Growth in micro irrigation business to push up Jain Irrigation's numbers
01-Mar-2007 •Value Research
Jain Irrigation (Idirect Code: JAIIRR) is an integrated player in the agri-equipment sector. The company manufactures drip irrigation systems, sprinkler irrigation systems, valves, water filters, fertilizer equipment, green houses, nursery plants systems, bio-fertilizers, PVC pipes, PE pipes, plastic products, PVC sheets, PC sheets, solar water heating systems among things related to the sector. The company also has interests in food processing, juice concentrates, onion and vegetable dehydration and provides consultancy to companies operating in the sector.
The acquisition of US-based Aquarius brands for $21.5 million will make Jain Irrigation the second largest drip irrigation company in the world. Aquarius is a leading designer and manufacturer of micro irrigation systems for agriculture, landscape and nursery applications, which Jain Irrigation is not. The latter will now be able to offer a complete package to its customers. Jain had acquired Chapin Watermatics in May last year. With a 1,000-dealer network of the Aquarius in its fold, Jain Irrigation will be able to sell Chapin's products through Aquarius' newly- acquired distribution channels. Under Jain Irrigation's management, Aquarius is expected to post an operating profit of $5 million. Jain Irrigation had posted a 105 per cent rise in its third quarter profits (year-on-year) to Rs 31.3 crore. Though there were lower margins in PVC and agro processing business, the momentum in micro irrigation made up for the low margins. The growth in micro irrigation business will help the company post strong fourth quarter numbers.