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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 inter-related 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

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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.

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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

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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.

Business of the company:

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.

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.

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

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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.

Installation:

Installation and commissioning of microirrigation 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:

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.

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

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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 buckleresistant 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

About EPC - Products

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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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

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

About EPC - Products

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Integrated Dripline:

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

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 Age Since Current Position Sanjeev Mohoni 2015 Chief Executive Officer

Ratnakar Nawghare Compliance Officer, Company Secretary Ashok Sharma 2015 Executive Director Sangeeta Prasad 2014 Additional Director S. Durgashankar 2011 Non-Executive Non-Independent Director Anand Daga 2011 Non-Executive Independent Director

Nikhilesh Panchal 47 2011 Non-Executive Independent Director Vinayak Patil 71 2003 Non-Executive Independent Director

Subhash Modak COO Mayur Bumb CFO, General Manager of Fin. and Accounts and Chief Investor Relations

Officer

Sanjeev Mohoni CEO Sunil Johnson VP of Sales and Marketing Ratnakar Nawghare

Head of Legal, Compliance Officer and Secretary

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

Risk Management Committee

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. Key Challenges to Micro-

Irrigation Industry 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.

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-irrigation business (FY 14 ROCE 6.4%). EBITDA Margins are expected to improve as it reaches the topline growth numbers as the fixed cost is spread over a larger base (FY 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.

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.

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Cash Balance

Acquisition

Operating Cash Flow New Debt New Equity

Share Repurchase Regular Dividend Special Dividend Debt Repayment Cash Balance

Capital Expenditure

Sources of Cash

Uses of Cash

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Operating Cash Flow

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Equity Paid Up

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Cash & Cash Equivalent

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Rs In

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19.89% CAGR

200% CAGR

Sales

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

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Current Liabilities

Financial Stra

tegy Framew

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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

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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.

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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.

Financial Statement Analysis

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

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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.

Financial Statement Analysis

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.

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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.

Financial Statement Analysis

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.

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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.

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.

+ Important Ratios

Valuation

PE (x) 36.79 Price to Book Value (x) 2.58 EV to Sales (x) 1.58 EV to EBITDA (x) 21.46 Dividend Yield (%) 0

Growth Position

3 Yr CAGR Sales (%) 11.8% 3 Yr CAGR Profit (%) 2.5% 1 Yr Sales Growth % 8.2% 1 Yr EBITDA Growth (%) 24.2% 1 Yr Net Profit Growth (%) 44.4%

Management Effectiveness

Return on Capital Employed (%) 7.36 Return on Equity (%) 6.37 Asset Turnover Ratio (x) 2.92 Inventory Turnover Ratio(x) 5.84 Debtor Turnover Ratio (x) 3.46

Solvency & Margins

Debt to Equity Ratio (x) 0.14 Interest Coverage(x) 4.28 Current Ratio (x) 3.14 EBITDA Margin (%) 7.35 Net Profit Margin (%) 4.41

Shareholding Pattern

Promoter Shareholding (%) 54.78 FII Shareholding (%) 1.56 DII Shareholding (%) 1.2 Public Shareholding (%) 42.46 Promoter Shg. Pledged (%) 0

Market Performance

1 Wk Price performance (%) -6.5% 1 M Price performance (%) 1% 6 M Price performance (%) 18% 1 Yr Price performance (%) -12.2% 3 Yr Price performance (%) 77%

Balance Sheet Status

Total Assets (Rs. in Cr) 159.75 Net Worth (Rs.in Cr.) 110.17 Total Debt (Rs. in Cr.) 16.34 Enterprise Value (Rs. in Cr) 275.82 Book Value Per Share (Rs.) 39.86

Income Statement Status

Sales (Rs. in Cr.) 174.72 EBITDA (Rs.in Cr.) 12.85 Net Profit (Rs. in Cr.) 7.71 Revenue / Employee (Lacs) Profit / Employee (Lacs)

+ 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