Ladies and gentlemen, good day and welcome to Jain Irrigation Systems Ltd Q1 FY 2027 earnings conference call. Today we have on the call Mr. Anil Jain, CEO and MD, and Mr. Bipeen Valame, CFO. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Anil Jain to take us through the company's business outlook and financial highlights, after which we will open the floor for questions. Thank you, and over to you, sir.
Thank you. Good afternoon to all the listeners on the call, and thank you for joining our call. This call is about the Q1 results for Jain Irrigation. Today we also had our Annual General Meeting followed by the board, and in the board, the results were approved. As we spoke, I think sometimes in May, it was anticipated that the first quarter would be a muted quarter. As a company, overall our revenue has been about 2.5% less than the same period last year at about INR 1,500 crores. Within different segments, I think Hi-Tech segment registered a degrowth while Plastic was almost similar to the last year same period. Agro-Processing registered significant growth due to additional beverage business and some growth in our overseas market.
While overall revenue has remained similar, there was a reduction in EBITDA because especially standalone India business, we had less fixed cost absorption because of lower volume due to volatility linked to raw material prices and demand postponement. That has resulted into lower EBITDA, especially in the Hi-Tech division. In fact, Plastic divisions improved its EBITDA and Agro-Processing also had seasonality issues to register lower EBITDA and impact on the Forex side was negative compared to the similar period last year. All in all reduction in EBITDA temporarily in this quarter. But we believe we should be able to catch up in the second half of the current fiscal year to cover what is lost. In terms of when I look at the margins, Hi-Tech division delivered about 14.4% margin versus similar period at 16.6%. So approximately 2% reduction.
Plastic, in fact, improved by about 1% or so, from 10% to 11%. Agro-Processing also came down by about 3%. Post all of these changes in the margin profile of the company, adjusted PAT after adjusting the non-cash in city interest unwinding, adjusted PAT at about INR 3 crores versus last year's INR 30 crores, but company has still remained profitable. Overall, when we look at this quarter, the revenue we have been able to almost maintain at similar levels. EBITDA margins are down by about 2% or so, but mostly linked to unabsorbed fixed cost, which can be captured in the second half. Adjusted PAT has remained profitable. In April, month of April when we were there, we felt that situation was going to be much worse. But I think May and June we did better. July continues to be remaining good.
Things are definitely improving than how the year started, especially due to volatility linked into the business. While this is consolidated result on a standalone basis, again, majority of the degrowth of this quarter particularly came from standalone business. While overseas consult business and business of food-based company has done well. If we and even on standalone basis on adjusted PAT basis company has remained profitable and also having the good cash. If I look at the cash flow statement, the EBITDA of INR 164 crores, almost about 78% of EBITDA, we have been able to convert into cash flow. That is quite a positive sign in terms of management of the working capital which we have done. I think that's a big plus. This was possible due to further improvement in working capital cycle.
If we look at and consolidate the entire company basis, net working capital last year this time, June 25, was about 210 days, and this year it has come down to 183 days. That's a significant improvement during over last one year. Even on a standalone basis it has come down from 296 days to 283 days. That's a big improvement. If I just compare with March 2026, also it was 186 days and now it is 183. That's the improvement. This is despite all the volatility which was out there. In terms of business potential, in terms of looking forward in the remaining three quarters, second quarter typically also remains mute because of the rainy season.
But the good news is, there was a fear that a huge amount of this Super El Niño will emerge, and that would have a disaster in terms of total rainfall. But we have seen good level of rains in July. That would mean the farmer got adequate moisture into their soil for the crops to sustain themselves, and it is expected over the next couple of weeks, some good rains will continue in the country. By and large, there was a big deficit in June because of the delayed onset of monsoon. That was kind of covered partly into July, and we hope also into August. The news about the monsoon and the weather and the climate change is not as bad as it was forecasted.
I think that's a positive thing as far as we are concerned for the rabi crop and for the next year's summer business. This will be very positive. Majority of dams in the country have water levels filled up to now two-thirds, 67%, and by the end of the monsoon, if they do hit 80%-85%, that means adequate water availability for irrigation for next hot summer also, which is positive. The reduction in the revenue in the June was partially caused by postponement in the purchase decision by customers due to very high prices. Second, it was also because the delayed onset of monsoon, so farmers were not ready to sow their crop. Of course, then they couldn't also take the irrigation systems as well as pipes. But since then, as I said, July has been better.
We have registered already a positive revenue growth in July as against April to June quarter of significant revenue growth here. August and September also seem to be good. But especially, we think with the kind of negotiations we are doing also with institutional customers for larger diameter pipes, we see lot more kind of suppressed demand coming through. Subject to a little bit more stability on the geopolitical event, where oil stabilizes and the polymer prices come down a little bit more than where they are, I think that would give that trigger momentum for the growth into the business. So reasonable quarter, but far more needs to be done in the second half of this year, and that looks good. The signs and the indicators are positive. In terms of, as I already talked about, cash flow was positive this year.
In terms of overall cash flow, we have been able to generate post-working capital changes has been positive. We have been able to maintain margin, except small reduction linked to unabsorption of fixed cost, and that can be covered in the rest of the year. In terms of the main major issue, which I think is there, is on the balance sheet. This year it's about INR 690 crores worth of debt of the NCDs falling due in the current fiscal, partly in September, partly March. Approximately INR 230 crores in September and the remainder in March of that INR 690 crores. Or maybe I think INR 680 crores now, approximately. So we believe that, as we have said this earlier, company will be able to take care of these obligations in the current year through its cash flows.
Company is also pursuing other alternatives as the backup plan, just as a matter of prudency in terms of to ensure that come what may, our company does and will ensure that all obligations are paid on time as we have done in last four years. In terms of rest of the capital, in terms of working capital, that has been managed properly. I think we have good support from current working capital banks. They have approved additional limits, new limits. So I think that thing is going well. I think bankers understand what has happened due to this West Asia crisis, the impact when suddenly if your raw material prices go up by 50%, what happens. So they have provided necessary support to the company to come through this crisis and come out well. We're very thankful to them.
But at the same time, we're quite optimistic about the remainder of the year. Overall, overseas Plastic business did well. Approximately a significant growth of 40% or so in terms of revenue. Because of that performance, I think overall EBITDA margin for plastics have improved in this quarter for us. In terms of structurally where we are going I think we are entering into a cycle post this season, where every single product line of the company, whether it is about irrigation business, piping, solar pump, tissue culture, food processing, we are seeing growth opportunities. So we're quite positive there.
As I said, this first quarter was combination of postponement of decisions by customers due to high prices, delayed onset of monsoons, less sales related to the project category, which is like companies consider decision to get out of that particular type of business, as well as almost limited billing related to Solar Pump business, which will pick up in the second, third, and fourth quarter. So I would say that overall, first quarter results are muted, but we remain confident on the rest of the year. When I look at the details of the business, within our retail business, I think we did quite okay in our Hi-Tech business in Maharashtra or in western parts of the country. Even in North, the business grew.
The business which did not grow was linked to government subsidies, where we had opportunity to take revenue, but that would have meant a lot more impact on the cash flow and long receivables. So we chose not to do that business. Otherwise, I think this revenue negative growth, what you see, would have been actually covered, because easily we could have sold INR 50 crore-INR 60 crore more of Micro Irrigation, but that would have meant many more longer receivables. Especially this year, with so much of debt due, we are choosing to pick up business which is more and more cash flow- positive or quicker turnaround and cash -to -cash cycle. So that is where it is. In terms of overall receivables were compared to March, were down by about INR 25 crore in June.
We will continue to see between September, December, and March that to further go down, and those extra collections would get used to honor the necessary debt obligations which company has. In terms of structurally speaking, while the polymer prices went up, we have been able to pass on majority of the increases to the customers. If and when prices of polymers do come back, we think that would spur the overall demand into the business. So we are looking forward to get that done. So this is where the first quarter's balance sheet P&L, as one would call it, in terms of overall business cycle. I think we are getting into a stronger business cycle going forward. With that, I will stop here. I will again thank you for patiently listening to this update on quarterly basis.
We look forward to taking any questions you may have now. Thank you.
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and then one on their touch-tone phone. If you wish to remove yourself from the question queue, you may press star and then two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Your first question comes from the line of Ramesh with SJ Investments. Please go ahead.
Hi, sir. Thank you for the opportunity.
Hello. I can't hear you.
Just give me one moment, sir. Sorry. Just one moment. Yes, Ramesh, sir. Please go ahead.
Hi, am I audible?
Yeah.
Yes, sir.
Yeah. Sir, I was trying to understand in terms of government receivables, did we get any during this month? And how many more projects are left to go in terms of completion? These two questions.
I think last quarter, we received approximately INR 60 crore from the government. And I think month of July, another INR 25 crore-INR 30 crore have come through from the government. We see that as the rest of the year goes, it will continue. In terms of the projects to be completed, I think hardly now, you saw the total billing on the project was maybe INR 24 crore or so for the quarter. I think second quarter could be maybe little even less. There is one active large project, which is in Pune for water supply, where we still need to do, I think, a triple-digit billing going forward, the remainder part. But most of other projects, like 98%, 99% done, very small amounts are still left.
Sir, how much more scope of work is left? Hello?
In the other projects, apart from the one project in Pune, I think total billing left is about approximately closer to INR 40 crores-INR 50 crores only.
In terms of the working capital you need to spend on it, is there more to go?
No. I think we don't have to spend any working capital.
Okay.
It's mostly the last mile connectivity, et cetera. The material supply, the component supply, all of that has already happened. It's mostly service-related remainder of the work, which is co-dependent on something else. The [awardee] has to do, the [TWAD Board] or the Irrigation Board, they need to provide certain things for us to do the last connectivity. No working capital is required to complete the remainder of billing.
Understood, sir. Out of the number of projects we did, how many of them had an O&M component, and is there an O&M component with these projects?
Can you come again, the last part of your question?
Yes, sir. Is there an O&M component to the EPC projects, and will there be some remaining work we need to do over the next few years out of the overall project values we probably recognized over the last years? How much more is there to go?
I think out of the 70 projects, 72 projects which we have completed or in process of completing, I think about 10- 12 projects have O&M over the next two to three years. On that O&M, if we need to spend money on O&M, we are also going to bill that in that given year. This is the O&M total, our experience on the remainder projects over the last seven, eight years. The total spend on O&M is quite light. It's not going to impact either my working capital or cash flows materially.
Understood, sir. One last question with regards to our scope. Over the last few years, I think we had few additions because of increasing costs of completing the project. Were these clauses actually built into the initial contract, or were these afterwards negotiated?
When you start the project, it's a tender bidding process. You do based on the scope of the work. What happens when you actually go and do the project, because in one project, we are doing 100,000 acres. You always find certain things which were different than what was presented in the tender documents. In that cases, then you go and seek a cost plus from the tender authority or your customer, saying that there are changes than the original scope, and therefore, we need to do more billing. When they do give the additional escalation, as it is called. Some places there is a cost escalation, some places there is a change of the scope.
I think if I go back in terms of totality of the question, by and large, what we originally anticipated and billed, we have been able to get, and whatever extra we needed to spend because change of scope or delays. For that, we received escalation or cost increases. That has worked out fairly, I think, even in terms of the profitability coming from this project. What has really hurt or impacted company is the delayed cash flows and delayed cost of interest on, if you are not received money in time. Scope, the total billing which we did is in line with or with the changes have been paid for by the customers.
Understood, sir. But one question-
Sorry to interrupt, Ramesh. We request you to return to the queue for any further follow-ups, please.
Yes, sir.
Thank you. We take our next question. Before we take our next question, I would like to request all the participants to limit themselves to two questions each and rejoin the queue for any further follow-ups. We take our next question coming from the line of Sumit Kumar with Magadh Securities. Please go ahead.
Good afternoon, sir. Am I audible?
Yes. Good afternoon.
The company still has to repay INR [674] crores in rest of nine months of this financial year. By seeing the present state of affairs, it seems very difficult to repay or fulfill these debt obligations. What are the options available with the company? Is the company thinking for some asset monetization or taking new loan to repay this debt obligation?
In fact, if you see our last three and a half, four years, three and a half years rather, our company has repaid to the banking system approximately INR 1,300 crores. With now having completed the project this year, to pay whatever is due, the interest which are falling due, we feel fairly confident of doing so. In terms of options available to the company, one, the first and most important option is internal accruals. Second option is collection of the older legacy receivable. Third option is the part amount can be some level of asset monetization, such as surplus land. The fourth option would be refinancing. There are multiple options available to the company, and as a prudent policy, in consultation with the lenders, we are working on all of these options at the same time, and we feel very confident that there won't be any issue.
Sir, the second question is regarding the old receivables. These were something around INR 800 crores-INR 900 crores. Out of those old receivables, how much the company is expecting in this financial year, that is financial year 2026-2027. Sir, how much out of this INR 800 crores-INR 900 crores would be recovered?
I think our target this year was about INR 422 crores to be received. INR 60 crores we already received in the first quarter. The remainder of nine months minimum, and this I am talking minimum, target is INR 380 crores will come from that in total.
Yes. Thank you, sir.
Thank you.
Thank you. Your next question comes from the line of Ravi Kumar with Varga Investments. Please go ahead.
Yeah, hi. Thanks for the opportunity. My question is relating to slightly more strategic. While we've done excellent job in terms of reducing the DSOs and working on a tight ship. Jain Irrigation looks like a very asset- heavy but cash- light company, and for historical reasons. I've been an investor right from the time it was INR [1.25], the share price, and went through INR 3 and now whatever it is today. So I've gone through the whole cycle. Why are we not doing the same kind of a campaign, what we did for the pivoting our business model from a project business to a retail model, and also from running a very tight ship in terms of the way working capital is. Why are we not doing a identifying non-core assets which doesn't impact revenue, which does not impact profitability, and go on a little aggressive monetization model?
Even the Tamil Nadu land, which we thought will be over by May, we haven't heard anything from it. That's my first question.
Second? So I can answer both together.
Okay. The second question is with respect to the food business side, the Agro-Processing. What is the beverage? This is a new business which was not there in last quarter. If we remove that line, or if you can just give us the revenue, what was the revenue? That would be great. Just a third follow-up slight one. What is our 180-days plus receivables or maybe 180 or 240 days, whatever the way is, if we can get the receivables which are old due, that will also give us some kind of a figure, how it is moving.
Yeah. Thank you. I think there are three questions there. In terms of monetization, I think, as I said, with whatever we have done, we have repaid to banking system INR 1,300 crores, through changing of the business, pivoting business. We did generate significant amount of free cash flow during this period of time to be able to take care of the debt and that process continues in the current year. I think from next year you will start seeing the dividends, which will come from positive cash flow, which go into the growth of the company. In terms of the monetization, right? We have gone through two cycles of monetization. I think first monetization we did in 2022, 2023 period. At that time, the debt was INR 7,000 crores. Today it is a little bit less than INR 4,000 crores.
We did do monetization of significant amount of our overseas business, et cetera. Right now, because of the restructuring which was done along with the banking system, there were limitations of what you can do and you cannot do because of the framework of the restructuring which existed. I think from next year, value-based monetization, which can create growth for the company, will happen. In terms of the Tamil Nadu land, it got delayed somewhat. I think maybe I referred to it, it was also elections there in April, May, which took place. But it is certainly happening. Again, we are working with lenders and I think that should get hopefully delivered in the current quarter. So, we are onto it, right? The whole idea is that once you pay off these NCDs from next year, standalone India business, there is no debt to pay.
Except the normal continued working capital which is renewed every year. Then the debt is still left in the food business and, as you know, last, I think one year we have taken decisions to take food business to the next level by introducing the new beverage business, and so on. The beverage, your question was that we did approximately INR 60 crore into the food business in April to June quarter into that business. In terms of the receivables, which are above a certain period of time. Mostly the government-related receivables are above 180 days. They are either linked to this, what you call, the project EPC business and/or linked to what we call where state governments place order on the company, on behalf of the farmers. Governments of Andhra, Telangana, Gujarat or Tamil Nadu, and sometimes their receivables take time to come through. This is industry-wide.
It is not just Jain Irrigation. That is the way business is conducted for all the irrigation companies in those particular states. So that amount is approximately, I would say, total outstanding related to these farmers placing orders on us on behalf of the government, is approximately INR 500 crores. Out of that, I would say about INR 300 crores would be above 180 days. And there is INR 800 crore-INR 900 crore we talked about of the government receivables, which is also above 180 days. So about INR 1,100 crore is above 180 days. So if you look at overall net receivables for June were INR 1,975 crores. So out of that, almost 55% are linked to these issues, and the remainder would be the normal domestic receivables or export receivables.
Just a small follow-up, sir, on the last-
Sorry to interrupt there, Ravi. We request you to-
No, it is just a suggestion.
I do understand sir, but there are several other participants waiting for their turn. Really sorry to interrupt, sir.
Just wanted this to be included in the investor presentation as a follow-up so that we don't have to ask this question, at least for this year. That's all.
Okay.
Yes.
We will keep that up. Thank you.
Thank you. Your next question comes from the line of Vinay Chaudhary with Invexa Capital LLP. Please go ahead.
Hello. Yeah, hi. My question relates to the Hi-Tech division. We have seen a significant degrowth this quarter in Hi-Tech. We, of course, are facing, we are consciously reducing the project division within this. However, having said that, the non-project part of the Hi-Tech is also implied to be not growing significantly to offset the degrowth in the conscious strategy of reducing the project. Where are we, and why is, we are having a significant, almost 22% YoY degrowth. Of course, on an EBITDA level contribution, it is about more than 50% degrowth. Can you throw some light on this, please?
Yeah, that is a good question. In fact, if I look at the Hi-Tech division, there are three parts to the division in terms of product line. One is Micro Irrigation or the drip irrigation, Tissue Culture, and the Solar Pump business, and the projects which are there. If I break up that 22% reduction in revenue, the retail business, which would cover the MIS, the Tissue Culture, Solar, et cetera, that degrew by about 17%. The project, which is by design, is going to go down, degrew by 63%. Let us focus on the retail business, which degrew by 17%, between the three product lines. MIS, which is the drip irrigation business, it degrew by 16%, from INR 438 crores to INR 368 crores.
The reason it degrew, as I said, because of the delayed onset of monsoon, the normal sales which were going to happen in June did not happen, and they have been postponed to the current quarter. That would be covered in the current quarter. The second part, which I said that the polymer prices went up 50%, so we had to pass on the price increases. Some of the customers decided to postpone the decision till the time prices come down. We think this is one-off. In fact, if I look at 2025 to 2026, Micro Irrigation and this Hi-Tech division grew for the whole year more than 20%. Current year, also, we are planning that the business would grow. This quarter was an anomaly. Similar thing, Tissue Culture business degrew by 10%.
Again, the farmer could not sow the plants because there was no irrigation or water available. That is why it was a 10% reduction. Solar goes by order to order. Last year, we grew Solar business by 300%, Solar Pump business. The March quarter was a big quarter for us. We are focused on the first quarter and even July, August to recover all the funds after those from the Solar Pump business. Then, you will see significant growth coming from Solar Pump from September onwards. Partly what you are seeing is linked to the volatility in polymer prices, partly postponement of purchase decisions, and partly the Solar business seasonality which will be picked up post-September.
All in all, I think because this is the most important business in terms of profitability, that this would be a business which would maintain more than double-digit growth for FY 2027. In terms of, you mentioned profitability, the Hi-Tech margin went from 16.6% to 14.4%, about 2.2% reduction. That was due to the volume growth being not there. Our guidance for the whole year is that the margins, what we typically make, would be maintained in this business.
On full year basis, you are saying that despite this fall of 2%-2.5% on a company level degrowth, we are maintaining a full year revenue as well as margin o f 20% revenue growth and margin of 12.5%, 13%?
I think we have said double-digit revenue growth because the situation is still not that stable. But in terms of overall margins, the consolidated margins last year in this quarter were 13%, but we came out at 11% across all divisions and businesses. I think this reduction will definitely be covered. In terms of overall margin for FY 2027, despite all the changes and volatility, we remain fairly confident to maintaining at about 14% on standalone and approximately 12.5%, 13% on consolidated basis.
Okay. And lastly, on the-
Sorry to interrupt, Vinay, sir. We request you to return to the queue for follow-ups, please.
Sure.
Thank you. Your next question comes from the line of Parag Khare with PK Investments. Please go ahead.
Yeah. Good evening, sir. Thank you for the opportunity. Am I audible?
Good evening. Yeah, you're audible.
Okay.
Please go ahead.
Just a question on these old receivables. I know you talked about how much is receivable, how many projects we are doing. Do we have any doubtful project where we may have to write off a certain amount? I know, historically, we haven't written off any significant amount as of now. But do we see any negative surprise somewhere going down the line, probably in the next nine months from now, which may have a slightly negative surprise for us?
No, I think when we looked at and reviewed all the projects, and this goes back to 2021, 2022, that period. Historically, these projects were built and so on. At that time we took a conscious call, we reviewed all the projects, and at that time we had made necessary provisions in the books. As these receivables which are standing, so the net good receivables standing in the books at the end of June of INR 1,975 crores, there is always few crores here and there, but we do not really anticipate any material or any significant write-offs at all from projects. All the project receivables which are there today in the books, what we are looking for, what has not already been provided, are good to go, and they would be received.
Now, it has been partially time, the delay in getting project completed, the restructuring of businesses, all that happened, partly because state governments have been prioritizing a lot of freebies, so they do not pay the EPC contractors, et cetera. This is not just our case. I think if you've been reading news in the past about Karnataka or Maharashtra, like INR 80,000 crores not paid or INR 100,000 crores not paid and so on. But we have seen movements. As I said, just last quarter we received INR 60 crores. We are hoping at least minimum INR 380 crores in the remaining nine months, which we are now quite confident of because things have really progressed fast. Just to summarize, no hits on the project receivables and a significant amount of collection this year.
Okay. Sir, second question is on the working capital lines. I am talking about the standalone working capital. For the four years it has its own cycle, it has its separate working capital lines. But if we see standalone business, our working capital is like INR 1,500 crores, INR 1,600 and up crores. If we compare to some of our competitors domestically, our working capital requirement seems to be slightly on the higher side. Do you want to pinpoint any specific reason why we are on the higher side in terms of working capital requirements with respect to our competitors?
Yeah. When the known, I think listed competitors are mostly in piping business. Their working capital cycles on the plastic piping side are much lower. If I really dissect my working capital also on the similar basis, you would find that also we are actually in line or in fact we did some internal comparison. In some cases, we are even better compared to listed other organizations. Where we have a higher amount, you mentioned INR 1,500 crores, INR 1,600 crores. It mostly comes from the legacy receivables of the projects, where there are long-term receivables. Also, I talked about where state government, you order on behalf of the farmers, and we get paid between six months to one year. That is where our working capital is higher.
On irrigation company business, there are very few, I would say, listed entities and of the size and scale what we have. That's the main reason, but I think maybe sometime next year for we talk about FY 2028, once the project receivables are off, you would see that while our overall we have improved from where we were, it would substantially further improve, especially receivable cycle.
All right, sir. Thank you for the opportunity and good luck for Q2.
Thank you.
Thank you. The next question comes from Ashwin Reddy with Samatva Investments. Please go ahead.
Yeah. Hi, sir. Good evening. Thank you for the opportunity. My first question is, given that so far the refinancing of debt has not happened, I am sure there would be a reason for that or some pushback from the banks. I am curious, what is the pushback that you have been getting so far? Also linked to this, what will change now that gives us the confidence that the refinancing will happen?
There is no pushback. I think because the payments are only due in September, right? End of September. The first payment and the next payment is due in March. We are definitely within the timelines to get this done. Not only that we have negotiated, we already have couple of term sheets in hand and discussions are ongoing. As I said that regardless of refinancing, I think company will have adequate internal cash flow to honor the obligation.
Okay. Got it. But sir, the efforts to say for the land monetization you explained, but even the IPO efforts have not materialized in a year and a half or so. What is the delay there? What is the reason for the long delay and does the PE partner not have a timeline by when he has to exit and all? What is the scene there and what is the reason for the delay in the IPO? It has been a very long delay.
Okay. This is about the food business. I think, the total expected issue or IPO on the food business was comparatively of a smaller size. In terms of the exit of the existing PE player plus additional funds being raised, let us say, primary for the company. The total expected figure was around let us say, INR 1,000 crores. What the merchant bankers advised that the market, maybe last couple of months things have slightly improved.
Right.
But compared to expected valuations for last four quarters, market had really gone down. I think, let's say end of December, a year ago, 15 months ago, merchant bankers had given us some indications of likely valuation of the food business, which was in fact higher than even the valuation of the main company, based on the comparables and whatnot. But since then, that valuation went down considerably, generally in the market, because, whatever the market scenario was, and I think, there were pending more than few hundred DRHP filed where people were not bringing IPO, all that statistics you guys know. So their advice was to actually to wait and watch. Meanwhile, some of our new business was taking place, like beverage business, et cetera. So we stayed focused on that.
I think, as we go along, as we move forward post September, if the market improves, that something would be seriously looked at. I think, I am thankful that our PE investor there is patient because they are looking for good value. Underlying business, I think again, as a unique business of a certain scale size, including global opportunities within that business, we think, eventually, it should get a good solution.
Got it. Okay. Thank you. I will come back in with you.
Thank you.
Thank you. The next question comes from the line of Ankit Bansal with AB India Limited. Please go ahead.
Hello, sir.
Yes, Ankit.
Sir, my first question is, sir, why there is a loss of PAT when the revenues are not down, sir? How much more quarters we have to serve this unsustainability we have to follow, sir? As an investor, we want sustainability as a company shareholder in Jain Irrigation. Sir, please, can you explain, sir, this?
I think this particular quarter.
Hello?
Yeah. So, this particular quarter, as I explained, was a much higher cost of raw material and lower business out of the India segment, which is traditionally more profitable. As I explained earlier in the call, that that's a temporary phenomenon, but for the whole year we should recover. So for whole year, we should do better than the last year in terms of profitability, at PAT level. On adjusted PAT, we are still positive. If we take off the notional NCD interest cost. So, I'm with you. With all the efforts which we're making, the idea is that company should not only generate the good free cash flow, but generate at a PAT level EPS. That's where we are going.
I think what we have not been able to do in the first quarter, and I think second quarter is always mute, but you should see improvement in the second half of the year.
Okay. Sir, the memorandum that you've done for the coffee business, has the revenue started flowing? What is the new biochar plant that you have started? What kind of business is that, sir? Can you explain, sir, this?
Yeah. Coffee, we have received the first orders from the Coffee Board, so that revenue has started. In terms of the biochar plant, as you know, we deal from farmers. We buy from them fruits, vegetables, et cetera, apart from selling them irrigation. Biochar means that we are buying from farmers the agriculture waste, corn cob or the cotton stalk or mango stones, et cetera. Adding value, and going through a digester, where you create biochar, which would be used again, partly as a media in our Tissue Culture business only, and partly given back to the farmers for the soil conditioning and so on, which will generate, again, higher productivity for the farmers. Business where you're creating wealth from the waste. On the top of that, you will get the carbon credit. The whole process of getting carbon credit takes about six to nine months.
Once it starts, it keeps moving. So it's a value-added business. I think the opportunity is very large because India is one of the largest arable area in the world in terms of agriculture. A lot of waste is being generated, and that waste, you read it in Delhi and other places, all this stuff being burned and that creates all the pollution. This way, if you can take all that waste and convert that into biochar, it's a win-win situation for everybody. So that's the business we're starting with, as I said, mango stone, corn cob, and cotton stalk, and then we will look at other waste agricultural material. So it's a very exciting project. You will start seeing, because project has recently started, any impact on numbers from the next fiscal.
That further cements our relationship with the farming community, and helps us to create more value.
Okay, sir. Aren't you think your small business in the-?
Sorry to interrupt. We will be able to take that as the last question for today. With that, I will now like to hand the conference over to the management for closing remarks. Over to you, team.
Yeah. Again, I would like to thank all the participants, especially for all the questions. I am sorry one or two questioners couldn't complete them. You can separately reach out to us too with their question, and we will be very happy to answer. Overall, I think we are very confident for the rest of the year. This first quarter was, things were a bit beyond our control, and we are very confident on honoring the debt obligation. We don't see that as an issue. Second half, I think we will be having really strong numbers. We thank you again.
Thank you, members of the management. Ladies and gentlemen, on behalf of Jain Irrigation Systems Ltd, that concludes this conference. Thank you everyone for joining us, and you may now disconnect your lines. Thank you.