Mahindra EPC Irrigation Limited

Industrials — Farm & Heavy Construction Machinery · NSE

₹106.50+₹6.20 (+6.18%)

DalalBaazaar Score

60 / 100

🟢 Good

Verdict

NEUTRAL

Risk

Low

Driven by micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Nothing on this snapshot stands out as an immediate concern — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

The 60-second version of Mahindra EPC Irrigation Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Mahindra EPC Irrigation Limited manufactures, sells, and markets micro irrigation systems in India and Uganda.

IndustryFarm & Heavy Construction Machinery

SectorIndustrials

Employees327

Annual revenue₹312 Cr

How does it make money?

Turns over ₹312 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹8 left at the operating level before interest, tax and depreciation. Each of its 327 employees supports ₹95.4 lakh of revenue a year, the signature of a people-led business.

EBITDA margin8.1%

Net margin4.1%

Revenue / employee₹95.4 lakh

Who are its competitors?

The closest listed comparisons in its industry are MAHINDRA & MAHINDRA LTD, ASHOK LEYLAND LTD, TATA MOTORS LIMITED, LARSEN & TOUBRO LTD.. These are the companies its valuation and returns are measured against elsewhere in this report.

MAHINDRA & MAHINDRA LTDP/E 17.8x · ROE 19.7%

ASHOK LEYLAND LTDP/E 25.2x · ROE 24.4%

TATA MOTORS LIMITEDP/E 37.1x · ROE 32.8%

LARSEN & TOUBRO LTD.P/E 30.1x · ROE 15.2%

What is its competitive advantage?Little sign of one

Returns on capital of 10.8% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

ROCE10.8%

ROE6.3%

Peer median ROE24.4%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +48% while net margin moved -169% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+48%

Margin effect-169%

DalalBaazaar Score

60/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.43 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast

Quality vs. Valuation

Company Quality

62/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

67/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

26.2x

2Y Median

58.4x

28 monthly readings · mean 117.6x · range 21.3x–240.9x

Sector Median

27.6x

median of 4 sector peers

🟢Current valuation is approximately 55% below its 2y median of 58.4x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟡Against its sector it is priced broadly in line with the peer median of 27.6x.

vs. its own history

Cheap

58.4x median over 28 months · -55%

vs. sector peers

Fair

27.6x median of 4 peers · -5%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

26.2x

P/B

1.60x

EV/EBITDA

13.5x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from -5.1% to 8.1% over 3 years.
Return on equity is rising
ROE has improved from -7.5% to 6.9%.
Return on capital is rising
ROCE has improved from -8.4% to 10.8%.
Valuation below its historical average
At 26.2x the stock trades 55% below its own median of 58.4x.
Very low debt
Debt/Equity of 0.24x leaves the balance sheet with plenty of headroom.

🔴 What Needs Attention3

Debt is rising
Total debt is up 199% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Receivables growing faster than sales
Receivables are up 91% against revenue growth of 48% — customers are taking longer to pay.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 199% over 3 years, from ₹15 Cr to ₹45 Cr.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🟡Receivables growing faster than salesFinancial
Receivables up 91% against revenue up 48% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from -5.1% to 8.1%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 55% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 91% against revenue up 48%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
3 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 11% a year✓ 14.1% CAGR
Latest reported year was 46.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 6%✓ 8.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹18 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.8x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✓ 10.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 5 neutral · 1 weak

Market Cap

₹298 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

26.2x

Fair

Fairly valued against the generic band

P/B Ratio

1.60x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹4.06

Profitable

Profitable on a per-share basis

ROE

6.3%

Weak

Weak capital efficiency

ROCE

10.8%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.24x

Low

Conservative leverage

Revenue Growth (YoY)

46.5%

Healthy

Healthy top-line growth

Profit Growth (YoY)

433.3%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

₹13 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹106.5

ROA

3.4%

Average

Average asset productivity

Operating Margin

5.3%

Average

Average margins

Net Margin

3.5%

Average

Average bottom-line conversion

Current Ratio

1.79

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.43

Defensive

Steadier than the market

52W Range Position

26%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

98.9 / 102.7

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

75.1

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹210 Cr	₹262 Cr	₹272 Cr	₹312 Cr	+14.1%
EBITDA	-₹11 Cr	₹8 Cr	₹16 Cr	₹25 Cr	—
EBITDA Margin	-5.1%	3.2%	6.0%	8.1%	—
PAT (Net Profit)	-₹12 Cr	₹2 Cr	₹7 Cr	₹13 Cr	—
EPS	₹-4.41	₹0.6	₹2.58	₹4.54	—
ROE	-7.5%	1.0%	4.2%	6.9%	—
ROCE	-8.4%	3.1%	7.5%	10.8%	—
Total Debt	₹15 Cr	₹16 Cr	₹25 Cr	₹45 Cr	+44.1%
Free Cash Flow	₹17 Cr	-₹1 Cr	-₹6 Cr	-₹18 Cr	—

🟢 Revenue has grown at 14.1% a year over 3 years.

🟢 EBITDA has turned positive, from -₹11 Cr to ₹25 Cr.

🟢 EBITDA Margin has risen from -5.1% to 8.1% over 3 years (+13.2 pts).

🟢 PAT (Net Profit) has turned positive, from -₹12 Cr to ₹13 Cr.

🟢 EPS has turned positive, from ₹-4.41 to ₹4.54.

🟢 ROE has risen from -7.5% to 6.9% over 3 years (+14.4 pts).

🟢 ROCE has risen from -8.4% to 10.8% over 3 years (+19.2 pts).

🔴 Total Debt has grown at 44.1% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹17 Cr to -₹18 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹352 Cr

Total Liabilities

₹167 Cr

Total Debt

₹45 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹16 Cr

Capex

-₹2 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

58.0%

Corporate Actions

Ex-Dividend Date

14 Jul 2021

Peer Comparison

Company	P/E	ROE
MAHINDRA & MAHINDRA LTD	17.8x	19.7%
ASHOK LEYLAND LTD	25.2x	24.4%
TATA MOTORS LIMITED	37.1x	32.8%
LARSEN & TOUBRO LTD.	30.1x	15.2%

Recent News

1 positive2 mixed3 general

Mahindra EPC Irrigation Q2FY27 Results: Net profit jumps 419% YoY

scanx.trade, 15 OctResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Is Mahindra EPC Irrigation the Best Stock in Its Sector? A Look at the Numbers

Univest, 01 Oct

Mahindra EPC Wins ₹3.32 Crore Order; Shares Gain 2%

HDFC Sky, 12 JunPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Mahindra EPC Irrigation amends code for fair disclosure of UPSI

scanx.trade, 15 Oct

Compare EPC INDUSTRIES with Raymond

Equitymaster, 30 Sept

Mahindra EPC slides on reportong dismal Q1 performance

Business Standard, 17 JulResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in overbought territory — momentum entries here carry more short-term pullback risk.

DalalBaazaar Thesis

🟡Business QualityAdequate10.2/20

🟢Financial HealthStrong15.6/20

🟢GrowthStrong13.6/20

🟡ProfitabilityModerate7.1/15

🟡ValuationFair9.5/15

🔴RiskHigh4.4/10

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 3 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 11% a year14.1% CAGR
✓EBITDA margin holds above 6%8.1%
✗Free cash flow remains positive-₹18 Cr
✓Debt / EBITDA stays below 2x1.8x
✓ROCE stays above 8%10.8%