Jain Irrigation surges on foreign brokerage upgrade

Jain Irrigation Systems surged 5.83% to Rs 70.80 at 14:27 IST on BSE on reports that a foreign brokerage has upgraded its rating on the stock to overweight from equal-weight on robust earnings growth forecast.

Meanwhile, the S&P BSE Sensex was up 188.79 points or 0.71% at 26,954.44.

On BSE, so far 10.45 lakh shares were traded in the counter as against average daily volume of 4.67 lakh shares in the past one quarter. The stock hit a high of Rs 71.55 and a low of Rs 69.40 so far during the day. The stock had hit a 52-week high of Rs 79 on 23 July 2015. The stock had hit a 52-week low of Rs 47 on 17 February 2016. The stock had underperformed the market over the past one month till 22 June 2016, advancing 4.69% compared with Sensex's 5.79% rise. The scrip had, however, outperformed the market in past one quarter, surging 18.3% as against Sensex's 5.67% rise.

The mid-cap company has equity capital of Rs 91.44 crore. Face value per share is Rs 2.

The foreign brokerage reportedly expects a 70% compound annual growth rate (CAGR) in earnings of Jain Irrigation Systems (JISL) over FY 2017-19. The brokerage reportedly stated that leverage has been a key concern for investors, but the company has now recapitalised its balance sheet with lower interest costs which is expected to boost its earnings. The foreign brokerage also cited other favorable factors for the company such as expectation of a better monsoon and an increasing central & state government thrust on micro irrigation systems (MIS) after two consecutive years of drought.

On consolidated basis, Jain Irrigation Systems' net profit fell 8.9% to Rs 89.78 crore on 1% decline in net sales to Rs 1988.99 crore in Q4 March 2016 over Q4 March 2015.

Jain Irrigation Systems is engaged in manufacturing of micro irrigation systems, PVC pipes, HDPE pipes, plastic sheets, agro processed products, renewable energy solutions, tissue culture plants, financial services and other agricultural inputs.

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