This monsoon stock opened 11% gap up in today's trade

Jain Irrigation reported strong Q4 results After yesterday’s strong market session, the market opened red today.

S&P BSE Sensex opened at 55622, as against yesterday’s close of 55925.74. Currently, at 11.08 am, S&P BSE Sensex is trading at 55829, 0.17 per cent down for the day. Despite the negative market, Jain Irrigation Ltd opened more than 11 per cent gap up at Rs 42. However, negative market sentiment grappled Jain Irrigation to make the stock’s opening price also the high price of the day, forcing the stock to come down continuous since the start of the trading session. At 11.08 am, the stock is trading at Rs 40.6. Strong gap up move by the stock was observed due to stellar Q4 results and positive news regarding monsoon arrival broadcasted by India Meteorological Department (IMD).

Jain Irrigation reported Q4 consolidated revenue at Rs 2,084.88 crore, a 16.2% growth from the previous year’s number of Rs 1794 crore. The net profit for Q4 stood at Rs 278 crore, a staggering 467% increase from its Q4 FY21 figure. The operating margin for Q4 was maintained at 8% and for the entire FY22 it was at 10%. A significant reduction in working capital days was observed in FY22 which was reported at 54 days, as against 3- year average of 215 days.

The company has a ROCE of 4% for the FY22 period ending. The company has a high debt-to-equity ratio of 2.44. The promoters have pledged 55.37% of their holdings. The stock is trading below its book value with PB ratio at 0.58x and has made a 52-week high and low at Rs 53.5 and Rs 20.65, respectively.

Jain Irrigation Systems Limited is engaged in providing solutions in agriculture, piping and infrastructure through the manufacturing of Micro Irrigation Systems, PVC Pipes, HDPE Pipes, Plastic Sheets, Agro Processed Products, Renewable Energy Solutions, Tissue Culture Plants, Financial Services and other agricultural inputs.