general meeting followed by the board, in the board, the results were approved. As we spoke, I think sometimes in May, it was anticipated that the first quarter would be a muted quarter. As a company, overall, our revenue has been about 2.5% less than the same period last year at about INR 1,500 crores. Within different segments, I think high-tech segment registered a degrowth, while plastic was almost similar to the last year same period. Agro-processing registered significant growth due to additional beverage business, some growth in our overseas market.

Speaker #2: And today we also had an Annual General Meeting followed by the Board, and in the Board the results were approved. So, as we spoke I think some time in May, it was anticipated that the first quarter would be a muted quarter.

Speaker #2: So, as a company, overall our revenue has been about 2.5% less than the same period last year, at about ₹1,500 crores. And within the different segments, I think the high-tech segment registered growth, while plastics was almost similar to the last year, same period.

Anil Jain: As a company, overall, our revenue has been about 2.5% less than the same period last year at about INR 1,500 crores. Within different segments, I think high-tech segment registered a degrowth, while plastic was almost similar to the last year same period. Agro-processing registered significant growth due to additional beverage business, some growth in our overseas market.

Speaker #2: Agro-processing registered significant growth due to additional beverage business, and there was also some growth in our overseas market. So, while overall revenue has remained similar, there was a reduction in EBITDA because, especially in the standalone India business, we had less fixed cost absorption.

Anil Jain: While overall revenue has remained similar, there was a reduction in EBITDA because especially standalone India business, we had less fixed cost absorption because of lower volume due to volatility linked to raw material prices and demand postponement. That has resulted into lower EBITDA, especially in the High-tech division. In fact, Plastic divisions improved its EBITDA. Agro-processing also had seasonality issues to register lower EBITDA. Impact on the Forex side was negative compared to the similar period last year. All in all, reduction in EBITDA temporarily in this quarter. We believe we should be able to catch up in the H2 of the current fiscal year to cover what is lost. In terms of when I look at the margins, High-tech division delivered about 14.4% margin versus similar period at 16.6%. Approximately 2% reduction.

Speaker #2: Because of lower volume, due to volatility linked to raw material prices and demand postponement. This has resulted in lower EBITDA, especially in the high-tech division.

Speaker #2: In fact, the plastic division has improved its EBITDA, and agro-processing also had seasonality issues, resulting in lower EBITDA. The impact on the forex side was negative compared to the similar period last year.

Anil Jain: Agro-processing also had seasonality issues to register lower EBITDA. Impact on the Forex side was negative compared to the similar period last year. All in all, reduction in EBITDA temporarily in this quarter. We believe we should be able to catch up in the H2 of the current fiscal year to cover what is lost. In terms of when I look at the margins, High-tech division delivered about 14.4% margin versus similar period at 16.6%. Approximately 2% reduction.

Speaker #2: So, all in all, there was a reduction in EBITDA temporarily in this quarter, but we believe we should be able to catch up in the second half of the current fiscal year.

Speaker #2: To cover what is lost. In terms of, when I look at the margins, the high-tech division delivered about 14.4% margin versus a similar period at 16.6%.

Speaker #2: So, approximately a 2% reduction, and plastic, in fact, improved by about a percent or so, from 10% to 11%. And agro-processing also came down by about 3%.

Anil Jain: Plastic, in fact, improved by about a percentage or so, from 10% to 11%. Agro-processing also came down by about 3%. Post all of these changes in the margin profile of the company, adjusted PAT after adjusting the non-cash NCD interest unwinding, adjusted PAT at about INR 3 crore versus last year's INR 30 crore. Company has still remained profitable. Overall, when we look at this quarter, the revenue, we have been able to almost maintain at similar levels. EBITDA margins are down by about 2% or so. Mostly linked to unabsorbed fixed cost, which can be captured in the H2. Adjusted PAT has remained profitable. In month of April when we were there, we felt that situation was going to be much worse. I think May and June we did better. July continues to be remaining good.

Speaker #2: So, post all of these changes, in the margin profile of the company, the adjusted PAT after adjusting for the non-cash NCD interest unwinding is about ₹3 crore versus last year's ₹30 crore.

Speaker #2: But the company has still remained profitable. So overall, when we look at this quarter, the revenue we have been able to almost maintain at a similar level.

Anil Jain: Overall, when we look at this quarter, the revenue, we have been able to almost maintain at similar levels. EBITDA margins are down by about 2% or so. Mostly linked to unabsorbed fixed cost, which can be captured in the H2. Adjusted PAT has remained profitable. In month of April when we were there, we felt that situation was going to be much worse. I think May and June we did better. July continues to be remaining good.

Speaker #2: EBITDA margins are down by about 2% or so, but this is mostly linked to unabsorbed fixed costs, which can be captured in the second half. And adjusted PAT has remained profitable.

Speaker #2: We had, in April—the month of April, when we were there, we felt that the situation was going to be much worse. But I think in May and June we did better.

Speaker #2: July continues to remain good, so things are definitely improving compared to how the year started, especially due to the volatility linked to the business. Now, while this is the consolidated result, on a standalone basis, again, the majority of the degrowth this quarter particularly came from the standalone business.

Anil Jain: Things are definitely improving than how the year started, especially due to volatility linked into the business. While this is consolidated result on a standalone basis, again, majority of the degrowth this quarter particularly came from standalone business. While overseas consult business and business of food-based company has done well. Even on standalone basis, on adjusted PAT basis, company has remained profitable and also having a good cash. If I look at cash flow statement, the EBITDA of INR 164 crore, almost about 78% of EBITDA we have been able to convert into cash flow. That is quite a positive sign in terms of management of the working capital, which we have done. I think that's a big plus. This was possible due to further improvement in working capital cycle.

Speaker #2: And while overseas consolidated business and business of food companies has done well, if we—and even on standalone basis, on adjusted PAT basis—the company has remained profitable and also has good cash.

Anil Jain: Even on standalone basis, on adjusted PAT basis, company has remained profitable and also having a good cash. If I look at cash flow statement, the EBITDA of INR 164 crore, almost about 78% of EBITDA we have been able to convert into cash flow. That is quite a positive sign in terms of management of the working capital, which we have done. I think that's a big plus. This was possible due to further improvement in working capital cycle.

Speaker #2: If I look at the cash flow statement, the EBITDA of ₹164 crores—almost about 78% of EBITDA—we have been able to convert into cash flow.

Speaker #2: That is quite a positive sign in terms of management of the working capital, which we have done. So I think that's a big plus.

Speaker #2: And this was possible due to further improvement in the working capital cycle. If we look at it on a consolidated, entire-company basis, net working capital last year at this time, June ’25, was about 210 days.

Anil Jain: If we look at on consolidated entire company basis, net working capital last year this time, June 2025, was about 210 days, and this year it has come down to 183 days. That's a significant improvement over last 1 year. Even on a standalone basis it has come down from 296 days to 283 days. That's a big improvement. If I just compare with March 2026, also, it was 186 days, and now it is 183 days. That's improvement. This is despite all the volatility which was out there. In terms of business potential, in terms of looking forward in the remaining 3 quarters, Q2 typically also remains mute because of the rainy season. The good news is, there was a fear that a huge amount of this super El Niño will emerge, and that would have a disaster in terms of total rainfall.

Speaker #2: And this year, it has come down to 183 days, so that's a significant improvement over the last one year. And even on a standalone basis, it has come down from 296 days to 283 days.

Speaker #2: So that's a big improvement. If I just compare with March 26, also, it was 186 days, and now it is 183. So that's an improvement.

Speaker #2: Now, and this is despite all the volatility which was out there. In terms of business potential, in terms of looking forward in the remaining three quarters, the second quarter typically also remains muted because of the rainy season.

Speaker #2: But the good news is, there was a fear that a huge amount of this super El Niño will emerge, and that would have been a disaster in terms of total rainfall.

Speaker #2: But we have seen a good level of rains in July. That would mean the farmer got adequate moisture into their soil for the crops to sustain themselves.

Anil Jain: We have seen good level of rains in July. That would mean the farmer got adequate moisture into their soil for the crops to sustain themselves. It is expected over the next couple of weeks, some good rains will continue in the country. By and large, there was a big deficit in June because of the delayed onset of monsoon. That was kind of covered partly into July, and we hope for also into August. The news about the monsoon and the weather and the climate change is not as bad as it was forecasted. I think that's a positive thing as far as we are concerned. For the rabi crop and for the next year's summer business, this would be very positive. Majority of dams in the country have water levels filled up to now two-thirds, 67%.

Speaker #2: And it is expected, over the next couple of weeks, some good rains will continue in the country. So, by and large, there was a big deficit in June because of the delayed onset of monsoon. That was kind of covered partly in July.

Speaker #2: And we hope also into August. So the news about the monsoon and the weather and climate change is not as bad as it was forecasted.

Speaker #2: So, I think that's a positive thing as far as we are concerned. For the Rabi crop and for next year's summer business, this would be very positive.

Speaker #2: The majority of dams in the country have water levels filled up to now two-thirds, or 67%. And by the end of the monsoon, if they do hit 80-85 percent, that means adequate water availability for irrigation in the next hot summer also.

Anil Jain: By the end of the monsoon, if they do hit 80%, 85%, that means adequate water availability for irrigation the next hot summer also, which is positive. The reduction in the revenue in the June was partially caused by postponement of purchase decision by customers due to very high prices. Second, it was also because the delayed onset of monsoon, so farmers were not ready to sow their crop, and of course, then they couldn't also take the irrigation systems as well as pipes. Since then, as I said, July has been better. We have registered already a positive revenue growth in July as against Q2 of significant revenue growth here. August and September also seem to be good.

Speaker #2: So, which is positive. The reduction in revenue in June was partially caused by the postponement of purchase decisions by customers due to very high prices.

Speaker #2: And second, it was also because of the delayed onset of monsoon, so farmers were not ready to sow. They couldn't also take the irrigation systems.

Speaker #2: As well as pipes. But since then, as I said, July has been better. We have already registered positive revenue growth in July as against the April to June quarter, with significant revenue growth here.

Speaker #2: And August and September also seem to be good. But especially, we think with the kind of negotiations we are doing with the institutional customers for larger diameter pipes, we see a lot more kind of surprise demand coming through.

Anil Jain: Especially, we think with the kind of negotiations we are doing also with institutional customers for larger diameter pipes, we see lot more suppressed demand coming through. Now, subject to a little bit more stability on the geopolitical event, where oil stabilizes and the polymer prices come down a little bit more than where they are, I think that would give that trigger momentum for the growth into the business. Reasonable quarter, but far more needs to be done in H2 of this year, and that looks good. The signs from the indicators are positive. In terms of, as I already talked about, cash flow was positive this year. In terms of overall cash flow, we have been able to generate post-working capital changes has been positive. We have been able to maintain margin, except small reduction linked to unabsorption of fixed cost.

Speaker #2: Now, subject to a little bit more stability in geopolitical events, where oil stabilizes and if polymer prices come down a little bit more than where they are, I think that would give that trigger momentum for the growth into the business.

Speaker #2: So, reasonable quarter, but far more needs to be done in the second half of this year. And that looks good. The signs from the indicators are positive.

Speaker #2: In terms of as I already talked about, cash flow was positive this year. I mean, in terms of overall cash flow, we have been able to generate post-working capital changes has been positive.

Speaker #2: And we have been able to maintain margin, except for a small reduction linked to unabsorption of fixed cost. That can be covered in the rest of the year.

Anil Jain: That can be covered in the rest of the year. In terms of the major issue, which I think is there, is on the balance sheet this year with about INR 690 crore worth of debt of the NCDs falling due in the current fiscal, partly in September, partly March. Approximately INR 230 crore in September, and the remainder in March of that INR 690. Or maybe I think INR 680 now, approximately. We believe that, as we have said this earlier, company will be able to take care of these obligations in the current year through its cash flows. Company is also pursuing other alternatives as the backup plan, just as a matter of prudency in terms of to ensure that come what may, our company does and will ensure that all obligations are paid on time, as we have done in last four years.

Speaker #2: In terms of the major issue, which I think is there on the balance sheet this year, there is about ₹690 crore of debt from the NCDs falling due in the current fiscal.

Speaker #2: Partly in September, partly in March. Approximately ₹230 crore in September and the remainder in March of that ₹690 crore, or maybe I think ₹680 crore now, approximately.

Speaker #2: So, we believe that, as we have said earlier, the company would be able to take care of these obligations in the current year through its cash flows.

Speaker #2: And companies are also pursuing other alternatives as a backup plan, just as a matter of prudency. In terms of ensuring that, come what may, the company does and will ensure that all obligations are paid on time, as we have done in the last four years.

Speaker #2: In terms of the rest of the capital, in terms of working capital, that has been managed properly. I think we have good support from our current working capital banks.

Anil Jain: In terms of rest of the capital, in terms of working capital, that has been managed properly. I think we have good support from current working capital banks. They have approved additional limits, new limits. I think that thing is going well. I think bankers understand what has happened due to this West Asia crisis, the impact when suddenly if your raw material prices go up by 50%, what happens. They have provided necessary support to the company to come through this crisis and come out well. We are very thankful to them. At the same time, we are quite optimistic about the remainder of the year. Overall, overseas plastic business did well. Approximately a significant growth of 40% or so in terms of revenue. Because of that performance, I think overall EBITDA margin through plastics have improved in this quarter for us.

Speaker #2: They have approved additional limits, new limits, so I think that thing is going well. And I think bankers understand what has happened due to this West Asia crisis.

Speaker #2: The impact is that suddenly, if your raw material prices go up by 50%, what happens? So, they have provided necessary support to the company to come through this crisis and come out well.

Speaker #2: And so we're very thankful to them. But at the same time, we are quite optimistic about the remainder of the year. Overall, overseas plastic business did well.

Speaker #2: We saw approximately significant growth of 40% or so in terms of revenue. And because of that performance, I think overall EBITDA margin for plastics has improved in this quarter for us.

Speaker #2: In terms of structurally where we are going, I think we are entering into a cycle, post this season, where every single product line of the company—whether it is irrigation business, piping, solar pumps, tissue culture, or food processing—we are seeing growth opportunities.

Anil Jain: In terms of structurally where we are going, I think we are entering into a cycle post this season, where every single product line of the company, whether it is about irrigation business, piping, solar pump, tissue culture, food processing, we are seeing growth opportunities. We are quite positive there. As I said, this Q1 was a combination of postponement of decisions by customers due to high prices, delayed onset of monsoon, less sales related to the project category, which is like companies consider decisions to get out of that particular type of business, as well as almost limited billing related to solar pump business, which will pick up in Q2, Q3, and Q4. I would say that overall, Q1 results have muted, we remain confident on the rest of the year.

Speaker #2: So, we're quite positive there. And as I said, this first quarter was a combination of postponement of decisions by customers due to high prices, delayed onset of monsoon, less sales related to the project category—which is like the company considered decision to get out of that particular type of business—as well as almost limited billing related to the solar pump business, which will pick up in the second, third, and fourth quarter.

Speaker #2: So, I would say that overall, while first quarter results have been muted, we remain confident about the rest of the year. When I look at the details of the business, even within the retail business, I think we did quite okay in our high-tech business in Maharashtra and in the western parts of the country.

Anil Jain: When I look at the details of the business, within even retail business, I think we did quite okay in our high-tech business in Maharashtra or in western parts of the country. Even in north, the business grew. The business which did not grow was which was linked to government subsidies, where we had opportunity to take revenue, but that would have meant a lot more impact on the cash flow and long receivables. We chose not to do that business. Otherwise, I think this revenue negative growth, what you see would have been actually covered, because easily we could have sold INR 50, 60 crore more of micro irrigation, but that would have meant many more longer receivables.

Speaker #2: Even in the north, the business grew. The business which did not grow was the one linked to government subsidies, where we had the opportunity to take revenue, but that would have meant a lot more impact on the cash flow and long receivables.

Speaker #2: So we chose not to do that business. Otherwise, I think this revenue negative growth that you see would have actually been covered. We could have easily sold ₹50-60 crore more of micro-irrigation, but that would have meant many more longer receivables.

Speaker #2: And especially this year, with so much debt due, we are choosing to pick up business which is more and more cash flow positive, with a quicker turnaround and cash-to-cash cycle.

Anil Jain: Especially this year with so much of debt due, we are choosing to pick up business, which is more and more cash flow positive or quicker turnaround and cash to cash cycle. That is where it is. In terms of overall receivables were compared to March, were down by about INR 25 crore in June. We will continue to see between September, December, and March that to further go down and those extra collections would get used to honor the necessary debt obligations which company has. In terms of structurally speaking, while the polymer prices went up, we have been able to pass on majority of the increases to the customers. If and when prices of polymers do come back, we think that would spur the overall demand into the business. We are looking forward to get that done.

Speaker #2: So that is where it is, and in terms of overall receivables, compared to March, we’re down by about ₹25 crore in June. And we’ll continue to see, between September, December, and March, that further go down, and those extra collections would get used to honor the necessary debt obligations which the company has.

Speaker #2: Structurally speaking, while the polymer prices went up, we have been able to pass on the majority of the increases to the customers.

Speaker #2: And if and when prices of polymers do come back, we think that would spur the overall demand in the business. So, we are looking forward to getting that done.

Speaker #2: So this is where kind of the first quarter's balance sheet, P&L as one would call it, in terms of the overall business cycle. And I think we are getting into a stronger business cycle going forward.

Anil Jain: This is where the Q1's balance sheet, P&L, as one would call it, in terms of overall business cycle. I think we're getting into a stronger business cycle going forward. With that, I will stop here. I will again thank you for patiently listening to this update on quarterly basis. We look forward to taking any questions you may have now. Thank you.

Speaker #2: So with that, I will stop here. I will look again. Thank you for patiently listening to this update on a quarterly basis. We look forward to taking any questions you may have now.

Speaker #2: Thank you.

Speaker #1: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star, then one, on their touch-tone phone.

Operator: Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and then one on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and then two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Your first question comes from the line of Ramesh with SJ Investments. Please go ahead.

Speaker #1: If you wish to remove yourself from the question queue, you may press star then two. Participants are requested to use handsets while asking a question.

Speaker #1: Ladies and gentlemen, we will wait for a moment while the question queue assembles. Your first question comes from the line of Ramesh with SG Investments.

Speaker #1: Please go ahead.

Speaker #3: Right, so thank you for the opportunity.

[Analyst] (SJ Investments): Yes, sir. Thank you for the opportunity.

Ramesh Vekaria: Yes, sir. Thank you for the opportunity.

Speaker #4: Hello. I can't hear you.

Anil Jain: Hello. I can't hear you.

Speaker #1: Just give me one moment, sir. Sorry, just one moment. Yes, Ramesh sir, please go ahead.

Operator: Just give me one moment, sir. Sorry. Just one moment. Yes, Ramesh, sir. Please go ahead.

Ramesh Vekaria: Just give me one moment, sir. Sorry. Just one moment.

Operator: Yes, Ramesh, sir. Please go ahead.

Speaker #3: Hi. I'm audible.

[Analyst] (SJ Investments): Hi, am I audible?

Ramesh Vekaria: Hi, am I audible?

Speaker #4: Yeah. Yes.

Anil Jain: Yeah.

Operator: Yes, sir. You can.

Speaker #1: Yes, sir.

Speaker #4: Yeah.

Speaker #3: Sir, I was trying to understand, in terms of government receivables, did we get any during this month? And how many more projects are left to go in terms of completion?

[Analyst] (SJ Investments): Sir, I was trying to understand in terms of government receivables, did we get any during this month? How many more projects are left to go in terms of completion? These two questions.

Ramesh Vekaria: Sir, I was trying to understand in terms of government receivables, did we get any during this month? How many more projects are left to go in terms of completion? These two questions.

Speaker #3: These two questions.

Speaker #4: I think last quarter we received approximately ₹60 crore from the government. And I think in the month of July, another ₹25–30 crore have come through from the government.

Anil Jain: I think last quarter, we received approximately INR 60 crore from the government. I think month of July, another INR 25, 30 crore have come through from the government. We see that as the rest of the year goes, it will continue. In terms of the project to be completed, I think hardly now, as you saw, the total billing on the project was maybe INR 24 crore or so for the quarter. I think Q2 could be maybe even less. There is one active large project, which is in Pune for water supply, where we still need to do, I think, triple digit billing, going forward, the remainder part. But most of other projects, like 98% and 99% done, very small amounts are still left.

Speaker #4: So we see that, as the rest of the year goes, it will continue. In terms of the project to be completed, I think, hardly now—you saw the total billing on the project was maybe 24 crores or so.

Speaker #4: For the quarter, I think second quarter could be maybe even less. There's one active large project, which is in Pune, for water supply, where we still need to do, I think, triple-digit billing going forward.

Speaker #4: The remainder part. But most of the other projects—like 98, 99 percent—are done. Very small amounts are still left.

Speaker #3: Sir, how much scope of work is left? Hello?

[Analyst] (SJ Investments): Sir, how much more scope of work is left? Hello.

Ramesh Vekaria: Sir, how much more scope of work is left? Hello.

Speaker #4: In the other projects, apart from the one project in Pune, I think total billing left is approximately closer to ₹40–50 crores only.

Anil Jain: In the other projects, apart from the one project in Pune, I think total billing left is about approximately closer to INR 40, 50 crore only.

Speaker #3: And in terms of the working activity to spend on it, is there more to go?

[Analyst] (SJ Investments): In terms of the working equity we need to spend on it, is there more to go?

Ramesh Vekaria: In terms of the working equity we need to spend on it, is there more to go?

Speaker #4: No, I think we don't have to spend any working capital. It's mostly the last-mile connectivity, etc. The material supply, the component supply—all of that has already happened.

Anil Jain: No. I think we don't have to spend any working capital.

[Analyst] (SJ Investments): Okay.

Ramesh Vekaria: Okay.

Anil Jain: It's mostly the last mile connectivity, et cetera. The material supply, the component supply, all of that has already happened. It's mostly service related remainder of the work, which is co-dependent on something else. The awardee has to do. The TWAD Board or the Irrigation Board, they need to provide certain things for us to do the last connectivity. No working capital is required to complete the remainder of billing.

Speaker #4: It's mostly service-related; the remainder of the work, which is core, depends on something else the awardee has to do—the toward board or the irrigation board.

Speaker #4: They need to provide certain things for us to do the last connectivity, but no working capital is required to complete the remainder of billing.

Speaker #3: Understood, sir. So, out of the number of projects we did, how many of them had an owner component? And is there an owner component with these projects?

[Analyst] (SJ Investments): Understood, sir. Out of the number of projects we take, how many of them had an O&M component? Is there an O&M component with these projects?

Ramesh Vekaria: Understood, sir. Out of the number of projects we take, how many of them had an O&M component? Is there an O&M component with these projects?

Anil Jain: Can you come again, the last part of your question?

Speaker #4: Could you repeat that? The last part of your question?

Speaker #3: Yes, sir. I was asking if there's an owner component to the CPC projects, and will there be some remaining work we need to do over the next few years?

[Analyst] (SJ Investments): There's an O&M component to the EPC projects. Will there be some remaining work we need to do over the next few years out of the overall project values we probably recognized over the last few years? How much more is yet to go?

Ramesh Vekaria: There's an O&M component to the EPC projects. Will there be some remaining work we need to do over the next few years out of the overall project values we probably recognized over the last few years? How much more is yet to go?

Speaker #3: Out of the overall project values we probably recognized over the last few years, how much more is left to go?

Speaker #4: I think out of the 70 projects—like, 72 projects—which we have completed or are in the process of completing, I think about 10 to 12 projects have O&M.

Anil Jain: I think out of the 70 projects, like 72 projects which we have completed or in process of completing, I think about 10 to 12 projects have O&M, over next, I think, two to three years. On that O&M, if we need to spend money on O&M, we are also going to build that, right? In that given year. The O&M total, our experience on the remainder of projects over last, I think seven, eight years, the total spend on O&M is quite light. It's not going to impact either my working capital or cash flows materially.

Speaker #4: Over the next, I think, two to three years. But on that O&M, if we need to spend money on O&M, we are also going to build that, right?

Speaker #4: In that given year. And this is the O&M total, our experience on the remainder of projects over the last, I think, seven or eight years. The total spend on O&M is quite light.

Speaker #4: So it's not going to impact either my working capital or cash flows, materially.

Speaker #3: Understood, sir. And one last question with regards to our—so, over the last few years, I think we had a few additions because of increasing costs of completing the project.

[Analyst] (SJ Investments): Understood, sir. One last question with regards to our scope. Over the last few years, I think we had few additions because of increasing costs of completing the project. Were these clauses actually built into the initial contract or were these afterward negotiated?

Ramesh Vekaria: Understood, sir. One last question with regards to our scope. Over the last few years, I think we had few additions because of increasing costs of completing the project. Were these clauses actually built into the initial contract or were these afterward negotiated?

Speaker #3: Were these clauses actually built into the initial contract, or were they negotiated afterward?

Speaker #4: So, when you start the project, right, it's a tender bidding process. So you do it based on the scope of the work. And then what happens when you actually go and do the project?

Anil Jain: When you start the project, it's a tender bidding process. You do based on the scope of the work. What happens when you actually go and do the project, because in one project, we are doing 100,000 hectares. You always find certain things which were different than what was presented in the tender document. In that cases, you go and seek cost plus from the tender authority or your customer, saying that there are changes than the original scope. Therefore, we need to do more billing. When they do give the additional escalation, as it is called. Some places there is a cost escalation, some places there is a change of the scope. I think if I go back in terms of totality of the question.

Speaker #4: Because in one project, we are doing 100,000 acres. So you always find certain things which were different than what were presented in the tender document.

Speaker #4: In that case, you then go and seek cost plus from the tender authority or your customer, saying that there are changes from the original scope and therefore we need to do more billing.

Speaker #4: And then they do give the additional escalation, as it is called. So, in some places, there is a cost escalation. In some places, there is a change of the scope.

Speaker #4: But I think if I go back, in terms of the totality of the question, by and large, what we originally anticipated and built, we have been able to get. And whatever extra we needed to spend because of change of scope or delays, for that we received escalation or cost increases.

Anil Jain: By and large, what we originally anticipated and billed, we have been able to get, and whatever extra we needed to spend because change of scope or delays, for that, we received escalation or cost increases. That has worked out fairly, I think, even in terms of the profitability coming from this project. What has really hurt or impacted company is the delayed cash flow and delayed cost of interest on, if you have not received money in time. Scope, the total billing which we did is in line with or with the changes have been paid for by the customers.

Speaker #4: So that has worked out fairly. I think E1. In terms of the profitability coming from this project, what has really hurt or impacted the company is the delayed cash flow and delayed cost of interest if you are not receiving money in time.

Speaker #4: But, scope-wise, the total billing that we did is in line, or the changes have been paid for by the customers.

Speaker #3: Understood, sir. But I have one question with regards to this.

[Analyst] (SJ Investments): Understood, sir.

Ramesh Vekaria: Understood, sir.

Operator: Sorry to interrupt, Ramesh. We request you to return to the queue for any further follow-ups.

Speaker #1: Sorry to interrupt. Ramesh, we request you to return to the queue for any further follow-ups. Thank you. We will take our next question. Before we take our next question, I would like to request all the participants to limit themselves to two questions each and rejoin the queue for any further follow-ups.

[Analyst] (SJ Investments): Yes, sir.

Ramesh Vekaria: Yes, sir.

Operator: Thank you. We take our next question. Before we take our next question, I would like to request all the participants to limit themselves to two questions each and rejoin the queue for any further follow-ups. We take our next question coming from the line of Sumit Kumar with Magadh Securities. Please go ahead.

Speaker #1: We take our next question, coming from the line of Sumit Kumar with Magath Securities. Please go ahead.

Sumit Kumar: Good afternoon, sir. Am I audible?

Speaker #3: Good afternoon, sir. Am I audible?

Speaker #4: Yes, yes, sir. Good afternoon.

Anil Jain: Yes. Good afternoon.

Sumit Kumar: The company still has to repay with INR 74 crores in rest, nine months of this financial year. By seeing the present state of affairs, it seems very difficult to repay or fulfill these debt obligations. What are the options available with the company? Is the company thinking for some asset monetization or taking new loan to repay this debt obligation?

Speaker #3: The company still has to repay ₹74 crore in the rest of the nine months of this financial year. By seeing the present state of affairs, it seems very difficult to repay or fulfill these debt obligations.

Speaker #3: So what are the options available with the company? Is the company thinking about some asset monetization or taking a new loan to repay this debt obligation?

Speaker #4: So, in fact, if you see over the last three and a half, four years—three and a half years, rather—the company has repaid to the banking system approximately ₹1,300 crore.

Anil Jain: In fact, if you see over last three and a half, four years, three and a half years rather, our company has repaid to the banking system approximately INR 1,300 crore. With now having completed the project this year, to pay whatever is due, the NCDs which are falling due, we feel fairly confident of doing so. In terms of options available to the company, one, the first and most important option is internal accruals. Second option is collection of the older legacy receivables. Third option is the part amount can be some level of asset monetization, such as surplus land. The fourth option would be refinancing. There are multiple options available to the company. As a prudent policy, in consultation with the lenders, we are working on all of these options at the same time, and we feel very confident that there won't be an issue.

Speaker #4: And with now having completed the project, this year, to pay whatever is due, the incidences which are falling due, we feel fairly confident of doing so.

Speaker #4: In terms of options available to the company, one, the first and most important option is internal accruals. The second option is collection of the older legacy receivables.

Speaker #4: The third option is that part of the amount can be through some level of asset monetization, such as surplus land. The fourth option would be refinancing. So, there are multiple options available to the company.

Speaker #4: And as a prudent policy, in consultation with the lenders, we are working on all of these options at the same time. We feel very confident that there won't be an issue.

Sumit Kumar: Sir, the second question is regarding the old receivables. These were something around INR 800 to 900 crore. Out of those old receivables, how much the company is expecting in this financial year, that is financial year 2026-27, how much out of this INR 800 to 900 crore would be recovered?

Speaker #3: You said the second question is regarding the old legacy receivables. Is there something around ₹800 to ₹900 crore? So out of those old receivables, how much is the company expecting in this financial year—that is, financial year 2026-27? How much out of this ₹800 to ₹900 crore would be recovered?

Speaker #4: I think our target this year was about 422 crores to be received. Sixty crores we already received in the first quarter. And so, remainder of nine months minimum, and this I'm talking minimum target, is 380 crores will come from that in total.

Anil Jain: I think our target this year was about INR 422 crore to be received. INR 60 crore we already received in the Q1. Remainder of 9 months minimum, and this I'm talking minimum, target is INR 380 crore will come from that in total.

Sumit Kumar: Yes. Thank you, sir.

Speaker #3: Thanks. Thank you, sir.

Speaker #4: Thank you.

Anil Jain: Thank you.

Speaker #1: Thank you.

Operator: Thank you. Your next question comes from the line of Ravi Kumar with Vadaga Investments. Please go ahead.

Speaker #3: Your next question comes from the line of Ravi Kumar with Wadaga Investment. Please go ahead.

Speaker #5: Yeah, hi. Thanks for the opportunity. My question is slightly more strategic. We’ve done an excellent job in terms of reducing the DSOs and running a tight ship.

Ravi Kumar: Yeah, hi. Thanks for the opportunity. My question is relating to slightly more strategic. While we've done excellent job in terms of reducing the DSOs, and working on a tight ship. Jain Irrigation looks like a very asset heavy but cash light company. For historical reasons, I've been an investor right from the time it was 125, the share price then went through INR 3 and now whatever it is today. I've gone through the whole cycle. Why are we not doing the same kind of a campaign what we did for the pivoting our business model from a project business to a retail model and also from running a very tight ship in terms of the way working capital is. Why are we not identifying non-core assets which doesn't impact revenue, which does not impact profitability and go on a little aggressive monetization model?

Speaker #5: Why are we Jain Irrigation is a looks like a very asset heavy but cash light company. And so historical reasons, I've been an investor right from the time it was 125 the share price and went through 3 rupees and now whatever it is, right, today.

Speaker #5: So I've gone through the whole cycle. Why are we not running the same kind of campaign that we did when pivoting our business model from a project business to a retail model, and also when running a very tight ship in terms of the way working capital is managed?

Speaker #5: Why are we not identifying non-core assets which don't impact revenue or profitability, and going for a slightly more aggressive monetization model? Even the Tamil Nadu land, which we thought would be over by now, maybe—we haven't heard anything about it.

Ravi Kumar: Even the Tamil Nadu land which we thought will be over by May, we haven't heard anything from it. That's my first question.

Speaker #5: That's my first question.

Speaker #4: And second, so I can answer both together.

Anil Jain: Second? I can answer both together.

Ravi Kumar: Okay. The second question is with respect to the food business side, the agro-processing. What is the beverage business? Because this is a new business which was not there in last quarter. If you remove that line or if you can just give us a revenue, what was the revenue? That would be great. Just a third follow-up slight one. What is our 180-day split receivables or maybe 180 or 240 days, whatever the way is, if you can get the receivables which are overdue, that will also give us some kind of a figure how it is moving.

Speaker #5: Okay. The second question is with respect to the food business, right, the agro-processing. If we remove the beverage, because this is a new business which was not there in the last quarter—

Speaker #5: So, if we remove that line, or if you can just give us the revenue—what was the revenue? That would be great. And just a third follow-up, a slight one.

Speaker #5: What is our 180-days-plus receivables? Or maybe 180 or 240 days—whatever the way is—if you can get those receivables which are old due, that will also give us some kind of figure of how it is moving.

Speaker #4: So yeah, thank you. I think there are three questions there. So, in terms of monetization, I think, as I said, with whatever we have done, we have repaid to the banking system ₹1,300 crores.

Anil Jain: Thank you. I think there are three questions there. In terms of monetization, I think as I said, with whatever we have done, we have repaid to banking system INR 1,300 crore through changing of the business, pivoting business. We did generate significant amount of free cash flow during this period of time to be able to take care of the debt and that process continues in the current year. I think from next year you'll start seeing the dividends which will come from positive cash flow which go into the growth of the company. In terms of the monetization, we have gone through two cycles of monetization. I think first monetization we did in 2022, 2023 period. At that time the debt was INR 7,000. Today it is a little bit less than INR 4,000.

Speaker #4: Through the changing of the business, pivoting the business, we did generate a significant amount of free cash flow during this period of time. This allowed us to take care of the debt, and that process continues in the current year.

Speaker #4: And I think from next year, you'll start seeing the dividends, which will come from positive cash flow and will go into the growth of the company.

Speaker #4: In terms of the monetization, right, we've gone through two cycles of monetization. I think the first monetization we did was in the 2022–23 period. At that time, the debt was ₹7,000 crore.

Speaker #4: Today, it is a little bit less than 4,000. And we did do monetization of a significant amount of our overseas business, etc. Right now, because of the restructuring which was done along with the banking system, there were limitations on what you can and cannot do because of the framework of the restructuring that existed.

Anil Jain: We did do monetization of significant amount of our overseas business etc. Right now because of the restructuring which was done along with the banking system there were limitations of what you can do and you cannot do because of the framework of the restructuring which existed. I think from next year value-based monetization which can create growth for the company will happen. In terms of the Tamil Nadu land it got delayed somewhat and I think maybe I referred to it was also elections there in April, May which took place but it is certainly happening. Again, we are working with lenders and I think that should get hopefully delivered in the current quarter. We are onto it.

Speaker #4: And I think from next year, value-based monetization, which can create growth for the company, will happen. In terms of the Tamil Nadu land, it got delayed somewhat, and I think maybe I referred to it.

Speaker #4: There were also elections there in April and May, which took place. But it is certainly happening. Again, we are working with lenders, and I think that should hopefully get delivered in the current quarter.

Speaker #4: So we are on to it, right? The whole idea is that once you pay off these NCDs from next year, standalone India business—there is no debt to pay.

Anil Jain: The whole idea is that once we pay off these NCDs from next year standalone India business there is no debt to pay except the normal continued working capital which gets renewed every year. Then the debt is still left in the food business. As you know, last I think one year we have taken decisions to take food business to the next level by introducing the new beverage business and so on. The beverage your question was that we did approximately INR 60 crore into the food business in April to June Q2 into that business. In terms of the receivables which are above a certain period of time, mostly the government related receivables are above 180 days.

Speaker #4: Except for the normal continued working capital, which gets renewed every year. And then the debt is still left in the food business, and as you know, over the last, I think, one year we have taken decisions to take the food business to the next level by introducing the new beverage business and so on.

Speaker #4: The beverage question that you asked was that we did approximately ₹60 crore in the food business in the April to June quarter. In that business, in terms of receivables which are above a certain period of time, mostly the government-related receivables are above 180 days.

Speaker #4: They are either linked to this, what you call the project EPC business, and are linked to what we call where state government places orders on the company on behalf of the farmers.

Anil Jain: They are either linked to this what you call the project EPC business and/or linked to what we call where state governments place order on the company on behalf of the farmers. Governments of Andhra, Telangana, Gujarat or Tamil Nadu, and sometimes their receivables take time to come through. This is industry-wide. It is not just Jain Irrigation. That's the way business is conducted for all the irrigation companies in those particular states. That amount is approximately, I would say, total outstanding related to these farmers who have placed order on us on behalf of the government is approximately INR 500 crore. Out of that, I would say about INR 300 crore would be above 180 days, and there's INR 800 to 900 crore we talked about of the government receivables, which is also over 180 days. About INR 1,100 crore is above 180 days.

Speaker #4: Governments of Andhra, Telangana, Gujarat, or Tamil Nadu. And sometimes their receivables take time to come through. And this is industry-wide—it is not just Jain Irrigation.

Speaker #4: That's the way business is conducted for all irrigation companies in those particular states. So that amount is approximately, I would say, the total outstanding related to these farmers being placed orders on us on behalf of the government is approximately ₹500 crore.

Speaker #4: Out of that, I would say about ₹300 crore would be above 180 days. And there is ₹800 to ₹900 crore we talked about, of the government receivables, which is also above 180 days.

Speaker #4: So about ₹1,100 crore is about 180 days. So, looking at the overall net receivables for June, they were ₹1,975 crore. So out of that, almost 55% are linked to these issues.

Anil Jain: Look at overall net receivables for June were 1,975. Out of that, almost 55% are linked to these issues, and the remainder would be the normal domestic receivables or export receivables.

Speaker #4: And the remainder would be the normal domestic receivables or export receivables.

Speaker #5: So, just a small follow-up, sir, on the last question.

Ravi Kumar: Sir, just a small follow-up, sir, on the last-

Operator: Sorry to interrupt, sir. We request you.

Speaker #2: Sorry to interrupt. We requested.

Speaker #5: No, it's just a suggestion—just a suggestion.

Ravi Kumar: No, it's just a suggestion.

Operator: I do understand, sir, but there are several other participants waiting for their turn. Really sorry to interrupt, sir.

Speaker #2: I do understand, but there are several other participants waiting for their turn. Really sorry to interrupt, sir.

Speaker #5: I just wanted this to be included in the investor presentation as a follow-up so that we don't have to ask this question—at least for this year.

Ravi Kumar: Just wanted this to be included in the investor presentation as a follow-up so that we don't have to ask this question, at least for this year. If that's okay.

Speaker #5: But that's okay. Yeah.

Speaker #4: We will keep that up. Thank you.

Anil Jain: We will keep that up. Thank you.

Speaker #2: Thank you. Your next question comes from the line of Vinay Chaudhary with Invexa Capital LLP. Please go ahead.

Operator: Thank you. Your next question comes from the line of Vinay Chaudhary with Invexa Capital LLP. Please go ahead.

Speaker #4: Hello. Yeah, hi. So my question relates to the high-tech division. So we have seen a significant degrowth of this quarter in high-tech. And we, of course, are facing we are consciously reducing the project division within this.

Vinay Chaudhary: Hello. Yeah, hi. My question relates to the high-tech division. We have seen a significant degrowth this quarter in high-tech, and we of course, are consciously reducing the project division within this. However, having said that, the non-project part of the high-tech is also implied to be not growing significantly to offset the degrowth in the conscious strategy of reducing the project. Where are we and why we are having a significant almost 22% YOY degrowth? And of course, on an EBITDA level contribution, it is about more than 30% degrowth. Can you throw some light on this, please?

Speaker #4: However, having said that, the non-project part of the high-tech segment is also implied to not be growing significantly to offset the degrowth from the conscious strategy of reducing the project segment.

Speaker #4: So, where are we, and why are we having a significant, almost 22% year-on-year degrowth? And, of course, on an EBITDA level contribution, it's about more than 30% degrowth.

Speaker #4: So, can you throw some light on this, please? Yeah, that's a good question. In fact, if I look at the high-tech division, right, there are three parts to the division in terms of product line.

Anil Jain: Yeah, that is a good question, in fact. If I look at the high-tech division, there is three parts to the division in terms of product line. One is micro irrigation or the drip irrigation, tissue culture, and the solar pump business, and the projects which are there. If I break up that 22% reduction in revenue, the retail business, which would cover the MIS, the tissue culture, solar, et cetera, that degrew by about 17%. The project, which is by design, is going to go down, degrew by 63%. Let us focus on the retail business, which degrew by 17% between the three product lines. MIS, which is the drip irrigation business, it degrew by 16%, from 438 crores to 368 crores. The reason it degrew, as I said, because of the delayed onset of monsoon.

Speaker #4: One is micro-irrigation, or the drip irrigation, tissue culture, and solar – solar pump business, and the projects which are there. So if I break up that 22% reduction in revenue, the retail business, which would cover the MIS, the tissue culture, solar, etc., that de-grew by about 17%.

Speaker #4: And the project, which by design is going to go down, declined by 63%. So let's focus on the retail business, which declined by 17%.

Speaker #4: Between the three product lines—so MIS, which is the drip irrigation business—it degrew by 16%, from ₹438 crore to ₹368 crore. And the reason it degrew, as I said, was because of the delayed onset of the monsoon; the sales which were going to happen in June did not happen.

Anil Jain: The normal sales which were going to happen in June did not happen, they have been postponed to the current quarter, and that would be covered in the current quarter. The second part, which I said that the polymer prices went up 50%, we had to pass on the price increases. Some of the customers decided to postpone the decision till the time prices come down. We think this is one-off. In fact, if I look at 2025 to 2026, micro irrigation and this high-tech division grew for the whole year more than 20%. Current year, also, we are planning that the business would grow, and this quarter was an anomaly. Similar thing, tissue culture business degrew by 10%. Again, the farmer could not sow the plants because there was no irrigation or water available, and that's why it was a 10% reduction.

Speaker #4: And they have been postponed to the current quarter, and that would be covered in the current quarter. And the second part, which I said, that we had to pass on the price increases.

Speaker #4: So, some of the customers decided to postpone the decision till the time prices come down. So, we think this is one of, in fact, if I look at FY25 to FY26, the micro-irrigation and this high-tech division grew for the whole year more than 20%.

Speaker #4: And this current year, we are also planning that the business will grow. This quarter was an anomaly. Similarly, the tissue culture business degrew by 10%.

Speaker #4: Again, the farmer could not sow the plants because there was no irrigation or water available, and that's why there was a 10% reduction. Solar goes by order to order, right?

Anil Jain: Solar goes by order to order. Last year, we grew solar business by 300%, solar pump business. The March quarter was a big quarter for us. We are focused on Q1 and even July, August to recover all the funds from the solar pump business. You will see significant growth coming from solar pump from September onwards. Partly what you're seeing is linked to the volatility in polymer prices, partly postponement of purchase decisions, and partly the solar business seasonality, which will pick up post-September. All in all, I think because this is the most important business in terms of profitability, that this would be a business which would maintain more than double-digit growth for FY27. In terms of, you mentioned profitability, the high-tech margin went from 16.6% to 14.4%, about 2.2% reduction.

Speaker #4: So last year, we grew our solar business by 300%—the solar pump business. And this year—so, the March quarter was a big quarter for us.

Speaker #4: So, we are focused on the first quarter and even July and August to recover all the funds after those from the solar pump business. And then, you will see segment growth coming from solar pump from September onwards.

Speaker #4: So, partly what you have seen is linked to the volatility in polymer prices, partly due to postponed purchase decisions, and partly the solar business, which is seasonal and will pick up in September.

Speaker #4: All in all, I think we feel, because this is the most important business in terms of profitability, that this would be a business which would maintain more than double-digit growth for FY27.

Speaker #4: And in terms of—you mentioned profitability—the high-tech margin went from 16.6% to 14.4%, about a 2.2% reduction. That was due to the volume growth not being there.

Anil Jain: That was due to the volume growth being not there. Our guidance for the whole year is that the margins, what we typically make, would be maintained in this business.

Speaker #4: And so, our guidance for the whole year is that the margins we typically make would be maintained in this business.

Speaker #3: So on full year basis, you are saying that despite this fall or 2, 2 and a half percent on a company level degrowth, we are maintaining a full year revenue as well as margin of 20% revenue growth and margin of 12 and a half, 13%?

Vinay Chaudhary: On full year basis, you're saying that despite this fall of 2.5% on a company level degrowth, we are maintaining a full year revenue as well as margin of 20% revenue growth and margin of 12.5% and 13%?

Speaker #4: I think we have said double-digit revenue growth because the situation is still not that stable. But in terms of overall margins, right, the console margins last year in this quarter were 13.

Anil Jain: I think we have said double-digit revenue growth because the situation is still not that stable. In terms of overall margins, the consolidated margins last year in this quarter were 13%. We came out at 11% across all divisions and businesses. I think this reduction will definitely be covered. In terms of overall margin for FY27, despite all the changes and volatility, we remain fairly confident to maintaining at about 14% on standalone and approximately 12.5%, 13% on consolidated.

Speaker #4: But we came out at 11 across all divisions and businesses. I think this reduction will definitely be covered. And in terms of overall margin for a 527, we should do despite with all the changes and volatility, we remain fairly confident to maintaining at about, I think, 14% on standalone and approximately 12 and a half, 13% on console basis.

Speaker #3: Okay. And lastly, on the debt side.

Vinay Chaudhary: Okay. Lastly on the debt side.

Operator: Sorry to interrupt, Vinay, sir. We request you to return to the queue for follow-ups, please.

Speaker #2: Sorry to interrupt. Vinay sir, we request you to return to the queue for follow-ups, please.

Speaker #3: Sure.

Vinay Chaudhary: Sure.

Speaker #2: Thank you. Your next question comes from the line of Parag Kare with PK Investments. Please go ahead.

Operator: Thank you. Your next question comes from the line of Parag Kare with PK Investments. Please go ahead.

Speaker #5: Yeah. Good evening, sir. Thank you for the opportunity. Am I audible?

Parag Kare: Yeah, good evening, sir. Thank you for the opportunity. Am I audible?

Speaker #4: Good evening. Yes, yes, you're audible.

Anil Jain: Good evening. Yeah, you're audible.

Speaker #5: Okay. Just a question on these old receivables. I know you talked about how much each receivable is, how many projects are ongoing. Do we have any doubtful projects where we may have to write off a certain amount?

Parag Kare: Okay. Just a question on these old receivables. I know you talked about how much is receivable, how many projects we are doing. Do we have any doubtful project where we may have to write off a certain amount? I know, historically, we haven't written off any significant amount as of now. Do we see any negative surprise somewhere going down the line, probably in the next nine months from now, which may have a slightly negative surprise for us?

Speaker #5: I know—I mean, historically, we haven't written off any significant amount as of now. But do we see any negative surprise somewhere down the line?

Speaker #5: Probably over the next nine months from now, which may have a slightly negative surprise for us?

Speaker #4: So I think when we looked at and reviewed all the projects—and this goes back to '21, '22, that period—and historically, right, these projects were billed and so on.

Anil Jain: No, I think when we looked at and reviewed all the projects, this goes back to 2021, 2022, that period, historically, these projects were built and so on. At that time, we took a conscious call, we reviewed all the projects, and at that time, we had made necessary provisions in the books as these receivables which are standing. The net good receivables standing in the books at the end of June of INR 1,975, there is always a few crores here and there, we do not really anticipate any material or any significant write-offs at all from projects. All the project receivables which are there today in the books, what we are looking for, what has not already been provided, are good to go, and they will be received.

Speaker #4: So at that time, we took a conscious call. We reviewed all the projects, and at that time, we had made the necessary provisions in the books.

Speaker #4: As these receivables which are standing—so the net good receivables standing in the books at the end of June 1975—we do not anticipate. There are always a few crores here and there.

Speaker #4: But we do not really anticipate any material or any significant write-offs at all from project. All the project receivables which are there, which are there today, in the books, what we are looking for, what is not already been provided, are good to go.

Speaker #4: And they would be received. Now, it has been partially the time—the delay in getting the project completed. The restructuring of businesses, all that happened, partly because state governments, you know, have been prioritizing a lot of freebies.

Anil Jain: Now, it has been partially time, the delay in getting projects completed, the restructuring of businesses, all that happened, partly because state governments have been prioritizing a lot of freebies, they do not pay the EPC contractors, et cetera. This is not just our case. I think if you've been reading news in the past about Karnataka or Maharashtra, like INR 80,000 crore not paid or INR 100,000 crore not paid, and so on. We have seen movements. As I said, just last quarter, we received INR 60 crore, and we are hoping at least a minimum of INR 380 crore in the remaining nine months, which we are now quite confident of because things have really progressed well. Just to summarize, no hits on the project receivables and a significant amount of collection this year.

Speaker #4: So they do not pay the EPC contractors, etc. And this is not just our case. I think if you've been reading news in the past about Karnataka or Maharashtra, like ₹80,000 crore not paid or ₹100,000 crore not paid and so on.

Speaker #4: But we have seen movements, right? As I said, just last quarter we received ₹60 crore, and we are hoping for at least a minimum of ₹380 crore in the remaining nine months, which we are now quite confident of because things have really progressed fast.

Speaker #4: So, just to summarize: no hits on the project receivables and a significant amount of collections this year.

Speaker #5: Okay. And the second question is on the working capital lines. I mean, I'm talking about the standalone working capital. For the four years, it has its own cycle.

Parag Kare: Okay. The second question is on the working capital lines. I am talking about the standalone working capital. The food business has its own cycle. It has its separate working capital line. If we see standalone business, our working capital is like INR 1,500 crore, INR 1,600 crore. If we compare to some of our competitors domestically, our working capital requirement seems to be slightly on the higher side. Do you want to pinpoint any specific reason why we are on the higher side in terms of working capital requirements with respect to our competitors?

Speaker #5: It has its separate working capital lines. But if we see the standalone business, our working capital is around ₹1,500 crores or ₹1,600 crores. If we compare this to some of our competitors domestically, our working capital requirement seems to be slightly on the higher side.

Speaker #5: Do you want to pinpoint any specific reason why we are on the higher side in terms of working capital requirements with respect to our competitors?

Anil Jain: Yeah. When the known, I think, listed competitors are mostly in the piping business. Their working capital cycles on the plastic piping side are much lower. If I really dissect my working capital also on a similar basis, you would find that also we are actually in line or in fact, we did some internal comparison. In some cases, we are even better compared to listed other organizations. Where we have a higher amount, you mentioned INR 1,500 crore, INR 1,600 crore, it mostly comes from the legacy receivables of the projects, where there are long-term receivables. Also, this I talked about where state government give order on behalf of the farmers, and we get paid between six months to one year. That is where our working capital is higher.

Speaker #4: Yeah. So, when the known, I think, listed competitors are mostly in the piping business, their working capital cycles on the piping side, on the plastic piping side, are much lower.

Speaker #4: And if I really dissect my working capital also on a similar basis, you would find that we are actually in line or, in fact, we did some internal comparison—in some cases, we are even better compared to other listed organizations.

Speaker #4: Where we have a higher amount, right, you mentioned ₹1,500–1,600 crores, it mostly comes from the legacy receivables of the projects where there are long-term receivables. Also, this is what I talked about where state governments give orders on behalf of the farmers, and we get paid between six months to one year.

Speaker #4: That is where our working capital is higher. And on the irrigation company business, there are very few, I would say, listed entities. And of the size and scale that we have, that's the main reason.

Anil Jain: On the irrigation company business, there are very few, I would say, listed entities of the size and scale that we have. That's the main reason, I think maybe sometime next year, we talk about FY28. Once the project receivables are off, you would see that while our overall we have improved from where we were, it would substantially further improve, especially the receivable cycle.

Speaker #4: But with—I think when we, maybe sometime next year, talk about a 528, once the project receivables are off, you would see that while our overall position has improved from where we were, it would substantially further improve, especially the receivable cycle.

Speaker #5: All right, sir. Thank you for the opportunity, and good luck for Q2.

Parag Kare: All right, sir. Thank you for the opportunity and good luck for Q2.

Speaker #4: Thank you. Thank you.

Anil Jain: Thank you.

Speaker #2: Thank you. Your next question comes from Ashwin Reddy with Samatha Investments. Please go ahead.

Operator: Thank you. Your next question comes from Ashwin Reddy with Samatva Investments. Please go ahead.

Speaker #3: Yeah. Hi, sir. Good evening. Thank you for the opportunity. So, my first question is: given that so far the refinancing of debt has not happened, I'm sure there would be a reason for that or some pushback from the bank.

Ashwin Reddy Ramayyagari: Yeah. Hi, sir. Good evening. Thank you for the opportunity. My first question is, given that so far the refinancing of debt has not happened, I'm sure there would be a reason for that or some pushback from the bank. I'm curious, what is the pushback that you've been getting so far? Also linked to this, what will change now that gives us the confidence that the refinancing will happen?

Speaker #3: I'm curious, what is the pushback that you've been getting so far? And also, linked to this, what will change now that gives us the confidence that the refinancing will happen?

Speaker #4: So, there is no pushback. I think because the payments are only due in September, right? End of September. So, the first payment, and the next payment is due in March.

Anil Jain: There is no pushback, I think because the payments are only due in September, right, end of September. The first payment, and the next payment is due in March. We are definitely within the timelines to get this done. Not only that we have negotiated, we already have couple of term sheets in hand and discussions are ongoing. As I said, that regardless of refinancing, I think company will have adequate internal cash flow to honor the obligation.

Speaker #4: So we are definitely within the timelines to get this done. Not only that, we have negotiated; we already have a couple of term sheets in hand.

Speaker #4: And discussions are ongoing. And as I said, regardless of refinancing, I think the company will have adequate internal cash flow to honor the obligation.

Speaker #3: Okay. Okay, got it. The words to say for the land management, you will explain. But even the IPO efforts have not been satisfied within a year and a half or so.

Ashwin Reddy Ramayyagari: Okay, got it. Sir, the efforts to say for the land monetization you explained, even the IPO efforts have not materialized within a year and a half or so. What is the delay there? What is the reason for the long delay, and does the PE partner not have a timeline by when he has to exit and all? What is the scene there, and what is the reason for the delay in the IPO? It's been a very long delay.

Speaker #3: So, what is the—what is the delay there? What is the reason for the long delay? And does the P partner not have a timeline by when he has to exit and all?

Speaker #3: What is the theme there? And what is the reason for the delay in the IPO? It's been a very long delay.

Speaker #4: Okay, yeah. So, this is about the food business. So I think the total expected issue, or IPO, on the food business was comparatively of a smaller size.

Anil Jain: Okay, this is about the food business. I think the total expected issue or IPO on the food business was comparatively of a smaller size. In terms of the exit of the existing PE player plus additional funds being raised, let's say, primary for the company. The total expected figure was around, let's say, INR 1,000 crore. What merchant bankers advised that the market, maybe last couple of months things have slightly improved.

Speaker #4: In terms of the exit of the existing PE player, plus additional funds being raised—let's say, primarily for the company—the total expected figure was around, let's say, ₹1,000 crore.

Speaker #4: And what merchant bankers advised that the market maybe last couple of months, things have slightly improved. But compared to expected valuation for last four quarters, market that really gone down.

Ashwin Reddy Ramayyagari: Right

Ashwin Reddy Ramayyagari: compared to expected valuations for last four quarters, market had really gone down. I think, let's say, end of December, a year ago, 15 months ago, merchant bankers had given us some indications of likely valuation of the food business, which was in fact higher than even the valuation of the main company, based on the comparables and whatnot. Since then, that valuation went down considerably, generally in the market, because whatever the market scenario was, I think there were pending more than few hundred DRHP files where people were not bringing IPO. All that statistics you guys know. Their advice was to actually to wait and watch. Meanwhile, some of our new business was taking place, like beverage business, et cetera. We stayed focused on that.

Anil Jain: compared to expected valuations for last four quarters, market had really gone down. I think, let's say, end of December, a year ago, 15 months ago, merchant bankers had given us some indications of likely valuation of the food business, which was in fact higher than even the valuation of the main company, based on the comparables and whatnot. Since then, that valuation went down considerably, generally in the market, because whatever the market scenario was, I think there were pending more than few hundred DRHP files where people were not bringing IPO. All that statistics you guys know. Their advice was to actually to wait and watch. Meanwhile, some of our new business was taking place, like beverage business, et cetera. We stayed focused on that.

Speaker #4: I mean, so I think, let's say, end of December—this is now a year ago, or 15 months ago—merchant bankers had given us some indications of likely valuation of the food business, which was, in fact, higher than even the valuation of the main company, based on the comparables and whatnot.

Speaker #4: But since then, that valuation went down considerably—generally in the market—because of whatever the market scenario was. And I think there were a few hundred, more than a few hundred, DRHPs filed, but people were not bringing IPOs.

Speaker #4: All that statistics, you guys know. So their advice was actually to wait and watch. In the meantime, some of our new business was taking place, like the beverage business, etc.

Speaker #4: So we stayed focused on that. And I think as we go along, as we move forward post-September, if the market improves, that is something that would be seriously looked at.

Anil Jain: I think as we go along, as we move forward post September, if the market improves, that something would be seriously looked at. I'm thankful that our PE investor there is patient because they're looking for good value. Underlying business, I think again, as a unique business of a certain scale size including global opportunities within that business, we think eventually it should get a good solution.

Speaker #4: And I think I'm thankful that our PE investor there is patient because they're looking for good value. And the underlying business, I think, again, as a unique business of a certain scale and size, including global opportunities within that business, we think eventually it should get a good solution.

Speaker #3: Got it. Got it. Okay. Thank you. I'll come back in with you.

Ashwin Reddy Ramayyagari: Got it. Got it. Okay, thank you. I'll come back immediately.

Speaker #4: Thank you. Thank you.

Anil Jain: Thank you.

Operator: Thank you. The next question comes from the line of Ankit Bansal with AB India Limited. Please go ahead.

Speaker #2: Thank you. Your next question comes from the line of Ankit Bansal with AB India Limited. Please go ahead.

Speaker #5: Hello, sir.

Ankit Bansal: Hello, sir.

Speaker #4: Yes. Yes, Ankit.

Anil Jain: Yes, Ankit.

Speaker #5: Sir, my first question is, sir, why the there is a loss of PAC when the revenues are not down, sir? How much more quarters we have to, sir, this unsustainability investor we have to follow, sir?

Ankit Bansal: Sir, my first question is, sir, why there is a loss of PAT when the revenues are not down, sir? How much more quarters we have to, sir, this unsustainable investor we have to follow, sir? As an investor, we want sustainability as a company shareholder in Jain Irrigation. Sir, please, can you explain, sir, this?

Speaker #5: Aren't we, as investors, looking for sustainability as company shareholders in Jain Irrigation? So, please, can you explain this, sir?

Speaker #4: I think this quarter—yeah, yeah, yeah. So, this particular quarter, as I explained, had a much higher cost of raw materials and lower business out of the India segment, which is traditionally more profitable.

Anil Jain: I think this-

Ankit Bansal: Hello?

Anil Jain: particular quarter. This particular quarter, as I explained, was a much higher cost of raw material and lower business out of the India segment, which is traditionally more profitable. As I explained earlier in the call, that's a temporary phenomenon, but for the whole year we should recover. For whole year, we should do better than the last year in terms of profitability at PAT level. On adjusted PAT, we are still positive, if we take off the notional NCD interest cost. I am with you. With all the effort which we are making, the idea is that company should not only generate the good free cash flow, but generate at a PAT level EPS. That's where we are going.

Speaker #4: And as I explained earlier in the call, that's a temporary phenomenon. But for the whole year, we should recover. So, for the whole year, right, we should do better than last year in terms of profitability.

Speaker #4: At the PAC level, and on an adjusted PAC basis, we are still positive. If we take off the notional NCD interest cost—so, I am with you, right?

Speaker #4: With all the effort which we are making, the idea is that the company should not only generate good free cash flow, but also generate, at the PAC level, EPS. That's where we are going.

Speaker #4: So I think what we have not been able to do in the first quarter—and I think the second quarter is always mute—but you should see improvement in the second half of the year.

Anil Jain: I think what we have not been able to do in Q1, and I think Q2 is always mute, but you should see improvement in H2 of the year.

Speaker #5: Okay, sir, the memorandum that you've done for the coffee business, has the revenue started flowing? And what is the new biochar plant that you have started?

Ankit Bansal: Okay. Sir, the memorandum that you've done for the coffee business, has the revenue started flowing? What is the new biochar plant that you have started? What kind of business is that, sir? Can you explain, sir, this?

Speaker #5: What kind of business is that, sir? Can you explain this, sir?

Speaker #4: Yeah, so coffee—we have received the first orders from the Coffee Board, so that revenue has started. In terms of the biochar plant, as you know, we deal with farmers.

Anil Jain: Coffee, we have received the first orders from the Coffee Board, so that revenue has started. In terms of the biochar plant, as you know, we deal from farmers. We buy from them fruits, vegetables, et cetera, apart from selling them irrigation. Biochar means that we are buying from farmers the agriculture waste. Corn cob or the cotton stalk or mango stones, et cetera. Adding value, going through a digester, where you create biochar, which would be used again, partly as a media in our tissue culture business only, and partly given back to the farmers for the soil conditioning and so on, which will generate, again, higher productivity for the farmers. It is a business where you're creating wealth from the waste. On the top of that, you will get the carbon credit.

Speaker #4: We buy from them foods, vegetables, etc., apart from selling them irrigation. So, biochar means that we are buying from farmers the agricultural waste: corn cob, cotton stalk, mango stones, etc.

Speaker #4: Adding value and going through a digester where you create biochar, which would be used again partly as a medium in our tissue culture business only, and partly given back to the farmers for soil conditioning and so on.

Speaker #4: Which will generate, again, higher productivity for the farmers. So it is a business where you're creating wealth from waste. And on top of that, you will get the carbon credit.

Speaker #4: The whole process of getting carbon credit takes about six to nine months. But once it starts, it keeps moving. So it's a value-added business.

Anil Jain: The whole process of getting carbon credit takes about 6 to 9 months. Once it starts, it keeps moving. It's a value-added business. I think the opportunity is very large because India is one of the largest arable area in the world in terms of agriculture. A lot of waste is being generated, and that waste, you read it right in Delhi and other places, all this stuff being burned and that creates all the pollution. This way, if you can take all that waste and convert that into biochar, it's a win-win situation for everybody. That's the business we are starting with, as I said, mango stone, corn cob, and cotton stalk, and then we would look at other waste agriculture material. It's a very exciting project. You would start seeing, because project has recently started, any impact on numbers from the next fiscal.

Speaker #4: I think the opportunity is very large because India is one of the largest arable areas in the world in terms of agriculture. A lot of waste is being generated.

Speaker #4: And that waste—you read about it, right? In Delhi and other places, all this stuff is being burned, and that creates all the pollution. In this way, if you can take all that waste and convert it into biochar, it's a win-win situation for everybody.

Speaker #4: So that's the business. We are starting with, as I said, mango stone, corn cob, and cotton stalk. And then we will look at other waste agricultural materials.

Speaker #4: So it's a very exciting project. You will start seeing, because the project has recently started, any impact on numbers from the next fiscal. And that further cements our relationship with the farming community.

Anil Jain: That further cements our relationship with the farming community, and helps us to create more value.

Speaker #4: And helps us to create more value.

Speaker #5: Okay, sir. Don't you think your business is solid in the highlights?

Ankit Bansal: Okay, sir. Do you think your small business is a highlight-

Speaker #2: Okay, sir. Sorry to interrupt. We will be able to take that as the last question for today. And with that, I would now like to hand the conference over to the management for closing remarks.

Operator: Sorry to interrupt, Ankit sir. Sorry to interrupt. We will be able to take that as the last question for today. With that, I will now like to hand the conference over to the management for closing remarks. Over to you, team.

Speaker #2: Over to you, Dean.

Speaker #4: Yeah. Again, I would like to thank all the participants and especially thank you for all the questions. And I'm sorry, one or two questioners, we couldn't complete them.

Anil Jain: Yeah. Again, I would like to thank all the participants and especially for all the questions. I'm sorry, one or two questioners couldn't complete them. You can separately reach out to us too with their question, and we will be very happy to answer. Overall, I think we are very confident for the rest of the year. This Q1 was, things were a bit beyond our control, and we are very confident on honoring the debt obligation. We don't see that as an issue. H2, I think we will be having really strong numbers. We thank you again.

Speaker #4: You can also separately reach out to us with your questions, and we will be very happy to answer. Overall, I think we are very confident for the rest of the year.

Speaker #4: This first quarter, things were a bit beyond our control. And we are very confident in honoring the debt obligation. We don't see that as an issue.

Speaker #4: And in the second half, I think we will be having really strong numbers. We thank you again.

Speaker #2: Thank you, members of the management. Ladies and gentlemen, on behalf of Jain Irrigation Systems Limited, that concludes this conference. Thank you, everyone, for joining us, and you may now disconnect your lines.

Operator: Thank you, members of the management. Ladies and gentlemen, on behalf of Jain Irrigation Systems Ltd., that concludes this conference. Thank you everyone for joining us, and you may now disconnect your lines. Thank you.

Anil Jain: Thank you.

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Q1 2027 Jain Irrigation Systems Ltd Earnings Call

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