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EPC Industrie Ltd

Crew
Sanjeet Walia
Shashank Johri
Sangeeth Elka

EPC Industrie Ltd

EPC Industrie Limited is an India-based company, which is engaged in the
manufacture of micro irrigation systems (MIS), including drip and sprinklers,
agricultural pumps, greenhouses and land scape products. The Company
provides a range of solutions to farmers, with focus on micro-irrigation and
inter-related requirements of fertigation, and agronomic support. The Company
provides solutions for agriculture, such as micro-irrigation, pumps and interrelated requirements of fertigation and agronomic support. Its products include
drip irrigation systems, sprinkler irrigation systems, pumps, pipes, and
landscape and turf irrigation systems. Its services include argonomy support
services and agri helpline for crop and farm advisory services. The Company
operates a one stop shop for agro products and solutions (Agri Showroom) in
Buldhana district of Maharashtra, which offers various agri input products and
services under a single roof. It is a subsidiary of Mahindra and Mahindra Limited

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Industry
Overview
Industry Overview:

Micro-irrigation (MIS) is essentially an irrigation technique wherein small
quantum of water (in a regulated way) is released at necessary time
periods to the most appropriate parts (roots and leaflets) of the plant.
The benefits of this technique include:
Increase in crop yield and
Reduction in labour, water & and power usage.
It is implemented through the drip & sprinkler irrigation techniques.
According to industry sources, the current micro-irrigation industry size
is approximately 4000 crore with 6 million hectares of land under MIS out
of the total net sown area of 140 million hectares and 70 million hectares
of irrigated area.
Micro irrigation system market in India has grown at the stupendous
CAGR of 27.3% during the period from FY2008-FY2013 and is projected
to grow by 31.9% over the period FY2013-FY2018 and is expected to
reach INR 205 Billion by FY2018. Although, adoption of micro irrigation
techniques by farmers is growing at a fast pace, the market penetration is
still very low. Micro irrigation system sales in India is driven by strong
demand in states such as Gujarat, Rajasthan, Madhya Pradesh
Maharashtra, Karnataka, Andhra Pradesh, Tamil Nadu, Rajasthan and
Haryana. The state governments of Gujarat, Andhra Pradesh, Tamil Nadu,
Chhattisgarh, Himachal Pradesh and Bihar have also conceived micro
irrigation projects as part of the Micro Irrigation Scheme.

The Indian micro irrigation market is majorly contributed by drip
irrigation system in terms of revenue. The drip and sprinkler irrigation
methods differ in terms of flow rate, pressure requirement, wetted area
and mobility. India has enormous potential for both the irrigation
methods. Maximum area coverage under micro irrigation has been in the
states of Maharashtra, Andhra Pradesh, Gujarat, Karnataka, and Tamil
Nadu. Maharashtra had the largest proportion of land under micro-
irrigation system with 26.7% share in FY2015. Among the crops,
maximum adoption of drip irrigation system was in fruit crops with 42%
contribution in FY 2013, followed by plantation crops, accounting for
30% share in terms of area coverage.

The government has been promoting MIS through its flagship programme
National Mission on Micro irrigation (NMMI) in the past. It has been
providing a subsidy of 50% (40% central governments share + 10% state
governments share) of the cost of MIS to farmers with a cap of
five hectares per farmer. The government, however, on the back of a
better payback period coupled with an increasing farmer base benefiting
out of it, has reduced the subsidy to 35% (25% central governments
share + 10% state governments share). The total quantum of subsidy
allocation has, however, not been reduced this fiscal year.

The domestic micro-irrigation

business (industry) can be
classified into two - project
business and non-project business.
In the project business, the state
government gets the subsidy from
the government on the farmers
behalf, which is ultimately paid to
the company installing MIS,
post verification. In the case of non-
project business, the farmer
receives the subsidy directly from
the central government and, in
turn, incurs the cost of MIS
installed in his crop field to the
company. The project business
model is followed in Gujarat and
Andhra Pradesh among others
while the non-project business is
prevalent in Maharashtra among
others.

Key products manufactured are:
1. Emitting Pipes
2. Lateral Pipes and Hoses
3. Pumping Units
4. Sprinkler heads
5. Couplers
6. Valves
7. Filters

Key Players in this industry:

1. Jain Irrigation Systems Limited
2. Netafim Limited
3. Nagarjuna Fertilizers and
Chemicals Limited
4. EPC Industries Limited
5. Finolex Plasson Industries
Private Limited

Key challenges of the micro-
irrigation industry are:
1) Disbursement of subsidies by
the state government
2) Lack of transparency, IT &
logistics at the state government
level
3) Less than optimal product
realizations

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About EPC - History
EPC Industries started in the year 1986 with
technical tieup with Kulker S.A, French company of
international reputation for manufacturing state of the
art drip & sprinkler systems. EPC Industries,
popularly known as EPC Irrigation, are pioneers of
microirrigation in India. The company is strong and
widely spread dealer?s network of more than 680
dealers and supported by 11 branch offices at
strategic locations.

Fertigation schedules as per crop needs

Any specific need from sowing to
harvesting to post harvest technology
Designing: EPC has highly qualified technical
man power trained in India and abroad to man
design department, who are located at various
locations across the country, to help the farmers to
provide them with an appropriate and the most
cost effective field designs.

Business of the company:

Installation:

EPC provides total solution for agriculture with a

focus
on
microirrigation
and
interrelated
requirements of fustigation and agronomic support.
With the initial French Technology support EPC had
developed the capability to design and develop the
irrigation products of international standard,
satisfying every need of Indian Farmers.

Installation and commissioning of micro

irrigation drip and sprinkler systems
Trained
and
experienced
team
of
technicians for installation
Installation of systems for variety of crops
under various topographical conditions
Installation of simplest to the most
sophisticated system
Products:

Services:
Survey: The company?s conduct surveys of
individual farms to collect data on crops to be
irrigated, its water and fertilizer requirements and
agronomical practices to be followed. The company
is equipped with all advanced equipment for
complete survey of farms. It provides water and soil
analysis services and accordingly advises on
fertigation.
The company is equipped with all advanced
equipment for complete survey of farms. It provides
provide water and soil analysis services and
accordingly advise on fertigation.

Drip Irrigation:
Turbulent flow path ODLPC dripper: These are
nonpressure compensating drippers are used for
variable flow requirement by operating at different
pressure range, larger / wider path enables to
make ODLPC dripper clog resistant. It can be
opened by unscrewing the cap for cleaning
manually, as and when required.

Field Services: EPC offers Agronomical and related

services to farmers through its highly qualified man
power which are as follows:

Soil testing
Water testing
Recommendation of crop suitability basing on
soil and water testing results

Discharge rates 2, 4 and 8 lph

Operating pressure 0.5 to 1.0 kg / cm2
Large / wider flow path enables it to be more
clog resistant
Ease of assembly / disassembly for manual
cleaning
Suitable for flat lands or land with little slope

About EPC - Products

Kimneer dripper: EPC kimneer dripper is an 'A'
class
dripper
manufactured
from
quality
engineering plastic material. Unique labyrinth
creates high turbulance, which makes itself
cleaning and flushing dripper. They are available in
different colours and flow rates of 2, 4, 8 and 16
lph.
The innovative design of dripper with quickseal
technique allows it to open and close very quickly
and easily creates less friction losses in the
laterals. Provision to connect spagetti or extension
tube for intercrops and fullygrown horticulture
crops.

Clog resistant unique labyrinth design

Innovative design of dripper with quickseal
technique allows it to open and close very
quickly and easily
An alternative to the present ODLPC Dripper
Openable dripper with compact but sturdy
design
Improved and quick start, one turn threading.
Ease of Assembly and Disassembly
Nominal operating pressure = 1.0 kg/cm
Variable discharge, Colour coded labyrinth
discs for 2, 4, 8 and 16 lph
Disassembly and reassembly in field should
not lead to discharge variation
EPC KIMNEER is an improved version of the
present ODLPC Dripper

Screen and Disc Filters: Screen and Disc Filters

of non corrosive UVresistant plastic body are
available in different flow rates ranging from 3050
m3 / hr. Screen filter element is made up of buckle
resistant plastic cylinder embedded with stainless
steel (Antirust steel) Screen for longer life, fine
and efficient filtration up to 150 mesh (100 microns)
particle size. Disc filter element consists of sharp
grooved discs. which can be removed from the filter
body for effective cleaning their stacked

Disc structure provides threedimensional

filtration of particles up to 120 mesh (130
microns) filters are provided with quick drain
valve for draining out impurities without opening
it and mobile pressure gauge for quick pressure
measurement. ORings for filter element
ensure perfect pressure sealing.

Available in 2', 2.5' and 3' inlet / outlet

sizes
Available in flow range of 3050 m3 / hr
Degree of filtration : 100 and 130
microns
Very easy to dismantle and clean
High filtration efficiency

Fertigation Equipments:
a) Fertilizer Tank: Fertilizer tanks are
fabricated from MS with powder coating to
protect it from corrosion and the weather.
Separate valves are provided with flexible
transparent tube on inlet and outlet to control
the injection rate and drain outlet for draining
out the remaining chemicals they are used for
application of fertilizers and chemicals along
with water through drip system.
b) Fertilizer Injector or Ventury:

Non corrosive plastic construction

Operation by pressure differential of 0.8
bar
Easy to connect, operate & adjust
injection rate
Cost effective & easy to maintain
Concentration of fertilizer / chemicals
remains constant with respect to time
Suitable for small to medium sized farm

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About EPC - Products

Integrated Dripline:

Fast installation and reduced installation

cost
Operating Range 0.5 1.0 Kg/cm2
Compact emitter design ensures ease of
recoiling in field without kinking problem
Double inlet filter and double outlet holes
ensures clog free, long life of emitters

EPC Intergrated drip lines are manufactured

in accordance with the latest advanced
technology and has got IS 13488
certification. These drip lines have been
designed after taking into consideration water
scarcity problem and suitability to various
crops grown in different parts of India. In the
integrated
drip
lines,
drippers
are
permanently welded inside the tube at
regular intervals at the time of manufacturing.
EPC intergrated drip lines available in 12 and
16 mm with flow rates of 2 and 4 lph and
dripper spacing of 30 to 150 cm. Integrated
drip lines are manufactured as per indian
standards (IS 13488) by using state of the art
technology to suit crops cultivated in india
and in different field conditions, ideal for
closespaced and row crops. Drippers are in
built and positioned inside the lateral at
preset intervals at the time of manufacturing,
as per the requirement. By using compatible
raw material compound, drippers are
permanently bonded to the lateral inner wall.
Salient Features and Advantages:

Available in various diameters (12 and 16

mm) flow rates (2 and 4 lph) dripper
spacing of 30 to 150 cm offers flexibilty and
wide choice to farmers / clients for almost
any kind of application
Excellent distribution uniformity and
manufacturing accuracy (category A)
Turbulent water labyrinth and wide water
passage ensures clog resistant emitter
Uniform aplication of water along with
nutrients to the crop
The dripers are provided with filters which
restrict the particles / impurities to enter
into them
Longer lengths with less flow variation
across the field
Low capital investment less maintenance
and longer life

Plain Laterals: EPC Online laterals are made

from 100% virgin polymers specifically
formulated for the drip laterals. These lateral
pipes are manufactured as per Indian /
International standards. Wall thickness and test
results indicate their life to be well over 10 to 15
years.

Available India of 12 mm, 16 mm, 20 mm,

25 mm and 32 mm
Designed for life more than 10 years
Protected from ultraviolet degradation to
enhance life
Made from virgin & best quality low
density & linear low density poly ethylene
(LDPE & LLDPE) resins
Colour identification for Class I & Class II
laterals
Trouble free service for perennial orchard
crops as well as for short duration
seasonal crops
Available in coils of 300 & 500 m length
Protected from UV degradation to
enhance life
Best ESCR (Environmental Stress
Creating Resistance) properties to
prevent premature cracking of laterals


Spinker Irrigations: Patented QPC Sprinkler System: 1st Patented QPC (Quick Pipe Coupling)
Sprinkler Systems in the country, are available in sizes 50, 63, 75, 90 and 110 mm in the pressure
ratings of 2.5 to 15 kg / cm2 suitable for low, medium and high pressure system.
While using EPC QPC system for joints, it ensures leakproof operation and facilitates speedy
jointing without using tools. The unique locking system ensures trouble free operation and restricts
accidental opening of coupler lock due to surge pressure during initial priming. EPC QPC systems are
socket fusion welded to withstand high pressure operation and have longer life.
Patented QPC Sprinkler System: QPC (Quick Pipe Coupling) Sprinkler Systems are available in
sizes 50, 63, 75, 90 and 110 mm in the pressure ratings of 2.5 to 15 kg / cm2 suitable for low,
medium and high pressure system.
In 2011 Mahindra & Mahindra invests into EPC Industries.
In 2012 EPC a Mahindra Group Company launched first of it's kind 'One stop Agri Products &
Solutions' shop.

Financial Analysis of EPC

With peers

STOCK PERFORMANCE

The stock has outperformed CNX Commodities and S&P BSE Small Cap for the
past 5 years. Its comparison to its peers has also been second to only Rungta
Irrigation. However 5 and 3 year gains suggest a story of an efficient stock.

Shareholding & Topline

Management
Name
Sanjeev Mohoni
Ratnakar Nawghare
Ashok Sharma
Sangeeta Prasad
S. Durgashankar
Anand Daga
Nikhilesh Panchal
Vinayak Patil

Age Since

2015



2015

2014

2011

2011
47 2011
71 2003

Current Position
Chief Executive Officer
Compliance Officer, Company Secretary
Executive Director
Additional Director
Non-Executive Non-Independent Director
Non-Executive Independent Director
Non-Executive Independent Director
Non-Executive Independent Director

COO

Subhash Modak
Mayur Bumb

CFO, General Manager of Fin. and Accounts and Chief Investor Relations
Officer
CEO

Sanjeev Mohoni
Sunil Johnson

VP of Sales and Marketing

Ratnakar
Nawghare
Ashok Sharma

Head of Legal, Compliance Officer and Secretary

Executive Director, Chairman of Corporate Social Responsibility (CSR)
Committee, Member of Stakeholders Relationship Committee and Member of
Risk Management Committee

Q1 What is its financial strategy and does it support its business

strategy?
The business strategy talks about aggressive expansion into states, opening up of more sammridhi centers. This
requires more working capital, and capex requirements. The current cash cycle is not able to generate hence
management is targeting for a better WC days. However we feel that the current financial strategy as can be seen from
the next page is not effective. This company is owned by M&M and hence can help the company is aggressive financial
endeavor. We have seen the sales have increased and so have the profit margins. Operating cash flow has seen a
slowdown but that is due to initial stages of its non project sites which are not able to contribute to the cash cycle at
regular intervals. The company is creating more assets with increase in the sales. This will help them to generate long
term profits in the neat by future. The company should still re-visit the sources and uses of funds especially when its
not paying dividends. A detailed analysis of the financials and business strategy follows.

Micro irrigation is the way

forward for Indian
Agriculture
1. Beneficial technique for
irrigation where a small
quantum of water is
released in vital parts of
the crop at essential
intervals.
2. Benefits include increase
in crop yield, reduction in
labor, water & power
usage.
3. Current size of the industry
is Rs 4000 crores
4. Main Players : Jain
Irrigation, Netafim India, &
EPC Industrie.

Companys Growth Plan

1. The management believes that the working capital
management is the key to maintaining healthy equitable
growth.
2. Receivable Days = 130 days,
3. Inventory Days = 30 days
4. Net working capital days = 120 days
5. It has 12 sammridhi centers which are equipped with soil
testing equipment and agri professionals. The stores are
owned by M&M, while EPC acts as a dealer.
6. Heavy demand post harvest seasons and typically
performs well around March, April, May, October,
November.
7. The company is targeting a ROCE of 20% from its micro-

Key Challenges to Micro-

Irrigation Industry

irrigation business (FY 14 ROCE 6.4%). EBITDA Margins

1. Disbursement of subsidy
by the state government.
2. Lack if transperancy, IT &
Logistics at the state
government level.
3. Less than optimal product
realisations.

numbers as the fixed cost is spread over a larger base (FY

are expected to improve as it reaches the topline growth

14 margins 6%).
8. The company has more focus on Maharashtra and Gujarat
due to timely and more rapid payments.
9. In terms of new states company is willing to set stage in
Tamil Nadu, Karnataka & Bihar.

Cash
Balance

Operating
Cash Flow

Capital
Expenditure

Acquisition

Cash
Balance

Debt
Repayment

-10
-15
Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar
14 13 12 11 10 09 08 07 06 05

-20

Adj Net Progit

200

Jan-14

Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar
14 13 12 11 10 09 08 07 06 05

Jan-13

-5

Jan-12

Jan-11

30
25
20
15
10
5
0

Jan-06

40
35
30
25
20
15
10
5
0

Jan-10

Equity Paid Up

Operating Cash Flow

Jan-09

Special
Dividend

Jan-08

Cash & Cash Equivalent

Uses of Cash

Jan-07

Regular
Dividend

Share
Repurchase

10

Sources
of Cash

New
Equity

New Debt

Jan-05

Financial Strategy
Framework

Sales

8
6
Rs In Crores

4
2
0
-2 Mar 14 Mar 13 Mar 12 Mar 11 Mar 10 Mar 09 Mar 08 Mar 07 Mar 06 Mar 05
(12) (12) (12) (12) (12) (12) (12) (12) (12) (12)
-4

150

19.89%
CAGR

-6
-8
-10

100

Current Liabilities

Rs In Crores

-12

Adj Net Progit

Sales
50

35

200%
CAGR

30
25
20

0
Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar
14 13 12 11 10 09 08 07 06 05
(12) (12) (12) (12) (12) (12) (12) (12) (12) (12)

15
10
5
-50

0
Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14

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The product profile of the company, they are

into micro irrigation making the sprinklers, drip
irrigation, pipes and all that. So one can broadly
compare this company with Jain Irrigation and
since as of today the M&M have their presence
more into the automobiles and auto ancillary
and they are catering directly into the
agricultural space by their tractor and they want
to move into this line, which is likely to be a
very positive for the company." "If we go by the
preferential allotment having made by the
company to the M&M group on the enhanced
equity of about 17 crore M&M will be having a
stake of 38%, 32% will be held by the Schroder
Credit who have been invested into the
company since long and 16% by the original
promoter.

The company has accumulated 7.41 M in total

debt with debt to equity ratio (D/E) of 0.01
which may suggest the company is not taking
enough advantage from borrowing. EPC
Industrie Ltd has Current Ratio of 3.16
suggesting that it is liquid and has the ability to
pay its financial obligations in time and when
they become due

The company has Profit Margin (PM) of 1.06

% which maeans that even a very small decline
in it revenue will erase profits resulting in a net
loss. This is way below average. Similarly, it
shows Operating Margin (OM) of 0.88 %
which suggests for every 100 dollars of sales it
generated a net operating income of 0.01
The firm has return on total asset (ROA) of
0.59 % which means that it generated profit of
$0.59 on every $100 spent on asset. This is
way below average. Similarly, it shows return
on equity (ROE) of 1.58 % meaning that it
generated $1.58 on every $100 dollars invested
by stockholders.
The organization owns Beta (Systematic Risk)
of 0.077 which denotes to the fact that as
returns on market increase, EPC Industri
returns are expected to increase less than the
market. However during bear market, the loss
on holding EPC Industri will be expected to be
smaller as well.

Financial Statement Analysis

EPC Industrie Ltd has Return On Equity of 1.58%. This is 118.74% lower than that of the Industrial Goods sector,
and 50.31% lower than that of Return On Equity industry, The Return On Equity for all stocks is 114.64% lower
than the firm.
ROE shows how efficiently a company utilizes investments to generate income.
Return on Asset measures overall efficiency of a company in generating profits from its total assets. It is expressed
as the percentage of profits earned per dollar of Asset. A low ROA typically means that a company is asset-intensive
and therefore will needs more money to continue generating revenue in the future. Based on latest financial
disclosure EPC Industrie Ltd has Return On Asset of 0.59%. This is 108.27% lower than that of the Industrial
Goods sector, and 24.36% lower than that of Return On Asset industry, The Return On Asset for all stocks is
104.78% lower than EPC Industrie Ltd.

Price to Earnings ratio is typically used for current valuation of a company and is one of the most popular ratios
that investor monitor on a daily basis. Holding a low PE stock is less risky because. When a company's profitability
fall, it is likely that earnings will also go down..In other words, if you start from a lower position your downside risk
is limited. There are also some investors who believe that low Price to Earnings ratio reflects the low pricing because
a given company is in trouble. On the other hand, a higher PE ratio means that investors are paying more for each
unit of profit.
Based on latest financial disclosure the price to earning indicator of EPC Industrie Ltd is roughly 274 times. This is
583.97% higher than that of the Industrial Goods sector, and 331.58% higher than that of Price to Earning industry,
The Price to Earning for all stocks is 692.92% lower than the company.

A good Operating Margin is

required for a company to be able
to pay for its fixed costs or pay
out its debt which implies that the
higher the margin, the better. This
ratio is most effective in
evaluating the earning potential of
a company over time when
comparing it against firm's
competitors. Based on recorded
statements EPC Industrie Ltd has
Operating Margin of 0.88%. This
is 110.93% lower than that of the
Industrial Goods sector, and
107.19% lower than that of
Operating Margin industry, The
Operating Margin for all stocks is
108.54% lower than EPC Industri

Outstanding shares that are

stated on company Balance Sheet
are used when calculating many
important
valuation
and
performance indicators including
Return on Equity, Market Cap,
EPS and many others. Based on
latest financial disclosure EPC
Industrie Ltd has 27.64 M of
shares currently outstending. This
is 91.49% lower than that of the
Industrial Goods sector, and
90.83% lower than that of Shares
Outstanding industry, The Shares
Outstanding for all stocks is
93.44% higher than EPC Industrie
Ltd.

Price to Book (P/B) ratio is used

to relate a company book value to
its current market price. A high
P/B ratio indicates that investors
expect executives to generate
more returns on their investments
from a given set of assets. Book
value is accounting value of assets
minus liabilities.
low Price to Book ratio generally
implies that the firm is
undervalued, it is often a good
indicator that the company may
be in financial or managerial
distress
and
should
be
investigated
more
carefully.
Based on
latest financial
disclosure
the price to book
indicator of EPC Industrie Ltd is

Financial Statement Analysis

Price to Sales ratio is typically used for valuing equity relative to its own past performance as well as to
performance of other companies or market indexes.
In most cases, the lower the ratio the better it is for investors. The most important factor to remember is that the price
of equity takes a firm's debt into account, whereas the sales does not consider financial leverage. Generally speaking,
Price to Sales ratio shows how much market values every dollar of the company's sales. Based on latest financial
disclosure the price to sales indicator of EPC Industrie Ltd is roughly 2.85 times. This is 70.4% lower than that of
the Industrial Goods sector, and 4.36% lower than that of Price to Sales industry, The Price to Sales for all stocks is
77.72% higher than the firm.
Revenue is income that a firm generates from business activities such us rendering services or selling goods to
customers. Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can
includes product or services discounts, promotions, as well as early payments on invoices or services rendered in
advance. Based on latest financial disclosure EPC Industrie Ltd reported 1.69 B of revenue. This is 71.57% lower
than that of the Industrial Goods sector, and 86.73% lower than that of Revenue industry, The Revenue for all stocks
is 89.06% higher than EPC Industri.
Gross Profit is the most basic measure of business operational efficiency. It is simply the difference between sales
revenue and the cost associated with making a product or providing a service. It is calculated before deducting
administrative expenses, taxes, and interest payments.
Gross Profit varies significantly from one sector to another and tells investor how much money a business would
have made if it didn't have to pay any overhead expenses such as salary, taxes, or rent. According to company
disclosure EPC Industrie Ltd reported 553 M of gross profit. This is 77.63% lower than that of the Industrial Goods
sector, and 78.96% lower than that of Gross Profit industry, The Gross Profit for all stocks is 96.12% higher than the
company.
EBITDA stands for earnings
before
interest,
taxes,
depreciation, and amortization. It
is a measure of a company
operating cash flow based on data
from the company income
statement and is a very good way
to compare companies within
industries or across different
sectors.
According to company disclosure
EPC Industrie Ltd reported
earnings
before
interest,tax,
depreciation and amortization of
40.59 M. This is 95.0% lower
than that of the Industrial Goods
sector, and 97.62% lower than
that of EBITDA industry, The
EBITDA for all stocks is 97.66%

Net income is the profit of a

company for the reporting period
which is derived after taking
revenues
and gains and
subtracting all expenses and
losses. Net income is one of the
most watched numbers by money
managers as well as individual
investors.
EPC Industrie Ltd reported net
income of 17.95 M. This is 92.0%
lower than that of the Industrial
Goods sector, and 97.35% lower
than that of Net Income industry,
The Net Income for all stocks is
97.71% higher than the firm.

Cash or Cash Equivalents are

the most liquid of all assets found
on company's balance sheet. It is
used in calculating many of the
firm's liquidity ratios and is a
good indicator of overall financial
health of a company.
EPC Industrie Ltd has 269.95 M
in Cash and Equivalents. This is
64.9% lower than that of the
Industrial Goods sector, and
80.74% lower than that of Cash
and Equivalents industry, The
Cash and Equivalents for all
stocks is 93.89% higher than EPC
Industri.

Financial Statement Analysis

Total Debt refers to the amount of long term interest-bearing liabilities that a company carries on its balance sheet.
That may include bonds sold to public, notes written to banks or capital leases.
It is usually meaningful to compare total debt amounts between companies that operate within the same sector.
Based on latest financial disclosure EPC Industrie Ltd has Total Debt of 7.41 M. This is 99.83% lower than that of
the Industrial Goods sector, and 99.92% lower than that of Total Debt industry, The Total Debt for all stocks is
99.92% higher than EPC Industri.
Operating Cash Flow reveals the quality of a company's reported earnings and is calculated by deducting
company's income taxes from earnings before interest, taxes and depreciation (EBITDA). In accordance with
recently published financial statements EPC Industrie Ltd has 193.22 M in Cash Flow from Operations. This is
63.44% lower than that of the Industrial Goods sector, and 87.4% lower than that of Cash Flow from Operations
industry, The Cash Flow from Operations for all stocks is 82.61% higher than EPC
Earnings per Share (EPS) denotes the portion of a company's earnings that is allocated to each share of common
stock.
Earnings Per Share of 0.65 times. This is 34.34% lower than that of the Industrial Goods sector, and 90.66% lower
than that of Earnings Per Share industry, The Earnings Per Share for all stocks is 57.24% higher than the firm.

Z-Score is a simple linear, multi- factor model

that measures the financial health and economic
stability of a company. The score is used to
predict probability of a firm going into
bankruptcy within next 24 months or two fiscal
years from the day stated on the accounting
statements used to calculate it.
EPC Industrie Ltd has Z Score of 398. This is
95.98% higher than that of the Industrial Goods
sector, and 1676.39% higher than that of Z Score
industry, The Z Score for all stocks is 20.59%
higher than the firm.

Working Capital is measure of company efficiency

and operating liquidity. The working capital is
usually calculated by subtracting Current Liabilities
from Current Assets.
In general terms, companies that have a lot of
working capital will experience more growth in the
near future since they can expand and improve their
operations using existing resources. On the other
hand, companies with small or negative working
capital may lack the funds necessary for growth or
future operation. Working Capital also shows if the
company has sufficient liquid resources to satisfy
short-term liabilities and operational expenses. EPC
Industrie Ltd has Working Capital of 796 M. This is
12.39% lower than that of the Industrial Goods
sector, and 71.76% lower than that of Working
Capital industry, The Working Capital for all stocks
is 76.04% higher than EPC Industri.

+ P/E of 275 on trailing 12 months earnings indicates that market

expects earnings to zoom in the current financial year. Do you
agree or disagree? Defend your answer.

Price to Earnings ratio is typically used for current valuation of a company and is one of the most popular ratios that
investor monitor on a daily basis. Holding a low PE stock is less risky because. When a company's profitability fall,
it is likely that earnings will also go down. In other words, if you start from a lower position your downside risk is
limited. There are also some investors who believe that low Price to Earnings ratio reflects the low pricing because a
given company is in trouble. On the other hand, a higher PE ratio means that investors are paying more for each unit
of profit.

Based on latest financial disclosure the price to earning indicator of EPC Industrie Ltd is roughly 274 times. This is
583.97% higher than that of the Industrial Goods sector, and 331.58% higher than that of Price to Earning industry,
The Price to Earning for all stocks is 692.92% lower than the company.

The Market expects the earnings to zoom in as exhibited by the high P/E ratio. This is primarily because it has been
one of the better performing stocks giving a return of 175% in 5 years time horizon. More so the company falls
under the umbrella of Mahindra & Mahindra, creates a brand equity for the company. The Non project business
side of the company is directly subsidized and funded by the government through proper channels which creates a
euphoria around the industry. The opportunity to expansion in different states and the possible increase in
penetration in the markets provides a future growth number to the sales along with better profitability. There is
certainly euphoria around the brand, and the management has said it in their meetings to improve their EBITDA
margins and ROCE numbers. The management also have said it that the company is expected to reach strong
topline growth in the years to come. They also maintained their position about improved working capital and quick
recovery of money in times to come.
The market expects the earnings to zoom and it is likely to happen so.

Important Ratios

Valuation
PE (x)
Price to Book Value (x)
EV to Sales (x)
EV to EBITDA (x)
Dividend Yield (%)

Growth Position
36.79
2.58
1.58
21.46
0

0.14
4.28
3.14
7.35
4.41

Shareholding Pattern
Promoter Shareholding (%)
FII Shareholding (%)
DII Shareholding (%)
Public Shareholding (%)
Promoter Shg. Pledged (%)

Return on Capital Employed (%)

Return on Equity (%)
Asset Turnover Ratio (x)
Inventory Turnover Ratio(x)
Debtor Turnover Ratio (x)

7.36
6.37
2.92
5.84
3.46

Market Performance
54.78
1.56
1.2
42.46
0

Balance Sheet Status

Total Assets (Rs. in Cr)
Net Worth (Rs.in Cr.)
Total Debt (Rs. in Cr.)
Enterprise Value (Rs. in Cr)
Book Value Per Share (Rs.)

11.8%
2.5%
8.2%
24.2%
44.4%

Management Effectiveness

Solvency & Margins

Debt to Equity Ratio (x)
Interest Coverage(x)
Current Ratio (x)
EBITDA Margin (%)
Net Profit Margin (%)

3 Yr CAGR Sales (%)

3 Yr CAGR Profit (%)
1 Yr Sales Growth %
1 Yr EBITDA Growth (%)
1 Yr Net Profit Growth (%)

1 Wk Price performance (%)

1 M Price performance (%)
6 M Price performance (%)
1 Yr Price performance (%)
3 Yr Price performance (%)

-6.5%
1%
18%
-12.2%
77%

Income Statement Status

159.75
110.17
16.34
275.82
39.86

Sales (Rs. in Cr.)

EBITDA (Rs.in Cr.)
Net Profit (Rs. in Cr.)
Revenue / Employee (Lacs)
Profit / Employee (Lacs)

174.72
12.85
7.71

+
Appendix BS 15

[Street Address]
[City], [State][Postal Code]
[Web Address]

+
Appendix PnL FY
2015

[Street Address]
[City], [State][Postal Code]
[Web Address]

+ Appendix Cash
Flow FY 2015

[Street Address]
[City], [State][Postal Code]
[Web Address]

+ Appendix Cash
Flow FY 2015

[Street Address]
[City], [State][Postal Code]
[Web Address]

+ BIBLIOGRAPHY

http://economictimes.indiatimes.com/epc-industrie-ltd/stocks/companyid-
11065.cms
http://www.epcmahindra.com/sprinklerirrigation.aspx
http://www.moneycontrol.com/news_html_files/news_attachment/2014/IDir
ect_EPCInds_260814.pdf
http://www.macroaxis.com//reports/27.4.227.187/entityReport1.4379156835
074548E15.pdf
Capitalline