Saturday, April 6, 2013

JAIN IRRIGATION - BUY



 
                  




 






While analysing EPC Industrie ,we have discussed about the potential and road blocks of micro irrigation industry in India in detail.Till now this industry is mainly driven by subsidy provided by governments and the delay in releasing subsidy by various states eroded the financial position  of companies operating in this sector.From last year onwards companies are taking efforts to change the business model  to reduce high receivable days and improve cash collection and now they are not  taking the responsibility of subsidy collection .This shift in business model partially affected the growth during this transformation phase.But ,on the other side ,potential is very vast in a water scarce country like India where a lion share of farm land  is still irrigated through flooded irrigation method.New farming techniques like precision farming also increasing the potential of MIS.Jain Irrigation is the second largest micro irrigation company in the world which is operating in other parts through various subsidiaries .Other than MIS ,Jain having presence in other sectors like plastic and food processing .Repeating drought like situation in India forcing governments to allocate more funds for irrigation and Jain is one of the major beneficiary .Recently Maharashtra Government decided  to make drip irrigation mandatory for sugarcane in next three to five years ( Read news HERE) . I believe many states and many crops will be forced to follow this in coming years .  In my opinion ,in another few years MIS will change to a necessity from a subsidy driven business due to changing climate and changing farming techniques.Revival in US economy is also positive for the company  where the company having larger presence.Company is now taking every efforts to clean its balance sheet .This management have enough experience and expertise in handling such situations and they proved the same even in the  past .They bring back the company from near collapse ( from first half of 1990's) to the position of world leader in 10 year.Promoters are one of the very few business houses showing higher level of business ethics in Indian Corporate world too. I believe , the worst will be over for Jain Irrigation in another few quarters and most of the negatives are already reflecting in its current market price.Recommending a buy in SIP mode for long term investors from CMP of Rs.57

Related Readings





Link to Company Website HERE

Links to its Subsidiaries  







Disc: I have vested interest in JIS









44 comments :

  1. few days back we have been talking about finolex industries in comment section

    it has doubles after that

    ReplyDelete
  2. Replies
    1. Not positive on S Kumar group cos.

      Delete
  3. Sir,
    please share your views on issues such as

    1)the share price has been consistently in a downtrend from 2010 and came down to Rs57 from Rs256 so is good to buy now
    2)the profit growth for last 3 years has been negative
    3)the debt on the company has increased by already 2.5 times from 2008

    so by considering above points is it good to invest in jain irregation.... i hope sir that you will reply

    ReplyDelete
    Replies
    1. I think the answer is in your question itself.Because of all these negatives share price crashed to current level and the negatives are discounted now . I hope situation will improve hereon and it is the time to start accumulation.

      Delete
  4. Nice pick at discounted price.. BUT STILL I BELIEVE EPC IRRIGATION is much better choice,with low debt level,increasing profit margin year after year..

    ReplyDelete
    Replies
    1. No doubt about EPC ,but I believe considering the potential of MIS in India ,there is enough space for more players.

      Delete
  5. Sir,
    How is the company - A2Z Maintenance? Can I invest in it?

    ReplyDelete
  6. Dear Valuepick Sir
    Few of your recommended stocks are in the bse list of illiquid stocks like acrysil, anil, rossell, multibase Vulcan etc. I am not a trader then how will buying and selling of this stocks be different from before.I use sharekhan. Can you throw some light in this issue. Will a long term investor need to worry holding this stocks.
    Regards
    Suman

    ReplyDelete
    Replies
    1. Details about periodic call auction is available in the web very easily . Since it is the first time such a mechanism is going to implement we can only wait and watch its implications.

      Delete
  7. Dear VP ,
    Considering the recent announcement of central goverment abour sugar de control , can you throw some lights on it impact on sugar stocks and any good pick between them for long term growth.

    Regards
    SK

    ReplyDelete
    Replies
    1. Positive move for long term .Prefer Balrampur Chini and Dhampur Sugar.

      Delete
  8. Sir Just a small request, all the stocks that you have recommended over past few months have a disclosure wherein you have some vested interests. If you could kindly disclose the quantity that you hold in these would help new investors better. Secondly if you could recommend stocks where you do not hold any interests but intend to purchase sometime later would also help. Just a sincere request sir....

    ReplyDelete
    Replies
    1. Not possible to disclose the quantity.

      I will not recommend anything which I don't like to buy if I have enough fund.

      Delete
  9. I heard a news that kerala govt banned heritage milk due to its causing cancer. Have you any information about this? And whats your curent view on heritage foods?

    ReplyDelete
    Replies
    1. Lot of brands are banning and removing ban in Kerala periodically.It is an issue more than one year old and I feel this issue exaggerated due to the promoters political connection on the background of upcoming state election in AP.No change in previous view on account of this issue.

      Delete
  10. Sir are tracking GIC housing fin or and other stock that you could recommend from housing finance??

    Regards
    Mehul

    ReplyDelete
    Replies
    1. GIC ,Canfin and Repco are suitable for passive long term investors.

      Delete
  11. Sir Thanks for your valuable advice all the time..!!
    Please share your view on sequent scientific after promoter bought 27.5 Lakhs warrants.

    ReplyDelete
    Replies
    1. Positive on this stock for long term.

      Delete
  12. Dear VP, does Rapicut also fall under new mechanism of illiquid stocks? is it also a long term bet?

    ReplyDelete
    Replies
    1. New mechanism is a disastrous one

      List of securities included in this system is available as attachment in the below link

      http://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20130401-39

      Delete
  13. Dear valuepick, Kindly share your view on HSIL ..

    ReplyDelete
    Replies
    1. Not a bad one ,go for it if you are willing to hold 2+ year

      Delete
  14. what is your opinion on Gravita India

    ReplyDelete
    Replies
    1. AS a company from same sector prefer NILE limited .But since it belongs to the new trading mechanism enter in it after watching whether there is any increase in volume in coming weeks.

      Delete
  15. Dear VP,

    Could you please share your views on Nitta Gelatin?

    Regards,

    Vishesh

    ReplyDelete
  16. Dear Sir Whats your view on East India Hotels at CMP ?

    ReplyDelete
  17. Hai Valueji............Thanks for your great work. Could you pls recommend 2 or 3 midcaps for a holding period of 2 year.
    Kindly share your views on Kopran Ltd

    ReplyDelete
    Replies
    1. I think Jain irrigation itself is a good pick for 2+ year along with Biocon,Cummins,Godrej Ind..etc.

      Delete
  18. Sir,
    Do you think economic,political problems will lead to a stand still phase of Indian equities? Perceptions change every now and then on indian equities. What is your opinion on coming FY?

    ReplyDelete
  19. Normally stock market always discounting facts much earlier than it become reality.Whatever be the macro factors ,a growing company will always reward investors in long term .

    ReplyDelete
  20. VP ji
    what are your thoughts on ashok leyland.... and investing at current level

    ReplyDelete
  21. Dear Sir,

    Plz advise about orient bell currently.the stock has gone down hugely (around 30%) in the past 1-2 months..what your current recommendation for the stock. Should I book loss on it..?

    Thanks in advance

    ReplyDelete
    Replies
    1. Whether this will be included in the illiquid scrip category - is the only issue .Valuation is comfortable .

      Delete
  22. Sir..I read most of your picks but you didn't recommended any banking stock.
    If you are tracking any please suggest for long term.

    ReplyDelete
    Replies
    1. Already recommended Yes bank and ING Vysya few years back.

      Delete
  23. Sir..how is swaraj engines for long term and what are your views on M&M financial...

    ReplyDelete
  24. Sir..would you recommend Venus remedies and apcotex for long term investment...pls advise...

    ReplyDelete
  25. such a great information on jain tirth and jain history, very interested to read more about jain religion.

    ReplyDelete

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