CNBC-TV18 honoured the best of leaders from various fields in its ninth edition of India Business Leaders Awards (IBLA). Jain Irrigation won the India Corporate Social Responsibility (CSR) Award at the India Business Leaders Awards (IBLA). Seven percent of the company's profit is spent on CSR activities. "Development via increase in productivity is the key focus for CSR," Jain said.
It is also hopeful of clocking more than 25 percent growth in its standalone operations for FY14. He is also upbeat on export revenue growth and expects it be around Rs 1,000-1,100 crore for FY14.
Meanwhile, he said its total foreign exchange loan stands at USD 220 million, out of which around USD 100-110 million is unhedged. Further, he expects receivables to decline from the current 270 days to three months over the next few quarters.
Also watch: The other winners of IBLA
Below is the verbatim transcript of his interview on CNBC-TV18
Q: Give us a brief description of how this money is spent?
A: To give a brief background, we instituted this process in 2005 that's almost eight years ago and at that time it started with 3 percent of profit and in 2008, we increased that to about 5 percent. So it has been there for this long period.
The funds we are spending have been on multiple different usages. One has been to support the education in rural area because our heart and soul is in rural area. We deal with the farmers, we deal with rural India. We are focused on productivity and farms so that is where we also spend money. We also spend part of the fund taking Gandhiji's thoughts to rural area – on how villages can become self reliant, productive so that they do not have to depend a lot on subsidies by the government. So there has to be silent revolution, which is led by productivity and income increase with small farmers.
We are also spending time, effort and money on actually transferring knowledge to millions of farmers and making them aware of what they can do. They have the same amount of land and same labour, which they had before but these guys now are producing three-four times more and they are making Rs 1-2 lakh per acres, whereas earlier they would make Rs 5,000-10,000-20,000 per acre.
Therefore, our effort has been overall within the rural community and on education as well as thought process but development productivity has been the focus of all our effort and of course we do focus on infrastructure creation within rural area. A combination of these things is our activity that has been around.
Q: You have been winning good company award for many years now but getting back to business, how is business shaping up at this point because the last time we spoke with you, you had indicated that margins have come off in the last couple of quarters because of polymer prices and MIS business etc. How is capacity utilisation at this point in time and going ahead when do you expect recovery in margins to 18-19 percent mark?
A: You would see improvement in third quarter but Q4 onwards you will see definite improvement in margin but considering the overall environment, which one has seen, we had almost more than 23-24 percent revenue growth in first six months. We have maintained that kind of run rate in the third quarter and we expect fourth quarter to be even stronger.
Jain Irrigation stock price
On January 16, 2014, Jain Irrigation Systems closed at Rs 69.00, down Rs 1.6, or 2.27 percent. The 52-week high of the share was Rs 83.90 and the 52-week low was Rs 46.10.
The latest book value of the company is Rs 51.01 per share. At current value, the price-to-book value of the company was 1.35.
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