Epic Research

Jain Irrigation (Buy)

CMP: ₹106.55

Target: ₹185

Jain Irrigations system Ltd (JISL), is engaged in providing solutions in agriculture, piping, infrastructure through manufacturing of micro irrigation systems (MIS), PVC pipes, HDPE pipes, plastic sheets, agro-processed products, renewable energy solutions, tissue culture plants, financial services and other agricultural inputs since more than 30 years.

JISL is a strong player is agriculture sector and has leading market share in most product segments. The recent focus by governments and incentives offered to farmers will add substantially for company’s growth. JISL has core strength in MIS and management has continuously worked on diversifying into other businesses. This will help company offer all products capturing the value play in agriculture sector.

Current consolidated order book stands at ₹4,025.3 crore, which includes orders of ₹1,831.5 crore for hitech-agri input products division, ₹890.1 crore for agro processing and ₹1,187.5 crore for plastic division.

We recommend buying JISL in range of ₹108-95 for long-term targets of ₹185 valuing stock conservatively at 18x of FY20E earnings.

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