PCG RESEARCH Agriculture Sector Picks Jan 30, 2018 PCG... · seen success for example Gujarat Green Revolution Company (GGRC) and Andhra Pradesh Micro Irrigation Project (APMIP).

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PCG RESEARCH Agriculture Sector Picks Jan 30, 2018

Outlook on Irrigation Sector

Irrigation in India promises a great scope for growth. India accounts for 7.7% of total global agricultural

output, less than 50% of the net sown area (proportion of the total area used for growing crops) has access

to irrigation. Areas with no irrigation facilities are totally dependent on unpredictable monsoons. Above all

parameters promise a great potential for irrigation facilities.

Government has stated that agriculture will be its main priority in the upcoming Budget, as there is a strong

possibility that government would like to boost sentiments on rural front in the run-up to general elections.

The government’s focus on agriculture auger well for the irrigation industry. Proper Irrigation facilities will

provide food security, minimise dependence on monsoons, improve agricultural output and create rural job

opportunities. Irrigation is the largest consumer of water in the country. The demand for water has been

consistently increasing other sectors, reducing the quantum of water available for agriculture.

India’s population stands at ~1.3bn and is estimated to rise at steady pace to reach 1.7bn by the year 2050.

(According to the World Bank estimates). Even though food grain production has increased significantly over

the years, there is a need for the production to increase at a fast clip in order to meet the ever growing

demand created with this population increase. Given this fact that land and water are limited resources, this

would require an improvement in the productivity of crops. India has 18 percent of the world’s population

with only 4 percent of the usable water resources and is expected to face the brunt of looming water scarcity

crisis. With the need to increase productivity while saving water, micro irrigation will play a key role for the

future of Indian agriculture.

The global micro irrigation system market is one of the fastest growing segments of the global agricultural

industry. This growth is fuelled by the Government encouragement for adoption of micro irrigation system as

a regular practice for future safety due to water scarcity, in order to conserve natural water resources. In

India though fragmented, the industry is in a position to aid Government programmes like Prime Minister’s

Krishi Sinchai Yojana (PMKSY). The Pradhan Mantri Krishi Sinchayee Yojana (“PMKSY”) was launched in July

2015 for a five year period with an outlay of ~Rs 50,000 crore. The major objective of the PMKSY is to

achieve convergence of investments in irrigation at the field level, expand cultivable land under assured

irrigation (Har Khet Ko Pani), improve on-farm water use efficiency to reduce wastage of water, enhance the

adoption of precision-irrigation and other water saving technologies (more crop per drop), enhance recharge

of aquifers and introduce sustainable water conservation practices by exploring the feasibility of reusing

treated municipal water for semi-urban agriculture and attract greater private investment in precision

irrigation system.

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Apart from various schemes, there have also been large-scale projects taken up at the state level that have

seen success for example Gujarat Green Revolution Company (GGRC) and Andhra Pradesh Micro Irrigation

Project (APMIP). The subsidy in last few years has been declining and we expect it to be hiked in this budget.

Benefits of Micro Irrigation:

a) Increase in water efficiency – 50 to 90%

b) Energy consumption savings – ~30%

c) Fertilizer consumption savings – ~28%

d) Productivity increase, Fruit/Crops – 40%, Vegetables – ~51%

e) Irrigation cost savings – ~35%

f) New crop introduction – 30% for farmers

g) Increase in Farmers’ income – 40 to 45%

With usage of micro irrigation systems, conveyance loss is minimal. Evaporation, runoff and deep percolation

are also reduced by using micro irrigation methods. Another water saving advantage is that water source

with limited flow rates such as small water wells can be used. Micro irrigation provides significantly higher

water usage efficiency due to proximity and focused application.

Efficient water use leads to additional benefits such as increase in the area under irrigation as well as more

usage of marginal/ degraded land

Agriculture accounts for 20-25 percent electricity sold in India. On an average, use of micro-irrigation

techniques can improve power efficiency by 30.5 percent, although this varies across states. Owing to more

judicious use of fertiliser as a result of more careful application of water, micro irrigation can improve

fertiliser consumption efficiency by 28.5 as percent on an average.

The average penetration at the all India level is 5.5 percent which is much lesser compared to countries like

Israel, US and even China. Penetration of micro irrigation systems is still very low in India. With half the

cultivable land in the country still being rain-fed, there is mammoth potential for promoting micro irrigation

in India. The Government should at least target more than 2 mn ha/year with a budgetary allocation of Rs

4000 crores (US$ 624 mn) / year and increase it by 20 percent yoy in order to increase the pace of adoption.

On the occasion of India Water week, in October 2017, Union Minister Shri Nitin Gadkari declared that 27

PMKSY projects will be completed by this year 285 new irrigation projects will be taken up in 2018 to provide

irrigation for 1.88 crore hectare of land. Shri Gadkari said drip irrigation and irrigation through pipeline will

be the priority areas for the Government as this will save large amount of water and also cut down the cost

involved in acquiring land. FICCI (Federation of Indian Chambers of Commerce and Industry) has included

micro irrigation as one of its priority areas.

PCG RESEARCH


Industry CMP Recommendation Buying Range Target Time Horizon

Agrochemicals Rs. 145 BUY Rs. 128-145 Rs. 163-187 12 Months

HDFC Scrip Code JAIIRR

BSE Code 500219

NSE Code JISLJAL

Bloomberg JI: IN

CMP as on 30 Jan 18 145

Equity Capital (Rs Cr) 95.9

Face Value (Rs) 2

Equity O/S (Cr) 47.95

Market Cap (Rs cr) 7190

Book Value (Rs) 91

Avg. 52 Week Volumes

12252313

52 Week High 150

52 Week Low 83

Shareholding Pattern (%)

Promoters 28.5

Institutions 51.9

Non Institutions 19.6

PCG Risk Rating* Yellow

* Refer to Rating explanation

Kushal Rughani [email protected]

Incorporated in 1986, Jain Irrigation (JISL) is a diversified company with key focus area into Agriculture

industry. Company is into manufacturing of multiple products having applications into irrigation such as drip

and sprinkler irrigation systems; PVC pipe, Polyethylene pipe (HDPE, LLDPE) etc. Further, it has also

entered into agro processing segment since last two decade under which the company processes

dehydrated onions & vegetables; processed fruits etc. Apart from this, the company also provides solutions

for solar pumps, solar water heating systems, photovoltaic systems etc. JISL is an integrated agri-business

company with over 10,000 dealers & distributors and 30 manufacturing plants across the globe. Company is

the second largest manufacturer of MIS in the world with domestic market share of more than 50%. JISL’s

product offerings include drip and sprinkler systems, PVC / LLDPE / HDPE pipes, PVC sheets, tissue culture,

solar pumps, solar water heating systems, photovoltaic systems etc. The company also sells processed

fruits and vegetables and is the biggest mango pulp processor and third largest in dehydrated onions

around the world.

Investment Highlights

Jain has also been providing MIS solutions to international market through its subsidiaries Naandan Jain

Irrigation (~60% of Subs MIS revenue) and Jain Irrigation Delaware (~40% of Subs MIS revenue). We

believe acquisition of Agri-Valley irrigation (AVI) and Irrigation Design and Construction (IDC) could provide

decent opportunities to JISL to capture potential California MIS market going ahead, which could result into

augmentation of US business share to the overall pie. The California market was impacted due to drought

situation in last 2 yrs, however better monsoon has improved visibility for MIS during the year. Further,

Netafim being the largest player into micro irrigation industry was supplying part of its MIS products

through AVI & IDC in California. AVI & IDC is likely to generate combined revenues of ~Rs 7-8bn in FY18.

Further, both companies have been generating average EBIT margins of around low-mid teens as against

present subsidiaries MIS EBIT margins of 6-7% and hence incremental revenues from AVI & IDC could

result in expansion of group MIS operational performance.

Maharashtra makes drip irrigation mandatory for sugar cane cultivation

In Jul 2017, Maharashtra government had decided to make drip irrigation mandatory for sugar cane

cultivation over 3.05 lakh hectares in the state. Farmers who opt for drip irrigation will be given loans at

2% rate of interest with a cap of Rs 85,000 per hectare.

The decision follows concerns raised by environmentalists and irrigation experts about over-exploitation of

water.

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INVESTMENT IDEA 30 Jan 2018

Jain Irrigation

mailto:[email protected]

PCG RESEARCH


Currently, sugar cane is grown over 9.42 lakh hectares in Maharashtra (2017-18) and only 2.25 lakh

hectares is covered by drip irrigation. The remaining area under sugar cane cultivation uses flood, canal, and

sprinkler irrigation systems that consumer more water as compared to drip irrigation.

In terms of the potential opportunity for domestic MIS market, the govt. has identified area of 69.5 mn

hectare for MIS (Drip: 27mn, Sprinkler: 42.5mn). The country has been witnessing capacity addition of

around 1 mn hectares per annum, which validates nation to require more than 50 years to achieve the

overall target and hence, we believe imposition of certain policies to make MIS usage mandatory could drive

robust growth for the micro irrigation industry. Maharashtra being one of the largest manufacturer of

sugarcane has come up with mandate to use MIS solution across the sugarcane cultivated land area. It is

estimated that Maharashtra has 1 million hectares of cultivated land for Sugarcane of which govt. has been

planning to add 300,000 hectares by FY19 under MIS, while it will be mandatory for farmers to add

incremental sugarcane cultivated area over the next few years under phased manner. Further, 1 hectare of

MIS solutions could cost to the tune of Rs 50,000-80,000. Hence, potential MIS opportunity in Maharashtra is

pegged at Rs 15-20bn over the period of next 2 years. Jain has around 60% market share in the state and

hence any progress could lift JISL’s MIS performance further.

Apart from this, Uttar Pradesh (UP) is considered as the largest producing state for sugarcane with

cultivatable land area of 2.2 million hectares (~43% of India’s sugarcane land area). Further, despite UP

holds highest share in terms of sugarcane cultivable land area, yield/hectare is lowest against other

sugarcane producing states (Note: UP’s yield ~62 tons/hectare against average of ~80-90 tons/hectare).

This could be primarily owing to conventional way of irrigation and hence validates the argument that the

state govt. has to adopt micro irrigation solution to improve acreages. Any positive development in the state

could unlock further potential opportunity of around Rs 200bn in medium to long term (no mandatory MIS

plans are underway by the state govt. presently). Jain has market share of 50% in domestic MIS segment

and hence, this itself provides potential market opportunity of ~Rs 100bn over long term.

Robust industry growth owing to govt. initiatives to assist strong growth from PVC and HDPE

segments in long run

With govt’s focus to add at least 1 million hectares under micro irrigation every year, we expect the demand

for PVC pipe is likely to augment in the coming future given the PVC constitutes 15% of overall MIS cost.

This could result into sizable potential opportunity. Moreover the govt. has also planned to build ~120 mn

toilets by 2020 in rural India. This provides robust growth opportunity for PVC polymer industry in the years

to come and JISL with a market share of ~19% of organized PVC pie is expected to garner potential

opportunity in medium to long run. We expect PVC business to record revenue growth of 7.5% over FY17-

20E as against ~1% CAGR over FY14-17.

HDPE pipe has usage into sewage treatment plants, water supply, desalination plants,

telecommunication/gas sector etc. Jain has been supplying HDPE pipes largely to institutions such as govt for

projects related to water supply and sewage. The growth will be supported by robust govt initiatives for

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‘Smart cities’ and ‘Affordable housing’. This could translate robust demand for natural gas supplies and in

turn HDPE pipes demand. JISL has total capacity of 44,000 MT for HDPE with market share of ~20%.

Expand the retail product portfolio through JFFL

The Company's subsidiary Jain Farm Fresh Foods Ltd. (JFFL) intends to expand the retail product portfolio of

agro-processed products in order to capture opportunities to produce value added products.

It intends to commence the production of processed fruit snacks in India under an in-house brand. Company

intends to use the processed fruit pulps that it produces as raw materials for the manufacturing of such value

added processed fruit snacks. In addition, Jain Farm Fresh Foods Ltd. is currently conducting trials for the

introduction of retail fruit juice vending machines with leading fast-moving consumer goods Jain Farm Fresh

Foods Ltd. Again Jain Farm Fresh Foods Ltd. intends to use the processed fruit pulps that it produces as raw

material for the manufacturing of such fruit juice. JFFL also intends to introduce additional retail processed

fruit products, such as frozen fruit puree made from jamun, strawberry and guava as well as ready-blend

spices.

Key Triggers

Continued interest cost savings

Rebound in MIS growth in H2 FY18 and FY19

Timely MIS subsidy disbursals outside

Maharashtra, resulting in reduced working capital

Continued strong growth in agro processing

Rationalized capital expenditure program

Elevated prices for key crops like sugarcane and cotton

AVI & IDC acquisition to aid International MIS business operational performance

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Business Segments

Jain Irrigation has an extensive range of product portfolio and a global geographical presence provides it with

a diversified revenue base. It operates through four business segments which offer an extensive product

portfolio. Company’s hi-tech agri input products segment comprises of MIS products, solar pumping systems,

integrated irrigation projects, cultivated tissue culture plants, precision farming products and advisory

services. Its Plastic Products segment comprises of Piping systems, PVC sheets and Turnkey services. The

Company’s Agro-Processing products segment comprises of Dehydrated Onion and Vegetable products,

Processed Fruit products and Biogas Power generation. Solar segment provides solar pumps, solar PV

module, solar power, solar thermal systems and solar appliances. Company believes its extensive product

portfolio has allowed it to maintain well balanced operating revenue stream without excessive reliance on

single product.

Hi-tech Agri inputs Products

Revenue from solar pump, tissue culture and micro irrigation systems is included under this segment. In

terms of market penetration, it provides solar pump and tissue culture solutions only to domestic market,

while MIS products have been catered to both domestic and international market. Hi-tech contributed 46% to

the overall revenue in FY17, of which MIS comprised 96% share and the rest came from tissue culture.

Company includes solar pump revenue in MIS segment. The revenue from hi-tech has posted 6% CAGR over

FY14-17 to Rs 32.2bn with minor improvement in EBIT margins to 17.4% in FY17.

Micro Irrigation System (MIS)

JISL provides drip and sprinkler irrigation solution under MIS segment. Revenue from solar pumps is also

included under MIS. The company has manufacturing capacity of 15,000 solar pump located at Jalgaon. The

manufactured pumps are upto 5 HP, while higher than 5 HP pumps are outsourced. In terms of Micro

irrigation, the company has manufacturing facility across Jalgaon, Israel (Subsidiary: Naandan Jain

Irrigation) and US (Subsidiary: Jain Irrigation Delaware), which produce entire range of products used in

drip/sprinkle irrigation such as drip lines, drip tapes, drip tubes, drippers, spray heads/jets/foggers, filters,

valves and other fittings accessories. The subsidiaries such as Naandan caters to Israel, Europe and part of

Africa market, while Jain Irrigation Delaware provides solution to US market. In the beginning of FY18, Jain

acquired IDC & AVI, which are considered as the largest distributors for MIS solutions in California and hence

provides strong revenue visibility in the coming years. Apart from this, the company has also been providing

solutions for precision farming such as green house, poly house etc, which we believe are largely supplied to

international markets. Further, the company has in house R&D team, which helps company to increment its

product basket every year. MIS segment has recorded revenue CAGR of ~5% over FY14-17 to ~Rs 31bn, of

which standalone MIS constitute ~61% of overall MIS revenue.

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Plastics and PE Pipes

The revenue from PVC, PE pipe and PVC sheet is included under this segment. JISL manufactures different

sizes of PVC pipes, which finds application in agriculture industry with key set of customers are farmers.

Apart from this, the company has also been gaining traction among institution sales for PVC. Moreover, it

also produces PE pipes, which are largely used in sewage, water & gas distribution, chemical & cable

conveyance etc. In terms of product portfolio for PE pipes, JISL is one of the largest manufacturers of 1600

mm PE pipes. Further, in house R&D team has assisted company to add 2200 mm PE pipe under its product

portfolio recently.

PVC sheet finds application in advertising signs, exhibition stands, interior designs, bathroom fittings, panels

& cabins etc. JISL has two manufacturing facility for PVC sheet i.e. India and Ireland while PVC & PE pipes

are manufactured at Jalgaon. Company has installed capacity of 389,000 MT for both PVC & PE pipe including

fittings, while around 27,150 MT for PVC sheet. In terms of market dominance, JISL holds around ~19%

market share for PVC, while 20% market share for PE pipes in domestic market.

Revenue for plastic division remained subdued in last 2-3 years given the deficient monsoon resulting into

lower demand for PVC products into agriculture industry. The revenue for the segment grew by mere ~3%

CAGR over FY14-17 to ~Rs 18bn. However, we believe better monsoon during last year has outpaced

historical growth and assisted company to register ~7% YoY growth for FY17. We expect segment revenue to

revive in the coming years on the back of good monsoon.

Agro Processing Division

JISL has formed different subsidiary called JFFFL (Jain farm fresh foods limited) at the end of FY16, who

carries out operations for agro processing business in domestic and overseas market. The subsidiaries such

as Cascade Speciality US and Sleaford UK have been into parental structure of JFFFL, which are focused for

different overseas markets. The standalone revenue (under brand named Jain Farm Fresh) comprises

revenues from fruit and dehydrated onion, of which fruit constitutes 65-70% of JFFFL – India revenue and

the rest from dehydrated onion. The fruit revenue is largely driven by mango pulp, of which 45% (~Rs 2.5-

3bn) is led by Coca-Cola for its Mazza brand and the rest is supplied to various key customers such as

Manpasand Beverages and others. Apart from mango pulp, the company also offers other fruit variants such

as guava, jamun, strawberries to various customers, which are also comprised in the overall fruit revenue

(revenue contribution is low presently from other fruit variants). In terms of subsidiaries, Sleaford UK is

considered as trading subsidiary, which sells products like dehydrated potatoes / onion / garlic / vegetables,

herbs &spices, canned products (vegetables and fruits), fruit purees etc, while Cascade manufactures

products such as frozen food (bell pepper / tomatoes/ mushrooms / black olives etc) and dehydrated onions.

All of these has placed JISL to become one of the largest agro processing company in the global market.

JFFFL conducts its operations through 6 manufacturing plants with 4 plants located in India (each in

Maharashtra / Gujarat and 2 in Andhra Pradesh) and remaining two in UK and US each. Its domestic

manufacturing capacity for dehydrated onion and vegetable products stands at 33,148 MT and processed

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fruit products at 159,000 MT. Additionally, the company also manufactures dehydrated onion and vegetable

products at global level with installed capacity to stand at 38,937MT. JFFFL has also forayed into retail

segment last year by introducing new variants of strawberry and jamun pulp in addition to Aamrus

(introductory product) under afore mentioned brand named, “Jain Farm Fresh”. JFFFL is further planning to

introduce more innovative products for the retail consumer market which will further drive the growth for

food processing division. In terms of financial performance, the revenue from segment increased at CAGR of

9% over FY14-17 to ~Rs16bn.

GST rates cut to 12% in Jan 2018

The GST on Drip irrigation systems including laterals. Sprinklers products has been reduced from 18% to

12% as per the decision taken at the 25th GST Council Meeting held in Jan, 2018. The new GST rates shall

be effective from 25th Jan, 2018. The Company has decided to pass on this benefit of 6% directly to the

customers/farmers. This is a positive step taken by the Government to encourage farmers to invest in

efficient irrigation systems which saves water and improves productivity. We believe that this action will have

a positive impact in the upcoming monsoon season for our Drip Irrigation Division.

Recent Order wins

In Oct 2017, company’s subsidiary Naandaan Jain got an order worth US $ 24mn from the ministry of

Honduras. This project will be completed in 18-20 months. Another order from domestic business worth

Rs.178cr was awarded to JISL in the Pipes segment and Rs.85cr order from Bhusawal water supply under

AMRUT scheme.

In Nov 2017, company bagged an order worth Rs.183cr for AMRUT water supply project. This project is for

Jalgaon city water supply scheme. Project will be completed in the next 24 months. Another order worth

Rs.126cr was awarded for “Har Khet Ko Pani” project in Maharashtra.

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Micro Irrigation Systems and Equipment

Plastic Products

Source: Company, HDFC sec Research

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Jain Farm Fresh Foods Ltd (JFFL)


Q2FY18: Key highlights

1) Hi-tech agri input segment: Consolidated revenue increased 18% YoY to Rs 810cr driven by

additional revenues from the US acquisition, growth in overseas market and higher exports to Africa.

Retail business declined 20% YoY to Rs 230cr because of a sluggish rural demand and GST impact; 2)

Agro processing division: India operations (Jain Farm Fresh) grew strong 17% YoY driven by

domestic performance. However, because of weak international subsidiaries (impacted by currency

appreciation), the overall growth was once again muted, rising only 2% YoY 3) Plastic division:

Reported 8% YoY revenue growth driven by PE pipes and plastic sheet division.

Food processing business

Business in India grew 17% YoY driven by domestic market.

Spice plant will commence operations in Q3 FY18, but FY19 will be the first full year of operation.

It has signed an MoU with Coco Cola and Government of Maharashtra for an orange juice processing

unit.

The company is building distribution in the retail segment. Aims to expand distribution reach to

100,000 locations.

Company targets food revenue of around Rs 1800cr for FY18 with EBITDA of ~Rs 300cr.

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Debt:

Repaid one FCCB of US$ 40mn, including premium on redemption was US$ 45mn. FCCB was held by

IFC. Only US$ 10mn is due. This will be due in April next year.

JISL targets debt/EBITDA of 3.0x from ~c.3.8x.

Company had debt of ~Rs 4000cr as on H1 FY18 vs. ~Rs 3400cr in FY17. Debt increased primarily

due to higher inventories. Most of the interest reduction benefits will come from Q4 FY18.

Q2FY18 conference call: Key highlights

GST:

GST has not impacted the piping and food divisions.

Micro Irrigation System (MIS)

In case of MIS, tax rate earlier was 0%, but in the initial GST announcement came in at 18%.

Also, state governments took a lot of time in approving projects due to this increase in rates.

Even the revision to 12%, which came in later, was only on sprinklers and drippers. Therefore as of

Jan 2018, the Government has reduced the GST rates to 12%.

Retail was negative due to GST disruption and also due to rural distress.

Demonetization impacted performance as rural co-operatives were short of funds to lend

Expectation for AP and Gujarat receivables has come down.

Sugar cane

Project business remains robust and based on that JISL is confident of achieving its growth guidance.

Retail business has also picked up in the past couple of months.

International MIS

Revenue was US$ 26mn from the US acquisition

One entity had in line performance on EBITDA (~10% margin). EBITDA for both entities considered

together was around 7-7.5%.

Expects benefit from this business to flow from next year.

Piping:

Piping business was driven by the PE pipes segment.

Retail pipes segment continued to remain muted.

Management expects the PE business to grow at 15% plus in FY18; grew 17% in H1FY18.

PVC pipes utilization has been only 60% due to subdued demand.

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Acquisitions in 2017

Jain Irrigation Systems Ltd (JISL), the country’s largest micro-irrigation firm, has acquired Australian agri-

tech firm Observant Pty Ltd, marking its fourth reported acquisition in the overseas market. Company has

paid Rs 13cr for the deal all in cash.

The deal will enable Jain Irrigation to support Indian farmers using Observant’s broad field monitoring and

control technology. Observant is known globally for its in-field hardware and cloud based applications for

precision farm water management.

Jain Irrigation acquired two US firms for US $48.5 mn in Apr 2017

Jain Irrigation has acquired two irrigation and distribution companies – Agri-Valley Irrigation Inc and

Irrigation Design and Construction Inc — in the US for US $48.5 million (about Rs 315 cr).

The company through its wholly-owned US subsidiary Jain Irrigation Inc acquired 80 percent stake in both

the US irrigation distribution companies. With a combined revenue of US $120 million and an EBITDA margin

of 7-7.5% on combined Entity, AVI and IDC will enable Jain Irrigation to distribute its leading portfolio of

Agriculture Technologies such as observant, puresense and gavish at 13 locations in California, besides

taking over 225 employees on its payrolls. Jain Irrigation has retained the existing management of AVI and

IDC to drive future growth.

View & Valuations

Jain irrigation is considered to be one of the most renowned player in Agriculture industry with core focus

area of ‘Micro irrigation solutions’ provider. However with management’s constant focus to diversify the

presence across different businesses, JISL has strengthened their existence into other verticals such as PVC

& PE pipe, Agro processing, Tissue culture, etc. Further, vast distribution reach with over 5,000 dealers has

also assisted the company to mark their presence across different touch points, which in turn helped JISL to

hold between 20-50% market share across different business segments. MIS market share at ~45% while

PVC fittings at ~20%. We believe increasing budget outlay by central govt. to improvise ‘Agriculture’ and

‘Infrastructure’ position into the country could augur well for the players like JISL in medium to long term

given the fact that it holds a dominant presence into the concentrated areas. Apart from this, inorganic

growth (AVI & IDC) along with organic growth through expansion into agro processing business (Spices,

Oranges) could stimulate financial performance growth further in the years to come. We believe the key

factor affecting MIS growth prospects in the past was less capital outlay from central govt., however

increasing outlay post new govt. coming into radar has resulted an improvement in the outlook for MIS

industry during recent times.

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Jain Irrigation has posted 6% revenue and 7% EBITDA cagr over FY14-17. PAT was up by ~7% CAGR over

FY13-17 with average NPM of ~2.2%. The subdued net margin is largely on account of higher financing

costs. We have assumed 12% revenue cagr from MIS segment while plastics and Agro division would post

7% and 8% revenue cagr over FY17-20E respectively. At the same time, from net loss in FY14, it has posted

Rs 176cr PAT for FY17. We expect 10% revenue and 17% EBITDA cagr over FY17-20E. We have estimated

230bps margin expansion over the same period. Strong revenue growth coupled with a robust margin

expansion and controlled finance costs would lead to 41% PAT cagr over FY17-20E. The stock trades at 13x

FY20E EPS and ~7x EV/EBITDA. We recommend investors to buy the stock at CMP of Rs 145 and add on

declines to Rs 128 with sequential targets of Rs 163 and Rs 187 (based upon ~18x FY20E EPS).

We believe the key factor affected MIS growth prospects in the past was less capital outlay from central

govt., however increasing outlay post new govt. coming into radar has resulted an improvement in the

outlook for MIS industry during recent times.

Key Risks

Withdrawal of subsidies for micro irrigation is a key risk that could impact JISL’s growth

Poor monsoon, seasonality and cyclical nature of agriculture could impact the company’s agro-

processing division by hitting the availability as well as prices of agro commodities. Though poor

monsoon is unlikely to impact MIS in the short term, in case of recurring monsoon failure, the

segment’s growth may slow down.

Most of JISL’s activities are working capital intensive, which may constrain the company from

achieving targeted growth.

USD/INR volatility may impact export revenues as well as margins. As the company is having high

D/E, interest rate tightening may impact profitability.

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Revenues to witness strong ~16% cagr over FY17-20E


EBITDA trend over FY17-20E


EBITDA Margin (%)


Return Ratios (%)


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MIS revenue to see ~12% cagr


FY20E Revenue Split (%)


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Income Statement (Consolidated)

(Rs Cr) FY15 FY16 FY17 FY18E FY19E FY20E

Net Revenue 6153 6486 6939 7561 8548 9429

Other Income 41 33 61 68 73 89

Total Income 6194 6519 7000 7628 8621 9518

Growth (%) 5.6 5.4 7.0 9.0 13.1 10.3

Operating Expenses 5373 5668 6000 6495 7297 7978

EBITDA 821 851 1000 1134 1324 1539

Growth (%) 1.2 4.9 14.7 13.6 17.3 16.0

EBITDA Margin (%) 12.7 12.6 13.5 14.1 14.6 15.4

Depreciation 244 297 301 328 345 357

EBIT 577 554 699 805 978 1182

Interest expenses 469 491 459 454 472 460

PBT 108 63 240 350 505 720

Tax -24 18 67 98 142 201

RPAT 131 45 173 238 349 498

Growth (%) -233.6 -16.7 280.4 45.5 45.2 41.9

EPS 1.2 1.0 3.7 5.0 7.3 10.4 Source: Company, HDFC sec Research

Balance Sheet

FY15 FY16 FY17 FY18E FY19E FY20E

SOURCE OF FUNDS

Share Capital 92.5 95.3 95.9 95.9 95.9 95.9

Reserves 3475 3969 4062 4262 4564 5015

Shareholders' Funds 3568 4064 4158 4358 4660 5111

Long Term Debt 1657 1620 2220 2450 2315 2204

Net Deferred Taxes 449 480 488 506 529 547

Long Term Provisions & Others 145 125 127 144 174 201

Minority Interest 0 102 109 109 109 109

Total Source of Funds 5819 6391 7102 7567 7787 8173

APPLICATION OF FUNDS

Net Block (incl CWIP) 4566 4559 4488 4410 4414 4457

Deferred Tax Assets (net) 172 206 188 205 215 225

Long Term Loans & Advances 633 644 687 716 749 806

Total Non Current Assets 5371 5409 5363 5330 5378 5488

Current Investments 0 35 0 50 88 140

Inventories 1830 1875 2258 2424 2693 2919

Trade Receivables 1940 2174 2283 2527 2787 3022

Short term Loans & Advances 21 20 26 36 62 80

Cash & Equivalents 304 380 367 782 627 603

Other Current Assets 858 865 833 929 1012 1154

Total Current Assets 4953 5349 5767 6748 7269 7919

Short-Term Borrowings 2314 2132 1235 1614 1664 1783

Trade Payables 1355 1341 1538 1662 1891 2056

Other Current Liab & Provisions 835 884 1239 1214 1275 1313

Short-Term Provisions 19 22 25 30 39 47

Total Current Liabilities 4507 4365 4033 4516 4864 5224

Net Current Assets 446 984 1734 2232 2405 2694

Total Application of Funds 5819 6391 7102 7567 7787 8173 Source: Company, HDFC sec Research

PCG RESEARCH


Cash Flow Statement


Reported PBT 31 63 240 349 507 719

Non-operating & EO items -41 -33 -61 -68 -73 -89

Interest Expenses 469 491 459 454 472 460

Depreciation 244 297 301 328 345 357

Working Capital Change 139 -464 -773 -83 -327 -345

Tax Paid 24 -18 -67 -98 -142 -201

OPERATING CASH FLOW ( a ) 866 336 99 883 782 902

Capex -2,192 -233 -230 -250 -350 -400

Free Cash Flow -1,327 103 -131 633 432 502

Investments 26 -42 12 -46 -43 -38

Non-operating income 41 33 61 68 73 89

INVESTING CASH FLOW ( b ) -2,126 -242 -157 -228 -320 -349

Debt Issuance / (Repaid) 606 -26 610 265 -82 -66

Interest Expenses -469 -491 -459 -454 -472 -460

FCFE -1,190 -414 20 444 -122 -24

Share Capital Issuance 0 105 8 0 0 0

Dividend -28 -29 -43 -51 -63 -74

FINANCING CASH FLOW ( c ) 109 -441 116 -241 -616 -600

NET CASH FLOW (a+b+c) -1,152 -347 58 415 -154 -48 Source: Company, HDFC sec Research

Key Ratios


EBITDA Margin 12.7 12.6 13.5 14.1 14.6 15.4

EBIT Margin 9.4 8.5 10.1 10.6 11.4 12.5

APAT Margin 0.9 0.7 2.5 3.3 4.3 5.5

RoE 1.9 1.3 4.3 5.6 7.7 10.2

RoCE 9.9 8.7 9.8 10.6 12.6 14.4

Solvency Ratio

Net Debt/EBITDA (x) 4.7 4.1 3.3 3.0 2.6 2.2

D/E 1.1 0.9 0.8 0.9 0.9 0.8

Net D/E 1.0 0.8 0.7 0.7 0.7 0.6

PER SHARE DATA

EPS 1.2 1.0 3.7 5.0 7.3 10.4

CEPS 6.5 7.3 9.9 11.8 14.5 17.8

BV 77 85 87 91 97 107

Dividend 0.5 0.5 0.8 0.9 1.1 1.3

Turnover Ratios (days)

Debtor days 115 122 120 122 119 117

Inventory days 109 104 109 117 115 113

Creditors days 107 104 107 105 109 108

VALUATION

P/E 122.5 136.9 38.5 28.4 19.4 13.6

P/BV 1.8 1.7 1.6 1.6 1.5 1.3

EV/EBITDA 13.0 12.4 10.8 9.5 8.1 7.0

EV / Revenues 1.6 1.6 1.5 1.3 1.2 1.1

Dividend Yield (%) 0.4 0.4 0.5 0.6 0.8 0.9

Dividend Payout 43.4 48.5 20.5 18.1 15.1 12.5 Source: Company, HDFC sec Research

PCG RESEARCH


Price Chart

RECOMMENDATION HISTORY

Date Reco Price Reco Targets

18 Sep - 2015 Rs 60 Buy Rs. 119

02 Jun - 2017 Rs 102 Buy Rs. 122

29 Jan - 2018 Rs 145 Buy Rs 163-187

Rating Definition:

Buy: Stock is expected to gain by 10% or more in the next 1 Year. Sell: Stock is expected to decline by 10% or more in the next 1 Year.

PCG RESEARCH


Industry CMP Recommendation Buying Range Target Time Horizon

Plastic Products Rs. 189 BUY Rs. 168-179 Rs. 219 - 257 12 Months

Vanillin to be the key growth driver

HDFC Scrip Code EPCIND

BSE Code 523754

NSE Code N.A.

Bloomberg EPC: IN

CMP as on 30 Jan’18 189

Equity Capital (Rs Cr) 27.6

Face Value (Rs) 10

Equity O/S (Cr) 2.76

Market Cap (Rs cr) 534

Book Value (Rs) 51

Avg. 52 Week Volumes

108120

52 Week High 215

52 Week Low 132

Shareholding Pattern (%)

Promoters 54.7

Institutions 2.7

Non Institutions 42.6

PCG Risk Rating* Red

* Refer to Rating explanation

Kushal Rughani [email protected]

EPC Industrie provides micro irrigation systems (MIS), including drip and sprinklers, agricultural pumps,

greenhouses and land scape products. The Company provides solution for agriculture with a focus on micro-

irrigation, pumps and inter-related requirements of fertigation and agronomic support. Its products consist of

drip irrigation system, including online drip irrigation, inline drip irrigation and drip irrigation components;

sprinkler irrigation system, including rain gun and nozzle; pumps, including bore well, open well submersible

pumps; pipes, including high-density polyethylene (HDPE) pipe coils and pipes, and landscape and turf

irrigation, including valves, nozzles, rotors and spay bodies for commercial landscaping, residential

landscaping and play grounds. Its services include agronomy support services and agri helpline for crop and

farm advisory services. Company operates Agri Showroom, which offers various agri input products and

services.

Investment Highlights

Maharashtra ban revocation bodes well

EPC Industrie (EPC) is 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.

The move is in tandem with the management guidance. Given the Maharashtra’s state government thrust on

making drip irrigation mandatory for sugarcane cultivation in the state and the consequent incremental

opportunity size (~Rs 9000 crore), order bodes well for the company. EPC will now be able to address this

incremental opportunity given its stronghold in the state prior to imposition of ban. Maharashtra accounted

for a significant share of revenues for EPC (amounting to ~15%).

EPC, a Mahindra & Mahindra (M&M) subsidiary, is a micro-irrigation system (MIS) and component

manufacturer based out of Nashik, Maharashtra. The company was acquired by M&M in February 2011 and

has been well capitalised over the years by M&M. EPC commands ~5% market share (sales Rs 200cr in

FY17) out of the total industry size of ~Rs 4000 crore as of FY17. The company recently ventured into the

greenhouse farming & agri pumps segment with the aim of becoming total agri solutions player domestically.

As of FY17, EPC is registered in 15 states under subsidy programme in India. The company has more than

900 channel partners and 18 regional offices.

PCG RESEARCH

INVESTMENT IDEA 30 Jan 2018

EPC Industries


PCG RESEARCH


EPC Industries is a Mahindra group company with just Rs 520 crore market cap which on standalone basis

cannot reach to entire rural India while Mahindra & Mahindra (M&M) has a robust distribution network, so this

company can ride on parent’s distribution network and spread itself across rural India. Moreover, water

scarcity is the serious issue so, EPC has all the ingredients to deliver robust growth and to become a multi-

bagger.

MIS and growth outlook

Micro irrigation system (MIS) is essentially an irrigation technique wherein regulated quantum of water is

applied to the most critical part of the plant i.e. roots. It is implemented through the drip & sprinkler irrigation

techniques. Drip is used for widely placed crops like sugarcane, watermelon, onion, cotton, banana,

vegetables, etc, while sprinkler is used for closely placed crops like wheat, groundnut, maize, bajra, etc. The

benefits of MIS vis-à-vis traditional method of irrigation include: increase in crop yield (~20-30%) and savings

of labour (~30-50%), water (~30-40%) & power (~20-40%).

Farmer centric Budget 2017-18; focused to double farm income by 2022 Union Budget 2017-18 delivered on

its expectations with a clear focus on achieving its vision to double farm income by 2022. Due emphasis was

given to both productivity and farm realisations. Total allocation towards agriculture & farmer welfare was

increased 16% YoY to Rs 41,855 crore in FY18E. Notably, a sizable increase in allocation to the insurance

scheme to Rs 9000 crore (up 64% YoY) and irrigation scheme (PMKSY) to Rs 7377 crore (up 28% YoY) was

encouraging. Moreover, the government increased allocation towards subsidy under farm mechanisation to Rs

525 crore in FY18E (vs. Rs 358 crore in FY17).

Currently, state governments are also giving a strong thrust to MIS with Maharashtra making it mandatory for

all cane producers to switch to drip irrigation in the next two years post which their produce would not be

procured for crushing if it is not produced using drip technique. Tamil Nadu government also promotes MIS

through 100% subsidy to farmers opting for it. The only dampener for the MIS Industry in India is the low

farmer awareness and delay in subsidy release by the state governments. However, given the benefits arising

out of usage of MIS and low penetration, the industry is poised for an exciting growth journey ahead.

Capacity Utilization to improve substantially

EPC is running at ~50% capacity utilization. They may require capital in FY19 when it will reach work 80%

capacity utilization, the company will go for fresh capex which will lead to some dilution or debt on the books.

The company has guided for minimum capex till they achieve 80% of utilization levels. Currently they are

building some inventory on anticipation of strong sales from FY18 onwards.

The Company is focusing on project business (51% of overall revenue) from selective states with good

payment track record (Focusing on states like Gujarat, AP, Telangana and MP). The company is not focusing

on states like Punjab, Rajasthan, Orissa and Haryana), where the certainty of receiving payments is relatively

PCG RESEARCH


higher. But having said that focusing on project business will increase their working capital requirement going

forward.

EPC Industries has vision to be a large organisation. They are offering facilities like "Help Line" for farmers,

setting up samrudhi bazaar etc. They have tied up with IOC to set up 100 Samrudhi Bazaar at IOC fuel

stations by franchisee where they will be selling products of company which will enhance its presence to its

customers. They have invested heavily in setting up live projects also where demo of MIS given to farmers,

however due to these efforts the employee & Personal cost to sales is higher at 11% viz - a - viz 5-6% of

peers.

We expect EPC industry to benefit from parentage of Mahindra group and likely to derive significant synergies

from its parentage and group companies. The company has been well capitalized and supported by parent in

last few years. We believe Mahindra Agri Solutions (unlisted company) (MASL), which is wholly owned

subsidiary of Mahindra group has been made flagship company where all Agri business of Mahindra Group has

been consolidated except EPC Industries. We believe MASL can be merged with EPC irrigation in next few

years once MASL will be profitable and promoters will increase their stake in EPC irrigation via merger.

EPC is currently fourth largest Irrigation player in the country. They are aiming to be in top 3 in the next 3

years. We expect company to be benefitted by favorable budgetary allocation in MIS on the back of

government thrust.

Key Highlights

M&M is the promoter of EPC Industries. Company was acquired by M&M in February 2011 and has

been well capitalised over the years by M&M. EPC commands market share of ~5% (sales of Rs 201cr

in FY17) out of the total industry size pegged at around Rs 4000 crore.

EPC Industrie (EPC) is a micro-irrigation system (MIS) player manufacturing drip and sprinkler

irrigation system domestically.

We are expecting EPC industry to benefit from parentage of Mahindra group and likely to derive

significant synergies from its parentage and group companies. The company has been well capitalized

and supported by parent in last few years.

FY14-17 has been largely muted for EPC given distress in the rural economy amid deficient monsoons

in 2014 & 2015 and change in subsidy disbursal mechanisms by various state governments.

Going forward, with the government’s thrust on augmenting penetration of water conservation and

efficiency driven MIS domestically we believe the industry is likely to witness high double digit growth

in next two-three years which would benefit players like EPC Industries.

PCG RESEARCH


For FY17, net sales were at Rs 201 crore, flat YoY with EBITDA and PAT at Rs 14.2 crore, Rs 9.9 crore,

respectively.

We expect EPC to clock strong revenue and robust earnings growth over FY17-20E primarily on pick-

up in MIS activity domestically. Company has started production from its Baroda Unit from Dec 2017

which would also drive growth.

Micro-irrigation is essentially an efficient way of irrigating the farmlands and is core to the

government’s vision of doubling farm income by 2022. EPC Industries remains debt free as on FY17.

We expect strong sales and robust earnings growth over the next two-three years on the back of pick-

up in MIS activity domestically.

View & Valuation

EPC Industries has posted subdued growth over the last three years with 5% revenue and 9% PAT cagr over

FY14-17. We estimate 13% revenue and 32% PAT cagr for FY17-20E led by higher capacity utilizations and

govt.’s thrust on MIS projects. EPC trades at ~21x of FY20E earnings and 1.7x EV/Revenues. We have valued

EPC Industries at ~29x FY20E earnings and ~2.4x EV/Revenues. The company is a pure play on the MIS

theme that can create wealth from longer time frame, given trajectory of farmer awareness on MIS &

subsequent capitalisation of opportunity for the company. We recommend buy on EPC at cmp of Rs 189 and

add on dips of Rs 168-179 with sequential targets of Rs 219 and 257.

Key Risks

Micro Irrigation industry has threats such as uneven distribution of rainfall, competition from

unorganized sector, government policies and a constant fluctuation in polymer prices.

Seasonality is also another major concern for all irrigation companies as major business originates from

non-monsoon months. However, this concern gets addressed through the company’s well spread

operations in different states where monsoon months vary.

PCG RESEARCH


Revenues to witness strong ~13% cagr over FY17-20E


EBITDA trend over FY17-20E


EBITDA Margin (%)


PCG RESEARCH


Income Statement


Net Revenue 169 203 201 198 237 291

Other Income 3 2 2 2 3 4

Total Income 172 205 203 200 240 295

Growth (%) -3.1 19.9 -1.0 -1.5 19.7 22.8

Operating Expenses 165 192 188 186 216 261

EBITDA 7 14 15 14 24 33

Growth (%) -60.6 173.2 13.4 -7.1 76.2 43.2

EBITDA Margin (%) 2.4 5.5 6.3 6.0 8.8 10.2

Depreciation 3 3 3 4 4 4

EBIT 4 11 12 10 20 29

Interest expenses 1 0 2 1 1 1

PBT 3 10 10 9 17 26

Tax 1 2 0 3 3 5

RPAT 2 9 10 6 17 25

Growth (%) -76.7 384.6 13.6 -37.8 144.5 49.0

EPS 0.7 3.2 3.6 2.3 6.2 8.9 Source: Company, HDFC sec Research

Balance Sheet

FY15 FY16 FY17 FY18E FY19E FY20E

SOURCE OF FUNDS

Share Capital 27.6 27.6 27.6 27.6 27.6 27.6

Reserves 87 96 107 113 126 152

Shareholders' Funds 114 124 134 140 154 180

Long Term Debt 1 1 1 5 7 10

Net Deferred Taxes 0 3 2 3 6 9

Long Term Provisions & Others 2 1 1 4 9 12

Total Source of Funds 117 129 138 153 174 211

APPLICATION OF FUNDS

Net Block (incl CWIP) 30 27 26 32 36 47

Deferred Tax Assets (net) 0 3 4 4 4 4

Long Term Loans & Advances 7 9 10 13 18 22

Total Non Current Assets 37 39 39 49 58 73

Current Investments 0 0 0 0 0 0

Inventories 28 28 33 31 38 42

Trade Receivables 57 76 91 90 106 120

Short term Loans & Advances 2 1 1 1 2 5

Cash & Equivalents 27 24 12 32 38 57

Other Current Assets 2 3 3 6 8 12

Total Current Assets 116 131 140 159 192 235

Short-Term Borrowings 0 0 0 11 21 13

Trade Payables 24 26 35 35 41 51

Other Current Liab & Provisions 11 10 6 7 9 12

Short-Term Provisions 1 2 2 4 6 8

Total Current Liabilities 36 38 43 57 77 83

Net Current Assets 80 94 97 102 115 151

Total Application of Funds 117 129 138 153 175 211 Source: Company, HDFC sec Research

PCG RESEARCH


Cash Flow Statement


Reported PBT 3 10 10 10 19 28

Non-operating & EO items -3 -2 -2 -2 -3 -4

Interest Expenses 1 0 2 1 1 1

Depreciation 3 3 3 4 4 4

Working Capital Change 0 -17 -15 15 -7 -14

Tax Paid -1 -2 0 -3 -3 -5

OPERATING CASH FLOW ( a ) 3 -8 -2 23 10 11

Capex -1 1 -2 -10 -8 -15

Free Cash Flow 2 -6 -4 13 2 -8

Investments -1 -5 -1 -3 -5 -4

Non-operating income 3 2 2 2 3 4

INVESTING CASH FLOW ( b ) 1 -2 -1 -11 -10 -15

Debt Issuance / (Repaid) 0 2 -1 8 10 9

Interest Expenses -1 0 -2 -1 -1 -1

FCFE 1 -5 -6 21 11 0

Share Capital Issuance 0 0 0 0 0 0

Dividend 0 0 0 0 -2 -4

FINANCING CASH FLOW ( c ) -1 2 -2 7 7 4

NET CASH FLOW (a+b+c) 3 -8 -6 20 6 0 Source: Company, HDFC sec Research

Key Ratios


EBITDA Margin 2.4 5.5 6.3 6.0 8.8 10.2

EBIT Margin 2.4 5.3 5.7 5.2 8.4 10.0

APAT Margin 1.1 4.3 5.0 3.1 6.4 7.8

RoE 1.6 7.4 7.8 4.5 11.6 14.7

RoCE 3.4 8.4 8.4 6.7 11.3 13.8

Solvency Ratio

Net Debt/EBITDA (x) -6.3 -2.0 -0.9 -1.3 -0.5 -1.1

D/E 0.0 0.0 0.0 0.1 0.2 0.1

Net D/E -0.2 -0.2 -0.1 -0.1 -0.1 -0.2

PER SHARE DATA

EPS 0.7 3.2 3.6 2.3 6.2 8.9

CEPS 1.6 4.2 4.7 3.6 7.5 10.5

BV 41 45 49 51 56 65

Dividend 0.0 0.0 0.0 0.0 0.5 1.0

Turnover Ratios (days)

Debtor days 123 136 166 165 163 151

Inventory days 69 51 55 57 59 53

Creditors days 65 59 79 82 83 88

VALUATION

P/E 288.5 59.5 52.4 84.2 30.8 21.4

P/BV 4.6 4.2 3.9 3.7 3.4 2.9

EV/EBITDA 122.6 44.9 39.6 42.6 24.2 16.9

EV / Revenues 3.0 2.5 2.5 2.5 2.1 1.7

Dividend Yield (%) 0.0 0.0 0.0 0.0 0.3 0.5

Dividend Payout 0.0 0.0 0.0 0.0 8.1 11.3 Source: Company, HDFC sec Research

PCG RESEARCH


Price Chart

Rating Definition:

Buy: Stock is expected to gain by 10% or more in the next 1 Year. Sell: Stock is expected to decline by 10% or more in the next 1 Year.

PCG RESEARCH


Rating Chart

R E T U R N

HIGH

MEDIUM

LOW

LOW MEDIUM HIGH

RISK

Ratings Explanation:

RATING Risk - Return BEAR CASE BASE CASE BULL CASE

BLUE LOW RISK - LOW RETURN STOCKS

IF RISKS MANIFEST PRICE CAN FALL 20% OR MORE

IF RISKS MANIFEST PRICE CAN FALL 15% & IF INVESTMENT RATIONALE FRUCTFIES PRICE CAN RISE BY 15%

IF INVESTMENT RATIONALE FRUCTFIES PRICE CAN RISE BY 20% OR MORE

YELLOW MEDIUM RISK - HIGH RETURN STOCKS




RED HIGH RISK - HIGH RETURN STOCKS




PCG RESEARCH


Disclosure: I, Kushal Rughani, MBA, author and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. HSL has no material adverse disciplinary history as on the date of publication of this report. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. Research Analyst or his relative or HDFC Securities Ltd. does not have any financial interest in the subject company. Also Research Analyst or his relative or HDFC Securities Ltd. or its Associate may have beneficial ownership of 1% or more in the subject company at the end of the month immediately preceding the date of publication of the Research Report. Further Research Analyst or his relative or HDFC Securities Ltd. or its associate does not have any material conflict of interest. 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PCG RESEARCH Agriculture Sector Picks Jan 30, 2018 PCG... · seen success for example Gujarat Green Revolution Company (GGRC) and Andhra Pradesh Micro Irrigation Project (APMIP).

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