Multi Baggers

Aashish Tater

5.30 AM Jan 1st 1970

Mahindra EPC

BSE ID : 523754 NSE ID :

RECOMMENDED PRICE 145.40

PEAK FROM RECO 215.00 47.87%

CURRENT PRICE 141.90 Resource id #18

EPC is a Mahindra group company, popularly known as EPC Irrigation. And is a pioneer of micro-irrigation in India. We recommend this stock to BUY at Rs 145.40 with a target price of Rs 240.

EPC Industrie

Micro Irrigagtion: The big opportunity & a promising bet from M&M group

About the Company:

EPC is a Mahindra group company, popularly known as EPC Irrigation. And is a pioneer of micro-irrigation in India.

Mahindra and Mahindra Ltd. (M&M) has acquired majority stake in EPC through preferential issuance of equity shares. This transaction has enabled M&M to enter Micro-Irrigation Sector.

EPC provides complete solution for agriculture with a focus on Micro-Irrigation, Pumps & inter-related requirements of fertigation & agronomic support. EPC is also planning to enter other allied businesses in future.

The company is registered in all major states under subsidy program in India.EPC has a strong & widely spread network of large number of channel partners & is supported by offices at strategic locations.

EPC has also launched first of its kind one stop shop for agro products & solutions (Agri Showroom) in Buldhana district of Maharashtra, wherein farmers can find all agri input products & services under a single roof.

We recommend this stock to BUY at Rs 145.40 with a target price of Rs 240.

MICRO IRRIGATON (MI): "The big opportunity":

"The 'Pradhan Mantri Krishi Sinchayee Yojana' (PMKSY) will have an outlay of Rs 50,000 crore over a period of five years (2015-16 to 2019-20). The allocation for the current financial year is Rs 5,300 crore"

Quoting Radha Mohan Singh: Honorable Union agriculture Minister:

"The major objective of the PMKSY is to achieve convergence of investments in irrigation at the field level, expand cultivable area under assured irrigation (Har Khet ko pani), improve on-farm water use efficiency to reduce wastage of water, enhance the adoption of precision-irrigation and other water saving technologies (more crop per drop), enhance recharge of aquifers and introduce sustainable water conservation practices by exploring the feasibility of reusing treated municipal waste water for peri-urban agriculture and attract greater private investment in precision irrigation system".

The scheme also aims at bringing concerned ministries/departments/agencies/research and financial institutions engaged in creation/use/recycling/potential recycling of water, brought under a common platform, so that a comprehensive and holistic view of the entire "water cycle" is taken into account and proper water budgeting is done for all sectors namely, household, agriculture and industries.

How EPC fits the bill:

EPC a Mahindra group company is a pioneer of Micro-Irrigation in India, with state of art factory (ISO: 9001-2008 certified company) in Nasik, Maharashtra. They manufacture entire range of micro-irrigation products ranging from Online & Integrated driplines (Flat & Round Inline), Overhead Sprinkler systems, Mini-Impact Sprinklers, Piping for lift irrigation schemes in an ultra modern extrusion & injection moulding plant.

Also produce & supply PE pipes ranging from 3 to 315 mm in size with complete fittings & installation tools.

Thus offering as a one stop shop range of products that also includes Screen, Disc, Sand, Hydro cyclone filters, Fertilizer Tanks, Venturies, etc. to meet the requirement of farming community adopting High Tech Micro-Irrigation System.

Drip irrigation is the targeted, intelligent application of water, fertilizer, and chemicals directly to the plant roots. Drip irrigation improves profitability by increasing crop yield and quality while at the same time reducing costs from water, energy, labor, chemical inputs and water runoff.

Pumps Range of superior quality pumps for better quality crops & higher productivity. Sprinkler & HDPE PIPES are other areas of expertise the company is capable of providing

Future lies in EPC for Mahindra Agri business:

Media has been reporting that Mahindra will roll out its agriculture interests through EPC and it will also act as a pass through of agri-related businesses. Mahindra has a lot of proxy offering for farmer’s right from loan to Tractors and one stop solution for agriculture based on MI needs. The conglomerate baby offers the best opportunities from growth and has full potential to grow both through Organic and Inorganic means.

The company also has started focusing on reducing Govt related subsidy businesses as it targets other growth avenues. 2016 seems to be promising for EPC and thus one can take a longer term horizon on the stock.

Disclosure (SEBI Registration Number for Aashish Tater: INA300001206)

Stock Ownership - No

Stock traded in Last 30 days ( No trading or investment activities done) - No

Stock Recommended to Clients - Yes

Remuneration/Benefits received from company in 12 months - No

Merchant Banking Market Making activities / projects - No

Any arrangement with co. to affect the report write up - No

Disclaimer: Aashish Tater is an investment adviser based in Kolkata, INDIA. At the time of writing this article, he, his firm and dependent family members have no position in the stocks mentioned above. The author invites readers to send him email and welcomes comments, feedback & queries at query@fortunewizard.com. This report has been prepared solely for information purposes and the information contained herein may not be deemed to be an investment advice. Such information is impersonal and not tailored to the investment needs of any specific person. The information contained herein is not a complete analysis of every material fact representing any company, industry or security. The views expressed may change. While the information contained herein has been obtained from sources believed to be reliable, no responsibility (or liability) is accepted for the accuracy of its contents. Investors are advised to satisfy themselves before making any investments and should consult with and rely upon their own advisors whether and how to use such information in making any investment decision. Neither the author nor his firm accepts any liability arising out of use of the above information/ article.