Summary
Jain Irrigation Systems Limited - Q3 FY26 Earnings Call Summary Wednesday, February 4, 2026, 2:30 PM IST
Event Participants
Executives 2 Anil Jain (CEO & MD), Bipeen Valame (CFO)
Analysts 6 Ankit Bansal, Bhavya Sharma, Girish Pandit, Parag Khare, Praneeth (Individual Investor), Ravi Kumar, Ronak Osthwal, Sidhant
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹1,600 crores | +17.4% YoY; Driven by strong performance across Hi-Tech, Plastic, and Agro processing segments. |
| EBITDA | ₹168 crores | -4.0% YoY; Margins compressed to 10.5% (vs 12.9% YoY) due to inventory losses in plastics and seasonality in food. |
| Adjusted PAT | ₹16 crores | Profitable when excluding ₹38 crores in non-cash charges (Labor Code entry and subsidiary liquidation). |
| Hi-Tech Segment Revenue | ₹625 crores | +15.7% YoY; Growth supported by Drip Irrigation, Tissue Culture, and a rebound in Solar Pump business. |
| Plastic Segment Revenue | ₹462 crores | +18.2% YoY; Impacted by lower resin prices in H1, though demand began recovering in Q3. |
| Agro Processing Revenue | ₹509 crores | +18.4% YoY; Revenue growth offset by lower production of onions/bananas due to erratic weather. |
| Net Working Capital Cycle | 181 days | -15 days YoY; Improvements driven by higher retail sales mix and reduced inventory levels. |
| Total Debt (Long Term) | ₹688 crores (Unsustainable) | Scheduled for repayment in H2 FY27; Management intends to use internal accruals and land monetization. |
Geographic & Segment Commentary
- Hi-Tech Division: Revenue grew to ₹625 crores with healthy EBITDA margins of 17-18%. Growth was fueled by retail demand in drip irrigation and tissue culture, alongside a strategic restart of the solar agri-pump business.
- Plastic Piping: Segment faced margin pressure (7.2% vs 10.8% YoY) due to inventory losses from falling resin prices through December. Management notes prices have stabilized and started “inching up” in January, supporting a recovery outlook.
- Agro Processing: Strong 18.5% revenue growth but compromised earnings due to poor fixed-cost absorption. Erratic weather limited raw material availability for onion and banana processing, but new beverage lines are expected to drive FY27 volumes.
Company-Specific & Strategic Commentary
- Retail Pivot: Retail sales grew 24% this quarter, now far outpacing project sales. Management aims to make project sales “negligible” within 12 months to optimize the working capital cycle.
- Food Subsidiary Monetization: Preparation for a Jain Farm Fresh IPO is underway. Management is consulting with investment bankers and private equity partners to finalize the timeline and growth capital requirements.
- Beverage Expansion: Two large-scale bottling lines (600+ bottles/min) are commencing commercial production in February 2026. This contract manufacturing venture targets fruit juices and energy drinks, with Phase 2 (three additional lines) planned for later this year.
- Strategic JVs: Signed a 51%-49% JV with a Japanese firm for tomato processing. Operations are expected to commence in January 2027, focusing on value-added tomato products.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth | 15% for FY26; 18-20% for FY27 | Driven by retail market expansion in North/North-East India and new beverage revenues. |
| EBITDA Growth | 15%+ for FY26 | Q4 is seasonally the strongest quarter for fixed cost absorption and product mix. |
| EBITDA Margin | 13% for FY26; 14-14.5% for FY27 | Expected margin expansion through higher capacity utilization and improved product mix. |
| Debt Reduction | ₹350 - ₹400 crores in FY27 | Targeted reduction specifically from the recovery of legacy government project receivables. |
Risks & Constraints
| Risk | Context |
|---|---|
| Debt Maturity | ₹688 crores of unsustainable debt matures in H2 FY27. Management is relying on legacy receivable collections and land sales in South India if internal accruals fall short. |
| Raw Material Volatility | Fluctuating PVC/PE resin prices impact inventory valuation. Rapid price drops in early FY26 led to a 150 bps hit to nine-month plastic segment margins. |
| Seasonality & Weather | Agri-business remains highly sensitive to weather. Extended rains in Q3 delayed the irrigation season and limited raw material supply for the food processing segment. |
Q&A Highlights
Debt & Liquidity
- Question: How will the ₹688 crores of unsustainable debt be repaid in FY27? (Parag Khare)
- Answer: Repayment is due in H2 FY27. Management plans to use internal accruals, recovery of ₹350-400 crores from government projects (Karnataka, Maharashtra, MP, Rajasthan), and potential monetization of land parcels in Southern India (Anil Jain).
Food Division IPO
- Question: What is the status of the Food division IPO? (Praneeth)
- Answer: The company is working with bankers and PE shareholders. A final call is expected in the next two months, with more clarity following March results (Anil Jain).
Beverage Project
- Question: What is the nature of the new bottling lines? (Ravi Kumar)
- Answer: Two lines are starting now for contract manufacturing (cola, energy drinks, juices). This is a “profitable from day one” model. Future phases may include dairy-capable lines (Anil Jain).
Negative PAT Clarity
- Question: Why did the company report a net loss this quarter? (Ankit Bansal)
- Answer: Two non-cash book entries: ₹23 crores for the new Labor Code and a ₹15 crore goodwill write-off from a liquidated European subsidiary. Adjusted PAT is positive at ₹16 crores (Anil Jain).
Key Takeaway
Jain Irrigation delivered a resilient Q3 FY26 with 17.4% revenue growth to ₹1,600 crores, despite margin pressure in the plastics segment. The company successfully executed a strategic shift toward retail, which grew 24% and helped reduce the working capital cycle by 15 days YoY. While absolute EBITDA was slightly lower due to inventory losses and weather-related production gaps in food processing, the Hi-Tech and Solar segments showed strong momentum. Management is focused on addressing ₹688 crores of debt maturing in H2 FY27 through a combination of internal accruals and a targeted ₹400 crore recovery from government projects. With new beverage lines starting commercial production and stabilized resin prices, the company expects to end FY26 with 15% revenue growth and accelerate to 18-20% growth in FY27.
Want more insights like this?
Subscribe to get deep dives delivered to your inbox.
More Earnings Summaries
Explore more Q3 FY26 earnings call analyses: