Even if the potential of Micro Irrigation is very vast in a
country like India
Jain Irrigation in this sector is ignored by investors mainly
because of their inability to scale up the business.
EPC INDUSTRIE is the second largest pure listed player
in this space. This Nasik
capacity of 8100 Mt per annum Micro Irrigation Systems.
Company was in pathetic situation and a BIFR case for
past many years mainly because of severe working capital.
crunch . Later in 2007, UK
Credit Renaissance Fund interested in EPC and invested
about Rs.18 crore to revive the company .
The same fund again invested
in EPC and raised its stake upto the current level of 52.3 %.
In these preferential allotments , Schroder Credit took stake
at a price higher than the then prevailing market price of EPC ,
which indicates their confidence in this company. Meanwhile
promoters also hiked their stake through a preferential allotment.
Even there is fund infusion , turnover of the company was not
improving earlier. But now there is some earlier signs of
improvement in this company. By effective use of working
capital , company is now started to improve capacity utilization
and margins . For the three months ended June qtr, Company
posted a turnover of Rs.23 Crore and a net profit of Rs.81 Lac
which is higher than 50% and 300% respectively over same
period last year. EPC is an approved supplier to the Micro
irrigation projects initiated by Gujarat and Andhra Pradesh
products. Along with this ,due to high food inflation many state
governments and Central government taking active steps to
increase the penetration of MIS in our country .As part of this,
recently central government upgraded its micro irrigation scheme
to a national mission with an outlay of Rs 8032.90 crore ,which
is very positive for companies like EPC. When we look through
another angle , seeing the potential here ,many world leaders are
interested to enter into the Indian MIS market .Since ,controlling
stake held by a P/E player with world wide operation ,EPC
Industries is a potential take over target for these biggies going
forward. So, those who are willing to take risk and ready to
wait, this may turn as a multibagger .CMP is Rs.61 /-
Hi Value Pick,
ReplyDeleteHow did you find out that "Schroders" had funded the company out of debt.
I did not find it in 2007 annual report.
Dear B.H
ReplyDeletesorry for the mistake due to oversight ,fund used for working capital.
Thanks
V
That is OK. My question is where can I find more info about "Schroders" in which annual report.
ReplyDeleteOr where did you find this piece of info.
If you don't mind telling.
The long term debt/eqity ratio still seems ways too high.
ReplyDeleteDear BH
ReplyDeleteThe said amount invested through Schroder
Credit Renaissance Fund a sub account of SCHRODER INVESTMENT MANAGEMENT NORTH AMERICA LIMITED which is promoted by Schroder Credit.Details of allotment can be obtained from following links:
1)
http://www.bseindia.com/qresann/newsh.asp?newsid={37A90C81-59B7-49AF-B58E-019BC56F8126}¶m1=1
2)
http://www.bseindia.com/shareholding/shpperent.asp?scripcd=523754&qtrid=66&CompName=EPC%20INDUSTRIE%20LTD.&QtrName=June%202010
Thanks Value for the call on Transpek Ind
ReplyDeleteVlue
ReplyDeleteany idea why sudal industries is up 25 percent?
also pls cover ankur drugs and klgsystel both of which seem ok in terms of corporate goverernence but have fallen steeply
ReplyDeleteEPC trading at 6 times book. Is it justified.
ReplyDeleteDear Valuepickji
ReplyDeleteI have become a big fan of punj lloyd after reading all the history and future projects.
Do you think it will start making profit in a quarter or 2?
or do you see more pain for the share holders?
Please advice.
Thanks
Nish
Dear Nish
ReplyDeleteI think the management of Punj Lloyd is really cheating the retail Investors.They are announcing big orders and plans and just before the declaration of result they will find a reason to justify the huge loss .This is happening many times in the past ,really unfortunate ...
Hi
ReplyDeleteCompany has now launched its new website www.epcind.com.Seems to be good company to hold,sincere efforts from management to revive the company is going on with the help of foreign investor,may be the successor of jain Irrigation in future.
By
Abhiram Selvam (T.N)
Thanks Abhiram for that info on website.
ReplyDeleteCompany has announced the launch of website today evening to BSE,something really happening in it towards positive direction
ReplyDeleterungtairrigation is also in this space and covered by you as well. better one please
ReplyDeleteGr8 prescience sir.
ReplyDeleteMahindra and Mahindra is buying a 38% stake in EPC for 269 million rupees and making an open offer on April 6,2011 for an additional 20% stake at Rs 66/share.