Is Jain Irrigation share is good to buy?
Based on the last year’s worth of payments, Jain Irrigation Systems stock has a trailing yield of around 5.2% on the current share price of ₹19.05. If you buy this business for its dividend, you should have an idea of whether Jain Irrigation Systems’s dividend is reliable and sustainable.
Who is the owner of Jain Irrigation?
Bhavarlal Jain
Mr. Ashok Jain is the Chairman of Jain Irrigation Systems Limited and a well-known entrepreneur working for agriculture for the past over 4 decades. He is 56 years old and is the eldest son of Late Dr. Bhavarlal Jain, the Founder Chairman.
What is the business of Jain Irrigation?
Jain Irrigation Systems
| The Jains Plastic Park in Jalgaon, India | |
|---|---|
| Industry | Agriculture, Irrigation, pipe, Food processing, Solar energy |
| Founded | 1986 |
| Founder | Bhavarlal Jain |
| Headquarters | Jalgaon, India |
What is the future of Jain Irrigation?
Jain Irrigation will operate in 3 different segments / divisions in future and the interest cost will reduce from Rs 400 cr to Rs 200 cr. Sustainable debt for the company will happen at 9% and unsustainable debt will happen at 0% for a period of 8 years. This is the entire restructuring plan of the company.
What is the problem with Jain Irrigation?
The trouble for Jain Irrigation began after it reportedly failed to secure payments from the government despite executing irrigation projects based on government subsidies. The debt pile, liquidity issues and delay in servicing debt prompted rating firms to downgrade the company.
Why did Jain Irrigation fail?
What is the cost of drip irrigation per acre in India?
For crops that are planted in 6X6 pattern drip irrigation cost only about Rs. 35,000 per acre. Nowadays the cost of drip irrigation in India varies from 45000 to 60000 Indian rupees per acre.
Is Jain Irrigation debt free?
What Is Jain Irrigation Systems’s Debt? As you can see below, Jain Irrigation Systems had ₹60.2b of debt at March 2021, down from ₹69.4b a year prior. On the flip side, it has ₹9.05b in cash leading to net debt of about ₹51.2b.
What’s wrong with Jain Irrigation?
Rating firms had downgraded the company due to delay in servicing debt. Last year, S&P had downgraded it to ‘D’ (default grade) for missing interest payments due on February 1, 2020. Similarly, Care Ratings had downgraded Jain Irrigation to ‘D’ in 2019 due to a delay in servicing debt.
Can Jain Irrigation emerge from this debt trap?
“We see Jain Irrigation as being caught in a debt trap, as working capital and interest payments have been eating into operating cash flows, leaving negligible amounts for debt repayments,” wrote Amit Murarka, an analyst with Deutsche Bank Research, after JISL announced quarterly results in May.
What happened to Jain Irrigation Systems?
The company ran into trouble after executing irrigation projects based on government subsidies. After completing the projects, it failed to recover money from the government and receivable piled up over the years amid increasing debt burden.