P/L growth is largely missing due to company specific as well as industry specific headwinds in the past. Its net sales have hovered in the range of ~| 160-200 crore in a six-year time frame i.e. FY13-18. A large part of it was owing to inefficient subsidy release mechanisms or switching over to new subsidy mechanisms in key states, thereby resulting in high uncertainty and unpredictability. Even on the margin front, the performance has been sub-par with EBITDA margins in the range of ~56% thereby resulting in dismal profitability at the PAT level. PAT in FY1318 has been in the range of ~| 5-10 crore. Therefore, given election in key states as well as Centre and tracking EPC's performance, there is...

ICICI Securities Ltd | Retail Equity Research EPC Industrie (EPC) reported a robust Q4FY18 performance Net sales for the quarter came in at | 76.3 crore, up 37.7% YoY. EBITDA in Q4FY18 was at | 8.7 crore with corresponding EBITDA margins at 11.5%, up 250 bps YoY. PAT in Q4FY18 was at | 4.5 crore vs. | 3.3 crore in the base quarter (Q4FY18) For full year FY18, EPC clocked sales at | 204.6 crore, EBITDA at | 12.2 crore (EBITDA margins at 6.0%) and PAT at | 4.9 crore. FY18...

Valuation: On the valuation front, at CMP Rs. 192.7, the company is trading at a TTM P/E multiple of 83.5x as compared to the peer average of 49.6x, whereas the TTM EV/EBITDA multiple is 73.9x as compared to the peer average of 37.0x. After considering all these factors and high probability of strong growth in the future we...

ICICI Securities Ltd | Retail Equity Research EPC Industrie (EPC) in a latest press release has disclosed registration as a recognised micro-irrigation player in the state of Maharashtra for a period of 5 years (up to Sep 2022). The said order supersedes the ban imposed on the company dated July 2016 and now makes it eligible to participate in the state government administered micro irrigation subsidy scheme. EPC has also indicated a loss of sales for the company as well as industry in the month of July 2017 due to transition towards GST and pending...

ICICI Securities Ltd | Retail Equity Research We attended the AGM of EPC Industrie (EPC) at Nashik on July 28, 2017 and met the senior management to improve our understanding on the company and domestic micro irrigation industry (MIS), in general. We were impressed by the management's vision to catapult EPC into the top three MIS player by 2020 amid robust domestic opportunity (penetration at ~8 million hectares vs. medium term potential of ~17 million hectares). The performance of EPC in FY17 was muted primarily on account of deregistration in its key state of Maharashtra, which would have otherwise...

EPC Industrie Ltd., (EPC) reported subdued 4QFY17 result. The revenue stood at Rs 556mn with a growth of -2.2%/9% YoY/QoQ, respectively. EBITDA stood at Rs 50mn a YoY / QoQ growth of -0.3% /44.5%, respectively. The company posted Adj. PAT of Rs.33mn, degrowth of ~17% YoY on account of higher depreciation (YoY growth of...

EPC Industrie (EPC) is a micro-irrigation system (MIS) player manufacturing drip and sprinkler irrigation system domestically EPC has a promoter pedigree of the M&M; group, which is a leading farm equipment player with a good brand recall Of the total MIS industry size of ~| 4000 crore, EPC realises sales of ~| 200 crore, thereby commanding a market share of ~5% FY14-17 has been largely muted for EPC given distress in the rural economy amid deficient monsoons in 2014 & 2015 and change in...

As per the management, the potential MIS in India is estimated to be ~69mn hectares with the current penetration level of ~7.7%. EPC holds 4th position in this industry where it aims to be among top 3 players in next 2-3 years. MIS is majorly a subsidy driven business where schemes like PMKSY (Pradhan Mantri Krishi Sinchayni Yojana; where the Govt. will be spending Rs 500bn over 5 years) plays an important...