Monday, August 16, 2010
Even if the potential of Micro Irrigation is very vast in a
, listed Companies other than 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
based company having an installed 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,
based PE player Schroder 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
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 /-