Jain Irrigation extends gains as budget seen focussing on farm sector

Jain Irrigation Systems moved up 2.81% to Rs 728.40 at 12:19 IST on BSE, on expectations that the Union Budget 2008-09 is likely to increase spending in agriculture sector, which may boost demand for the company’s products.

Meanwhile, the BSE Sensex was down 72.38 points, or 0.41%, to 17,753.61, as a sharp drop in US durable goods orders and US home sales fueled recession concerns in the world's biggest economy.

On BSE, 62,837 shares of the scrip were traded. The stock had an average daily volume of 43,478 shares on BSE in past one quarter.

The scrip had touched a high of Rs 730 and a low of Rs 706 so far during the day. The stock had hit a 52-week high of Rs 765.95 on 4 December 2007 and a 52-week low of Rs 399 on 28 February 2007.

The scrip had outperformed the market in the one month to 27 February 2008, adding 10.05% as against the Sensex's 1.47% decline. It had also outperformed the market in the past three months, soaring 18.03% against the Sensex's 6.20% slide.

The mid-cap farm products maker has an equity capital of Rs 68.07 crore. Face value per share is Rs 10.

At the current price of Rs 728.40, the scrip trades at a PE multiple of 27.46, based on Q3 December 2007 annualised EPS of Rs 26.52.

With India's farm sector expansion seen slowing, the Budget is expected to focus heavily on raising agricultural productivity and improving the lives of farmers. Jain Irrigation Systems manufactures micro-irrigation systems. It also makes plastic sheets plastic pipes, high-tech agriculture, processed fruits and vegetables.

Jain Irrigation Systems’ net profit rose 43.3% to Rs 44.85 crore on 36.2% growth in net sales to Rs 411.72 in Q3 December 2007 over Q3 December 2006.