Infra creation through irrigation to rise: Jain Irrigation

Written By Unknown on Selasa, 03 Maret 2015 | 12.44

In an interview to CNBC-TV18, Jain said his company has a 50 percent share in drip irrigation and he sees huge potential in this segment in the coming days.

The proposals in the Budget will increase infrastructure creation through irrigation, feels Anil Jain, Managing Director, Jain Irrigation .

Among other measures for agriculture, the Budget has allocated Rs 1800 crore for micro-irrigation

In an interview to CNBC-TV18, Jain said his company has a 50 percent share in drip irrigation and he sees huge potential in this segment in the coming days.

Below is the transcript of Anil Jain's interview with Latha Venkatesh and Sonia Shenoy on CNBC-TV18.

Sonia: What is your own assessment of the allocation that has come through for the micro irrigation sector and in particular what is the pure allocation to micro irrigation system (MIS) that has come through this time around and what would the impact be on a company like yours?

A: Impact definitely would be positive. What they have done is clubbed couple of different programmes of the government related to irrigation under Pradhan Mantri Krishi Sinchai Yojana. The direct allocation to what they call 'per drop more crop', which is micro irrigation is Rs 1,800 crore.

Also the Pradhan Mantri Krishi Sinchai Yojana has about additional Rs 2,000 crore allocation where again micro irrigation is part of that. So some of those details would become clearer in next few weeks but overall it is a substantial increase compared to what it was last year and also finance minister said in his Budget that if he sees tax buoyancy, this is one programme you will be giving additional Rs 3,000 crore.

So all in all, it is a big leap compared to what it has been and shows the government intent. They have this programme called har khet ko paani, so they want to bring water to every farm and then use that judiciously. Over the next 8-10 years, this is going to be USD 30 billion size infrastructure project and this is just a start in that project. Every year, I hope they will be able to deliver on this infrastructure creation through irrigation.

Latha: How much are state governments involved in a micro irrigation and related activities. I am asking you because they are about to become very rich, they are going to get a goodish bit of money which is going to be untied to anything. They have got the same amount of money from the centre even in earlier years but they would be tied to power or roads or something that the centre was pushing. Now it is like free for them to use as they pleased. Do you notice or do you expect a step up in irrigation related work?

A: Definitely because the irrigation is very close to the hearts of the state government because they have to face the farmers literally on a daily basis. Farmer productivity in rural area becomes very important.

In the past what we have seen is in states like Maharashtra, Andhra Pradesh and so many others, they wanted to provide more funds for things like micro irrigation but they couldn't and they used to draw loans from National Bank for Agriculture and Rural Development (NABARD) under the Rural Infrastructure Development Fund (RIDF).

Now they will have their own funds and I believe compared to a lot of other programmes, this is one programme where they can clearly see benefits being given to small farmers where productivity goes up and water is saved and all other costs are saved. So all of that put together, I feel this would be one programme where they can prioritise allocation. Now one has to wait and see the new Budgets which will come in the various states -- quickly whether they are able to use this opportunity to immediately increase but that direction is definitely going to be very positive.

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Jain Irrigation stock price

On March 03, 2015, at 11:14 hrs Jain Irrigation Systems was quoting at Rs 70.95, up Rs 1.40, or 2.01 percent. The 52-week high of the share was Rs 133.45 and the 52-week low was Rs 57.25.


The company's trailing 12-month (TTM) EPS was at Rs 1.05 per share as per the quarter ended December 2014. The stock's price-to-earnings (P/E) ratio was 67.57. The latest book value of the company is Rs 50.88 per share. At current value, the price-to-book value of the company is 1.39.


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