STOCK REVIEW- MAHINDRA EPC

BRIEF:  Mahindra EPC provides a range of solutions to farmers, with a focus on micro-irrigation and inter-related requirements of fertigation, and agronomic support.

Mahindra and Mahindra Ltd. (m&m) has acquired a majority stake in Mahindra EPC irrigation limited through the preferential issue of equity shares. This transaction has enabled m&m to enter the micro-irrigation sector.

Company majorly manufacturer of drip & sprinkler irrigation & piping systems with an annual processing capacity of more than 17000 tons of pe. The company’s state-of-the-art factory is located in Nashik Maharashtra.

COMPANY’S PRODUCT OFFERINGS:

• Drip Irrigation System
• Sprinkler Irrigation System
• Pumps Pipes
• Landscape& Turf Irrigation
• Hydro Cyclone Filters
• Fertilizer Tanks

COMPANY’S PROFILE:

FINANCIAL Q-Q                                                                                              (₹ IN CRORES)

SHAREHOLDING PATTERN Q-Q

The company during a con call on 5^th May’22 raised certain concerns regarding the micro-irrigation.

• Company is concerned about the way India is heading as a water-stressed economy, though this challenge is taken positively for micro-irrigation industry overall 70 million hectares is available for irrigation.
• Company is in the process of taking a call on moving ahead with the non-subsidy businesses so that there is less dependence on subsidies and a major thrust is given to reduce the cost.
• Company is very focused on increasing the market share and also shifted from low margin products to high margin drip products.
• Company raised concerns about the DE growth happening in last two years because of less allocation of fund from govt, govt more focused on the health sector as the urgent need in public health because of covid.
• Increase in the raw material cost has severely impacted the books of the company.
• Company shared two positive developments first Telangana state govt allocated a fund of ₹500 crores towards irrigation.
• Second Maharashtra, Gujarat, and Tamil Nadu state govt in commitment to the Indian agriculture irrigation vision have offered adequate funds for this year.
• Company is positive about ramping up the production in Vadodara, Nashik, and Coimbatore and will take full advantage of the easy availability of the supply chain.
• Company also talked about Israel as the nation of struggled with the significant water shortages to emerge as the world leader in water management, country’s commitment to innovative, storage structure, farmer-friendly maintenance, and management system. The company is keenly following the same process to achieve great results.
• Company has given the guidance as neutral for the coming year, the company mainly focused in Capex, for coming quarters and also to shift from low margin products to high margin products, company is also looking forward to entering the Telangana state after the state govt announced the project.

TECHNICAL NOTES:  MAHINDRA EPC

• LONG-TERM TREND: SIDEWAYS
• INTERMEDIATE-TERM TREND: DOWNTREND
• SHORT-TERM TREND: DOWNTREND

• Cmp: ₹100 as of 30^th May ’2022
• Stock support- ₹70-80
• Stock is trading near its multiyear support zone

The stock had made a high in 2014 of 237, but the stock has corrected up to 58% and trading around ₹100 as of May 2022.

Looking at the technical structure of the stock, the stock is now trading near a multi-year support zone of ₹70-80, stock has been in a downtrend since 2014-15, and one can try to look to enter the stock at the current levels with proper stop loss, after hearing the commentary of the company management and backed with India’s magnum group, any fund infusion, company’s re-rating will surely boost the stock prices. Stocks trend change will happen above ₹120-130 range, the stock has taken support of “200 ema in monthly chart” one can wait for the pullback or can enter with proper calculation of desired risk-reward appetite.

NOTE: ALWAYS USE STOP LOSS TO SAFEGUARD YOUR PORTFOLIO AND WEALTH.

REPORT PREPARED BY;

KUNNJ LALKA

MAIL ID: INFO@GOLDENTRUNK.IN

RECENT REPORTS ON – MAHINDRA EPC- CLICK ON THE BELOW LINK:

https://www.business-standard.com/article/news-cm/mahindra-epc-irrigation-consolidated-net-profit-declines-96-56-in-the-march-2022-quarter-122050400654_1.html

https://simplywall.st/stocks/in/capital-goods/nse-mahepc/mahindra-epc-irrigation-shares/news/we-think-mahindra-epc-irrigation-nsemahepc-has-a-fair-chunk

https://www.crisil.com/mnt/winshare/Ratings/RatingList/RatingDocs/MahindraEPCIrrigationLimited_December%2031,%202021_RR_282985.html

DISCLAIMER

THE INFORMATION CONTAINED HEREIN IS BASED ON THE ANALYSIS AND SOURCES THAT ARE CONSIDERED RELIABLE, INVESTOR NEEDS TO CONSIDER DUE DILIGENCE ON THEIR OWN, BEFORE INVESTING IN CAPITAL MARKETS.

THE REPORT IS PRIVATE, CONFIDENTIAL, AND USED ONLY FOR EDUCATIONAL PURPOSES

KUNNJ LALKA IS NOT A SEBI REGISTERED INDIVIDUAL.

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