Ladies and gentlemen, good day and welcome to the Q4 FY 2025 earnings conference call of Jain Irrigation Systems Limited, hosted by DR Choksey FinServ Private Limited. 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 call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this call is being recorded. I now hand the conference over to Ms. Bhavya Sharma. Thank you, and over to you.
Thank you. Good evening, everyone, and welcome to Jain Irrigation Systems Limited earnings call to discuss the Q4 and FY 2025 results. Today we have on call Mr. Anil Jain, CEO and Managing Director, and Mr. Bipeen Valame, Chief Financial Officer. We must remind you that the discussion on today's call may include certain forward-looking statements that may involve known and unknown risks, uncertainties, and other factors, and must therefore be reviewed in conjunction with the risks that the company faces. Future results, performance, or achievements may differ significantly from what is expressed and implied by such forward-looking statements. Please note the results and presentations are available on the exchange and our company's website. I now request Mr. Anil Jain to take us through the company's business outlook and financial highlights, subsequent to which we will open the floor for Q and A. Thank you, and over to you, sir.
Welcome and good evening to all the participants and listeners on this company's con call. We really appreciate you spending time and listening to us. We have announced the results earlier today, post our Board meeting, for the Q4 FY 2025 and for annual year 2025. Overall, we are quite, I think, satisfied with the current quarter's results. Where on console basis, our revenue is up almost 1.3% to approximately INR 1,750 crores. EBITDA is up by 3%, to at about INR 225 crores. Within this revenue growth, what is important is that one of our higher earning business, which is Hi-Tech division, which comprises of Micro Irrigation as well as Tissue Culture, has in fact grown 16.8%, which is quite positive. Even Agro Processing grew by 14.6%.
Both these businesses have shown, I would say, significant traction on the positive mode, which started in the third quarter and has continued in the fourth quarter as well. Overall, EBITDA in Hi-Tech business, in fact, grew approximately to 18.7% versus 13.4% in the same period last year. That shows that we could manage positive growth, higher double digit, as well as still improve the margin. That business seems to be on track and going forward even 2026 looks good. If I look at the whole quarter on a console basis, we have been able to reduce the debt by INR 104 crores, which is quite good. Cash flow from operations, post-working capital change at INR 283 crores would mean that we have been able to convert EBIT of INR 225 crores by 127%, to arrive at INR 283 crores.
While revenue growth was just at 1.3%, EBITDA was even better, but cash flow has been significantly better. Overall profit for the current quarter at INR 20 crore is far better than the losses we had in the same period last year. Overall, the results are quite good in terms of revenue, EBITDA, as well as profitability. The fact that we have been able to reduce the debt and improve quality of earning, I think that is an important message for this quarter. The Plastic Processing was one business which was still lower compared to the earlier year period, and that primarily was in the earlier year period we had significant sales related to Jal Jeevan Mission in terms of piping orders coming from the government, which was nonexistent this year. Whatever sales we have are related to retail sales this year.
Another factor for lower revenue on plastic pricing also has been the softening PVC resin prices. I think for the whole year basis, almost 6%-7% reduction in revenue on piping is due to reduction in the raw material prices. Still, we did lose about 20% of the volume on the piping due to lack of Jal Jeevan Mission orders, plus some additional lower sales in retail as well, where we sell to the farmers, where dealers due to elections in the current year, especially one in Maharashtra, and some other climate issues. Overall, we think that is behind us. We are seeing in the current new fiscal year already good demand on piping. I think that should overall do better going forward. If I look at standalone business, I think the Hi-Tech business again, was quite positive, grew quite well.
EBITDA in Hi-Tech business also grew from 12.7% to 15.6%. EBITDA for standalone business out of India, which is drip pipe and Tissue Culture, grew from INR 135 crore to INR 160 crore. Even though overall revenues were lower by 4% at about INR 1,000 crore. But EBITDA increased substantially. PAT as about INR 28 crore versus last year's INR 25 crore. We could generate positive cash flow, post-working capital changes of INR 132 crore, and with about INR 47 crore debt reduction. Another positive part from India business has been through the, not only this quarter but through the year, substantially better, I would say, export performance. Our exports in the current quarter grew by 43% to INR 177 crore from earlier INR 123 crore. This is for the Q4.
When we look at overall annual revenue and annual business, we have achieved close to INR 5,800 crore of revenue, which is approximately 6% lower than the same period last year, FY 2024 to FY 2025. EBITDA at about INR 717 crore, which is about 9% lower than the last year. That's the annual consult because of especially very weak first two quarters, these are the results, while Q3 and Q4 has been better performance. The higher level reduction in the EBITDA has come partly from Agro Processing business. Even though Hi-Tech business has maintained higher level margin. PAT for the whole year is at about INR 26 crore. From the EBITDA of INR 717 crore, we have been able to generate good amount of positive cash flow, post-operation, post-working capital changes at almost INR 842 crore.
That's a substantial improvement in cash flow generation from the business for the whole year. Because of this substantial improvement in cash flow generation for the whole year, we have been able to reduce debt by INR 257 crores. That means now our debt stands close to INR 3,500 crores. In retrospect, when you look at the whole year, the numbers on revenue and EBITDA are lower than the last year. But considering all what we have gone through, Q4 has pulled out quite nicely. For the overall year, cash flow has been substantially positive. We have been able to reduce the debt, honor all the obligations in time. Our Hi-Tech business is now back on track in terms of revenue growth as well as profitability.
Agro Processing also has maintained the revenue growth, even though due to specific challenges related to seasonality, availability of mango, short season, it has impacted our margins, but we have been able to maintain the revenue growth in that business for the whole year also. I think that is summary of the year which has passed by us. What's more important is what we are looking to do going forward in the current year. As things stand, we think quite optimistic and positive for FY 2026. We think we have an opportunity to achieve substantial higher level revenue growth. As we achieve that higher revenue growth, we expect even better EBITDA than the revenue growth. If revenue growth is, let's say, comes in high teens, closer to 18%+, EBITDA should grow to 23%, 24% because the factor related to fixed cost absorption.
We want to continue to maintain deleveraging, going forward in FY 2026 as well. As we could reduce the debt this year by INR 257 crores, I think our target next year would be to reduce the debt north of INR 400 crores, whether it is INR 400 crores, INR 450 crores or INR 500 crores, that depends on so many factors. But minimum level of reduction we would be achieving would be INR 400 crores next year. We are expecting high teens revenue growth overall on consult basis across all businesses. EBITDA higher level than revenue and reduction in the debt by at least INR 4 billion or INR 400 crores is what we are anticipating. Company wants to maintain the change in the business model as we are slowly reducing our reliance on the government project side every year. As we complete the old projects, overall revenue of government is coming down.
In fact, if you look at FY 2025, 15% reduction is primarily linked to reduction in the total government business we did almost by the tune of INR 150 crores, and INR 350 crore was the reduction into the JJM business. That's approximately INR 500 crore reduction we have had because of the two specific situations. Of course, there was no growth in the earlier quarter into our normal retail business, which as I've explained, is now coming back, as we speak. Fourth quarter for our Hi-Tech has already been positive. Going forward, we are optimistic and confident for better revenue growth, better EBITDA growth, significant reduction in the debt, as well as continued focus on generating free cash flow from operations. That is the single most focus we have.
But at the same time, in terms of retail business on Hi-Tech, the Micro-Irrigation, which is where we are pioneers, I think post our restructuring, post the COVID, all of that, I think we have got the grip back on the retail market. I think as we are developing more dealers, as we are doing more states, all of that, I think that should continue to pay good dividends going forward for both drip as well as Pipe business. The Tissue Culture business, again, it goes through cycles. We are getting into a positive cycle into Tissue Culture business. Next two years, we should expect 20%-30% growth in the amount of banana plants or pomegranate plants which we sell to farmers. I think that would continue to do well. Food Processing did well in terms of growth.
With good monsoon and expected reasonable quality for mango and onion business, this year margin should come back, which last year it took a hit. They should come back now with a better season in terms of availability of the quantities, as well as our ability to process at reasonable price. I think both are there in the current year. FY 2026 should be better on the Food, in terms of the margins as well. I think these are the developments. Overall, as I said, it has been a challenging year, but we have stayed the course, we have stayed focused on deleveraging, focused on free cash flow generation. In terms of revenue growth and the grip with the dealers and the marketplace, I think especially in Hi-Tech business, already last two quarters we have posted in India a growth of more than 15%-16%.
That is quite heartening, and we expect that to continue in the current year. Last year also, beyond the two reasons of lack of JJM business and reduction in the project business, another thing was we let some of the Micro Irrigation business go because of the very long working capital cycle in some of the states, where you do not get paid for at least a year or more. Almost to the tune of INR 200 crore, we decided not to do. These were the reasons, and we are seeing some of these states, at least out of four, two states have improved their payments now just over last one quarter. We could be doing a little bit more business there as well in the current year. That was another reason last year for less revenue.
This is where we are, and we are looking forward to a much better FY 2026 in every possible way. Now I would be happy to take your questions. Thank you again. Thank you for listening.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 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. We will take our first question from the line of Ankit Bansal from Kusum Investment. Please go ahead.
Hello, sir.
Yeah.
Hello.
Yes, Ankit.
Yeah. Sir, my question is, what is the progress in the product that of tissue culture of coffee for which you signed MoU with India Coffee Board? Sir, what is the progress in that?
I think we have signed the initial MoU with them, and we have done already, we have made trial supplies, initial for their pilot projects. One pilot project which has been going on there for almost a year has shown good results. We anticipate larger orders, but because this is the agriculture cycle, I think those will come maybe towards November, December, and onwards. While you ask this question about coffee, for a coming year, where we are, as I said, the Tissue Culture business could grow almost close to 30%. Major revenue growth will still come from three current large product portfolio we have. That is banana, pomegranate, and potato. Things like coffee, papaya, orange, or mango seedlings or tissue culture, those would still remain a minority for the next one year. Some of these other products will actually pick up between 2027, 2028 scenarios.
Next year, major revenue would still come from these three which I mentioned.
Okay. Obviously, the government is also focusing on, like we have heard about the pomegranate, the first consignment to Australia also.
Yes. These value-added products. I mentioned banana and pomegranate, both. You talked about consignment to Australia. The same way, if you really thought 8- 10 years ago, almost there was no export of banana, finished goods, banana. This year, I think government has announced some number that close to INR 4,000 crore exports has been achieved out of banana. Most of those bananas which farmers have grown for exports have come from the tissue culture plants which we have supplied as a company. As banana exports grow for fresh banana, that creates more demand for our tissue culture plants. Same way with pomegranate. Pomegranate is also getting sold more domestically apart from export. We have seen earlier, pomegranate was more from Maharashtra and nearby states.
But over the last two years, Rajasthan has come out to be a new star in pomegranate business, where large amount of pomegranate being grown in Rajasthan now also. So there are these areas of, you can call excellence. Like Jalgaon and Solapur are very big in banana. That way, certain districts in Rajasthan are becoming very good for pomegranate. So our company is working to provide the complete ecosystem solution to the farmers to excel in these crops. Then they can sell at good price in India as well as overseas. When these farmers buy tissue culture plants, then they could buy also drip irrigation from us. So that's what we are working on. Thank you.
Okay. Sir, second question. Sir, any progress in debt from government balances, like payment, you have delay in payment. Anything has come from government in this quarter or coming quarter?
This year we have received INR 200 crores from the government from various receivables. Coming year, we are expecting that figure to go to close to almost, because we have completed some of the project recently. So we are expecting this year the figure could be somewhere INR 450 crores- INR 500 crores should come from the government.
Sir, what is the total amount of receivables from government? Total.
There are two types of receivables. One is related to EPC projects, and I think those are approximately around INR 750 crores- INR 800 crores. Then there are drip irrigation-related business, what we call MIP, where the state governments provide orders on behalf of the farmers. That amount is closer to INR 375 crores. That is annual. That will keep rotating. The real receivables which will bring down our debt, and I discussed earlier that we expect debt to go down by INR 400+ crore , is based on the EPC project business receivables to come down. Now that these projects have been completed, we expect half of this amount of, as I said, INR 750 crores, INR 800 crores to come more than half this year and the remainder next year.
Okay. Sir, any chances of listing your subsidiary, Jain Farm Foods?
I think those discussions are, that is in our probability. In consultation with the private equity partner we have, I think we will be taking some decision in that regard through the Board of that company. As of now, no decision has been taken. We have had discussions and, I think based on some of those discussions and based on the market scenario, a possible decision could be taken.
Sir, how, at what time-
Okay. I request you to join back the queue, please, as we have other participants waiting for their turn.
No.
Thank you.
At what time, sir?
Kindly join back the queue again.
I don't want to be very specific as things stand, because that Board needs to make that decision. We need to get our partner equity investor also, who owns more than around 20%. After that only we can announce timing.
Thank you. Ladies and gentlemen, in order to ensure that the management is able to answer queries from all participants, kindly restrict your questions to two at a time. You may join back the queue for follow-up questions. We'll take our next question from the line of Vinay Chaudhary from Invexa Capital. Please go ahead.
Hello. Hi.
Yes, Vinay.
Just to continue on the previous participant's question. This stuck receivables from government, which was about INR 800 crores-INR 850 crores. INR 200 crores, what we have received is from the regular course of business or from this, the stuck receivables?
No. A good amount of that is stuck receivable. As we are completing the project, this year we had also project billing, I think around INR 170 crores or so. The new one. That's on net basis, you won't see receivables have come down. Even though old money has come, and that is what helped us to reduce the debt by INR 250 crore this year.
This is on the ongoing projects. Right, got it. This 50% what you're expecting in the current year, these are from which states are we expecting?
Primarily, money flowing this year would come from three states, Karnataka, Maharashtra and Madhya Pradesh.
Okay. Lastly, on the debt side, you mentioned that we will be repaying INR 400 crore. The NCD, if we refer to the PPT what you have published, about INR 855 crore will be NCD and if we adjust to the fair value. It has technically increased from INR 615 crore to INR 667 crore this year-over-year. How should we look at this?
Because it is the fair value scenario, right? As you go closer to the date, that value goes up, right? Every year.
Yes.
The full repayment of this is in 2027, 2028. This year, I think, as I said, we are going to pay on net basis INR 400 crore+ debt. Part of the debt reduction will be into long-term debt, normal term loans, and part will be reduction into NCDs. As we repay those NCDs, then at the end of the year, there is that fair accounting value, which will take place.
This INR 400 crore, what we will receive-
Vinay, I request you to join back the queue, please, as we have other participants waiting for their turn.
It was related to this. Okay, sure.
Thank you.
The amount the NCD will pay, what would Hello, please go ahead.
Yeah. We'll take our next question from the line of Prafull Rai from Arjav Partners. Please go ahead. Prafull?
Yes, I have two questions. What is the net debt we are expecting by year-end, given the cash flows we expect from the government?
The debt as of now, you see a INR 3,500 crore net debt.
Right.
As I said, INR 400 crore+ . Somewhere between INR 3,000 crores- INR 3,100 crores.
But you also spoke that the business is likely to see a high-teen kind of a growth and EBITDA. This is a pretty healthy number. Will this not require additional working capital for you to fund the growth?
No, that should be generated internal like role. We are talking about whatever additional working capital we will need would be generated internal like role. This is on net basis. After providing for growth, for providing for additional working capital, we believe we will be generating enough to, on net basis, to reduce the debt by so much. Actual cash positiveness would be more than this. Part will go towards working capital, part will go towards CapEx. After that, residual would go for reduction in the debt.
For this INR 700 crore of government EPC work which we are talking, what is the kind of investment we have to do, or sort of it is all done to get the money?
I think out of the INR 750 crores, we need to spend for the INR 400- odd crore which I talked about, which we should receive in the FY 2026. We need to spend only about maybe INR 20 crores, INR 30 crores. Rest we already done. Some of these projects are done 95%, 97%, at that level. Some other projects for which we expect to receive the remainder project, for which we expect-
Right
to receive money in FY 2027, there I think we need to spend about maybe INR 60 crores, INR 70 crores.
Okay. When you say a high-teen kind of a number, if I may ask, what would be the key drivers of this incremental growth? Because you are talking of a major growth as well as a large EBITDA expansion.
Yeah.
What are the key contributors, if I have to jot down, okay, of this 15%, 17% higher number, these would be the top three constituents in terms of contribution.
Yeah. We see a definite higher growth on the Tissue Culture side.
Let us say. We see a growth on Solar water pump side in terms of whatever numbers we have orders in hand, et cetera.
Right.
And additional growth in some of the states where states have started releasing the money faster in MIS, for example, Gujarat.
Okay.
Those are the places we see. We will recover some of the lost on the Pipe side. Pipe, we have had a negative growth as you see from last year numbers.
Correct.
But that would just bring us back to 2024 numbers, that growth.
Yes.
But real positive growth will come from MIS tissue culture solar pump.
And we are talking of solar pump, that is PM-KUSUM?
Yes. And only specific states. And another growth area for us is also exports. Last year also, I think exports have grown almost 40%, 43%.
Current year, we think we will still grow exports again, 25%-30% that range.
That would be some dehydrated vegetables and this and that, correct?
Around the world. Sorry?
That would be in the form of dehydrated vegetables and all what we export. Is that what largely export is about?
Exports, I'm talking of pipes, irrigation systems, things like that.
Okay. I agree. Thanks a lot, sir. I'm reiterating, we are talking of high-teens number.
Prafull, I request you to join back the queue, please.
Just one follow-up on this and I'll just close. We are just reiterating that we'll have a higher-teen growth and around a 2%-3% higher EBITDA margin because of operating efficiency for FY 2026. Is that what the number play?
Yeah.
That is INR 3,000 crore kind of net debt end of the year.
Yes.
Okay. Thanks a lot, sir. Thanks.
Thank you. Ladies and gentlemen, to ask a question, please press star and one on your phone. We will take our next question from the line of Dhvani Chanda from Altis Financial Partners. Please go ahead.
I wanted to know if you are looking to buy out some Pipe businesses or
Dhvani, I'm sorry to interrupt. Can you use your handset mode, please? Your audio is not very clear.
Yeah, we can't really hear you.
Hello. Is the audio more clear now?
A little better. Yes. Thank you.
Yeah. I was asking if you are looking to expand your Pipe business, the PVC Pipe business.
Yeah, we are definitely looking to grow our PVC Pipe business.
Okay.
I talked about by selling additionally into some of the existing states, as well as selling more into newer states. That is a definite proposal that we plan to grow that business quite a lot, I think over the next two to three years, but definitely in the current year.
Okay. Thank you so much.
Thank you.
Thank you. We will take our next question from the line of Praneeth, an individual investor. Please go ahead
Hi. Thank you for the opportunity. I was wondering about the piping business, basically. We have seen a decline because of the lack of orders from Jal Jeevan Mission, right? I was wondering how are the orders pipelined right now in terms of Jal Jeevan Mission. In overall revenue, how much is the institutional business? Because I think according to previous commentary, the management has mentioned that most of the institutional business goes to the Jal Jeevan Mission to service those orders. I was wondering, what is the institutional business over the last few years, and how is it expected to go forward? Is it going to be direct correlation between the Jal Jeevan Mission orders, or is it going to be something more? Are we going to sell to institutions apart from the Jal Jeevan Mission orders itself?
Sorry, I just want to complete the questions about piping divisions and is it fine. One more question is regarding the statewide split in terms of our piping distribution. What percentage of our revenue comes from each, which states? If you can mention the top five states at the moment, and where do we plan on going? Is it the top five or something else?
Yeah. Okay. So one by one. In terms of last year's plastic pipe business, where we make PVC as well as polyethylene pipes both, in terms of the growth, the reason for decrease was primarily lack of JJM orders, either directly from the state and/or via contractors. Second was lowering of the prices. The resin prices are lower, so therefore, revenue was lower. In terms of your second question in terms of what was our institutional sales last year. So institutional sale was, let's say, close to over INR 250 crores approximately. Mostly coming through polyethylene pipes, which do go mostly again into JJM via contractors or otherwise. Year before, that was INR 650 crores or INR 700 crores. So last year it came down substantially. Going forward, in the numbers I am talking about, that overall company should grow into high teens, including the piping division.
As of now, we have assumed a normal cycle on institutional sales. So almost same level as last year. We have assumed higher amount of exports because of the view we have in terms of various orders under negotiations. We have assumed some additional sales coming on the piping side from other institutional customers. For example, things like last year we did one desalination project, which was almost close to INR 45 crores. We are in the middle of negotiating few such projects, which are being put up in the country. So we expect some additional non-JJM institutional business coming from things like desalination and/or other type of applications. That is how we think we feel confident.
Now, if something was going to happen to JJM and center and state work together and they start releasing more funds, then that could be an upside to this number I am talking about. So this number is basically higher amount of exports, higher amount of non-JJM infrastructure sales, and sales into states through our retail business. That is where our focus for growth. In terms of last question which you had in terms of the various states we sell the pipes. So as generally is known, Maharashtra remains prominent and rather than going by state, I think I will go by zone. The number two zone for us beyond Maharashtra is southern zone, which is combination of four states, Karnataka, Tamil Nadu, Andhra, Telangana, and Kerala. Third zone for us is west, which is Gujarat and M.P. Then north, northeast, et cetera. So that is where, that is the breakdown.
Would you be able to quantify on which zone contributes how much to the revenues? Because to understand in terms of our competitiveness, Maharashtra, understandable that we are very high in terms of market share. I was wondering how you are able to enter into newer markets because there is a lot of competition in terms of the industry, in terms of PVC piping, especially in southern or northern regions. So I was wondering how much portion of incrementally can these other zones contribute to our revenues? One more thing in terms of the guidance on going forward, I understand Jal Jeevan Mission looks like it is uncertain, so you are considering your revenues to grow despite that. So can you tell me how much incremental growth do you expect?
In the incremental growth, how much do you think is going to be a contribution of exports, and what is going to be the contribution of the states you're giving, increasing distribution in the states itself? Were we also able to get into the commercial side? Because you wanted to expand and use case beyond agriculture sectors, agriculture industry, right? Have you been able to expand beyond that? Can you give me some light on those also?
I think primarily we still remain focused either agriculture sales or institutional sales, which are going into industry. We have not gone much into residential and commercial. In terms of the states where we are looking to grow more, because as I said, Maharashtra itself, we are quite prominent and I think we believe we are largest player. We will continue to grow more in Maharashtra. We feel Karnataka and Tamil Nadu are two other states, where we anticipate good growth, in terms of south. In terms of northern areas, two other states where we think we will have major growth would be Rajasthan and U.P. Of course, we will continue to do a little bit more in other states like M.P. And Gujarat. But larger positive impact, substantial amount increase will come from Maharashtra, Karnataka, Tamil Nadu, U.P. and Rajasthan.
While states like M.P., Rajasthan, Andhra, Telangana would also continue to add additional growth opportunity.
I am sorry to interrupt, but can you add some numbers to it? Because it seems very abstract, continue. I am so sorry. This is the same question I had before. I am sorry.
I'm unable to provide you very precise data state by state, right? For competitive reasons and other reasons. But maybe offline there can be, as an analyst, if you would like to meet our finance team, maybe some more discussions can be held. But as of now, I think this is what we can share.
Understood.
Thank you.
Can you just give the guidance somewhere on growth over the coming forward?
Can you please join back the queue, please? Thank you. We'll take our next question from the line of Deepak Poddar from Sapphire Capital. Please go ahead.
Yeah. Thank you very much, sir, for this opportunity. I have got two queries. First up, we expect a reduction in debt, right? So what is the interest cost we are looking at for this year, FY 2026, at a console level?
So at about INR 400 crore reduction. Console level, our total interest outflow along with the bank charges and all of that is about INR 350 crore. Our debt is approximately around 10% cost, a little bit less than 10%. So INR 400 crore reduction would normally mean INR 40 crore. Again, reduction is not happening on day one, right?
Correct.
Reduction happens through the year. So at least about half, approximately average half reduction. About-
INR 20 crore reduction.
INR 20 crore reduction. Some of the reduction is going to be into the zero percent NCDs also. That won't result into a direct reduction into the interest this year. There is that fair accounting valuation which will take place, and that would create some impact directly on the debt. But on interest per se, basically about INR 20 crores.
INR 20 crores. So, in a console level, we are at INR 433 crores, right? That's what we are expecting it to go to INR 420 crores reduction.
Yeah.
Okay, sure. My second question is on your outlook. Sir, I've been tracking this company for some time now. What I have seen, whatever we have been guiding, we have failed to achieve. Earlier also we were targeting some four-digit EBITDA in this year itself, which we could not achieve. Even the growth mark, I think we were targeting some INR 7,000 crores. So why do you feel, or what is different right now that the guidance that we have given, we should be able to achieve? Some light on that would be very helpful, sir.
Yeah, I think so. First two quarters last year, due to whatever the reasons which we have gone through in every investor concall, why, what happened. Going forward, we feel fairly confident based on the knowledge we have in terms of the orders being negotiated or response from our dealers, the feedback we have from direct customers, that is the farmers, the budgets we have seen from the various state governments where they have allocated to this industry X amount of funds. When you look at and combine all of that data and information, based on that, we feel our internal target is higher, right? So we have built a little bit of cushion when we say high teen.
We are targeting more, but we think even if things go wrong a little bit or state budget doesn't come through, if things like that are going to happen, we still feel comfortable for this kind of growth.
Understood. But this growth can be visible from first quarter onwards also? I mean, first quarter FY 2026, there will be-
Yeah, I think you will see a positive growth first quarter itself.
On a YoY basis?
Yeah.
Okay, fair enough. Okay. All the best. That's it from my end.
Thank you.
Thank you so much.
Thank you.
Thank you. Ladies and gentlemen, kindly restrict your questions to two at a time. You may join back the queue for follow-up questions. We will take our next question from the line of Pawan Yadav, an individual investor. Please go ahead.
Thank you very much. Just two quick questions from you. One is that 10 years back, we had this very big story of Farm Fresh valued at more than $1 billion. Back then only we were hearing a lot of stories about how big a business that is. Since then, I do understand in the meantime, we had these debt issues and all, but this has been some time, and we are not hearing anything about it. If you can throw some light in terms of how you are looking at that business. Is it looked with the same optimism that once upon a time you used to look at, or there are some differences in terms of how you look at this business? This is question number one, sir.
Question number two is, if you look at piping business, any sort of piping firm today, you have these institutional clients, your real estate sector doing pretty well. This business at a different level. Cutting across the sectors, almost all the piping companies are growing at a pretty decent pace, while our business sort of is much softer than. You gave some decent guidance, I think one and a half year, two year back, but we ultimately are still in a very softer zone than what we expected to be. Just these two questions, if you can throw some light on.
Sure. Thank you. I think those are good questions. Just in light of when the Farm Fresh business didn't exist 10 years ago. It was merely one division of Jain Irrigation then. I think in 2016 or 2017 it became a company. Of course, when it became a company, maybe the total size of business was only INR 1,000 crores. Your question is right in terms of its basic essence, that the impact, compared to what we were planning the growth for the business, what's the impact now. We think due to the debt issues or whatever, last three, four years, we have struggled with working capital and other things which had impacted the underlying business. But we have held ourselves, right, between what business we do out of India and overseas.
I think this year that business has closed close to INR 1,900 crores, a little bit less than INR 1,900 crores. At least it is there. While it has substantially not grown, it has maintained itself around this size for last few years. And EBITDA has been, let's say, around INR 200 crore± . Year after, with what we are looking at in terms of, one, increased use of our capacity for mango and onion. The second, some opportunities for contract manufacturing. We think we should be able to grow revenue much faster going forward. I think we are cautiously optimistic, in terms of you talked about over $1 billion. I think we are not there yet. But I think this year, as I said, this business this quarter grew almost 14%. For the whole year, the full business grew still 9.5%.
Okay.
I think current year, with all the changes which we are making, we are expecting this business to grow also 15%-20%. And we hope over a five-year cycle, we expect consistent growth onto this story. That's the first question. On second, on Piping, I think the companies which were involved in piping into commercial and residential sector have done well, as you were mentioning. While recently, over last one year, I think everybody has softened compared to where they were. Our business has been primarily into rural area and into agriculture, and it was connected with the Irrigation business, which went through challenging period. But standalone now, I think Piping business in rural area, we feel very confident that things will be much better.
In terms of getting into that other market, the commercial and residential, I think those efforts are still not at a big positive. But this year, I think we are expecting at least to do INR 100 crore into that segment. It is a smaller amount compared to overall size of business, but I think we have started. We are going into that region. But it will take two, three years to make big jumps to match some of the other companies which are already quite ahead in that market segment.
Just one question. Are we sort of focusing on the urban centers and the sort of commercial business as well, or that sort of is off the table for us?
No, we have started focusing on it. This year, as I said, first time we should be posting more than INR 100 crore sales. Once you establish the basic network of the distributors, et cetera, then sales can grow quite rapidly thereafter. I think this year is where we are setting up the platform, but the benefits you will see more in 2024.
Sir, just one small question.
Pawan, I request you to join back the queue, please, as we have other participants waiting for their turn.
Sure. Thanks.
Thank you. We'll take our next question from the line of Ravi Vadaga, a retail investor. Please go ahead.
Yeah. Hi. Can you guys hear me?
Yes.
Yes.
Go ahead.
Okay. First question is, what are our utilization levels? For the growth that we are anticipating, and I'm assuming next year will be better, will we need to incur any CapEx? What are our present utilization levels, and would we need to incur any CapEx? The second is, while the organic growth and all the stuff which we are doing will add free cash flows, which will also reduce debt. During our crisis time, there was serious thoughts about monetizing some non-core assets and reducing the debt at a faster level. All that, nowadays we don't even hear. Are we also looking at some of those levers in terms of non-core assets just to move the needle beyond what we will generate from our free cash flows and paying as per the debt schedule? These are my two questions.
Okay. I remember the debt question. What was your first question? I am sorry. Lost.
Yeah. The utilization levels of the present capacity.
Yeah. In terms of, I think we still have adequate capacity. We do not have to spend heavy amounts for growth either in MIS or PVC business. We need to do small amount of the investment of a specific product line, which has higher margin or which is getting sold more. But that would be within replacement of the depreciation within that amount that will fit in. We are not looking at big numbers in terms of CapEx, in that context, to looking at kind of growth which we are planning. The second part, in terms of deleveraging, and the discussion about value monetization. When was that discussion? Our total debt was close to almost INR 7,000 crores. We expect debt to be down to, this year, it is already INR 3,500 crores, maybe closer to INR 3,000 crores in FY 2026. We have come down a long way.
Most of this INR 3,000 crore debt, what you see now on the combined consult company, including Food business and everything else, is working capital debt, limited amount of long-term debt to back the inventory receivables which are there. In normal course, kind of 15% + growth every year, with further additional reduction in the receivables from legacy receivables. Next year, INR 2,600 crore, INR 400 crore reduction, 2027, another INR 400 crore reduction will happen. Meanwhile, the EBITDA should go up. I think we are going to hit sometimes 2027, 2028, approximately the debt would be not more than 2x of EBITDA. That I would consider to be very healthy level. Now, if there are additional opportunities for value monetization, where we can further bring it down better, we would pursue those.
There was this earlier one question related to whether we are listing the Food business. There is one, is that opportunity. Those we would see. We have already come down, as I said, from INR 7,000 crores, we expect this year down to about close to INR 3,000 and every year you will continue to see reduction while business will grow.
Thank you. We will take our next question from the line of Farrak Karei, an individual investor. Please go ahead.
Good evening, sir. Thank you for the opportunity. Sir, I was just going through some of the transcripts of the last conference call, and you mentioned that we expect most of the EPC projects to be done by March, and we expect the receivables, let us say, by September 2025 to be secured. I was just wondering, are we on the right track, or we may go into FY 2027 also with some receivables due because we have the NCDs due for repayment in FY 2027. I was just wondering, do we have enough cushion? Just wanted to see the repeated instance of FY 2019 what we incurred. Just to understand more on that. Can we expect all the receivables by FY 2026 or we may get into FY 2027 with some more receivables due from the state governments?
Yeah. I think the receivables are due. Some of these NCDs are due second half of, I think calendar year 2026. That is in FY 2027 and FY 2028. From this government EPC project receivables, as I said, most of projects, we have done 95%-97%, which are going to get completed. We are assuming at least close to INR 400 crores-INR 450 crores to come from these legacy receivables, which would allow us to prepay the part of the dues which are falling place in second half of the calendar year 2026. Already will be prepaid this year. Whatever the remainder receivables which will come in the next fiscal year, even the projects are getting completed now or let us say in the current year. Then we will have adequate cushion before the last part which needs to be paid.
Overall, we are actually planning to prepay this year so that we don't have any last-minute issue. We would have significant amount of cushion. And overall, our planning is that these NCDs would get kind of prepaid rather than wait till the last day.
Okay. The second question is, I remember you used to be sounding very bullish on the retail spices or the institutional spices opportunity. I know we went through the debt and we didn't have enough working capital on the Agro side. Any plans of revising all these spices opportunity? And one of the participant asked why are we not listing? We can raise some funds, which partly can go for debt reduction, partly for the future growth. Where are we on the spices overall opportunity?
Yeah. As you rightly pointed out, that we couldn't allocate adequate working capital to grow the spices business while we're more focused on stabilizing existing businesses like the onion or fruit pulp, et cetera, which we have done. And as you have seen this year, this overall Food business has grown. We are now, I think, rebuilding the spice business. Current year again, first time I think FY 2026 business should be three figures or more. And over two, three years, I think, we are expecting spice business to start contributing quite well. And any event of value monetization like listing or others, which I have answered adequately, so I do not want to repeat, would further help support that particular division. So as things happen over the next couple of quarters, we can keep you updated.
Sure. All the best, sir. Thank you for the opportunity.
Thank you.
Thank you. Ladies and gentlemen, we will take that as the last question for today. I now hand over the conference to management for closing comments. Over to you, sir.
Yeah. Thank you. I think it has been a quite productive call. So, 2025 was a challenging year, but the positives from that year is the reduction in the debt, significant generation of cash flow from operations. I think those were very big two positive. Last quarter, the higher growth in the Hi-Tech as well as Agro has been quite good. So these are big positives coming out of last year. Current year, we are very optimistic and bullish in terms of revenue growth, EBITDA growth, cash flow generation, and debt reduction. So we think we should be firing on all the four cylinders in the FY 2026. So that, not only in terms of quarter to quarter, year to year, but I think structurally, company is becoming a different company, more focused on free cash flows, reduction in working capital cycle. Because that is what will sustain us, right?
Because we think over next five years, there is substantial growth potential of the company. Mostly we want to pursue that along with the internal growth, and continue to create that room for growth. We look forward to support of all stakeholders in this endeavor, and we thank you, and we appreciate all the support everybody has been providing. Thank you again.
Thank you very much.
Thank you, ma'am.
On behalf of DR Choksey FinServ Private Limited, that concludes this conference call. Thank you for joining us and you may now disconnect your lines.