Stocks in Your Budget 2021 With Anil Singhvi – Mahindra EPC: In today’s edition of affordable Budget 2021 stock picks with Zee Business Managing Editor Anil Singhvi, Senior Research Analyst Varun Dubey picked an agriculture-based stock. The name of this stock is Mahindra EPC and it is expected to do well till the budget is presented on 1 February and even after it. Mahindra EPC ought to be one of the top stocks in your Budget 2021 portfolio. Know what stands out for Mahindra EPC counter.  

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Mahindra EPC has a focus on micro and drip irrigation and pumps business. Mahindra Group acquired this company in 2011. It has delivered growth since then. The government's focus on agriculture sector is an important trigger for this stock, he said. The government has been working on increasing the rural incomes and any scheme announced for farmers is likely to benefit Mahindra EPC. 

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Fundamentals of Mahindra EPC

Segment    FY'17   FY'18    FY'19     FY'20

ROCE             6.9       6.3       11.3       18

RONW           7.3       3.5       7.6         13.6

P/BV               3.7       3.6       3.3         2.9

EBITDA           39        41        24.6       13.6

Mahindra EPC was acquired to leverage on the reach of Mahindra Finance and tractor companies. If one looks at the FY20 results, the turnaround in this company will be visible. Mahindra EPC sales have grown at a CAGR of 12 per cent while the profits have grown at 34 per cent over the last three years.    

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Mahindra EPC Stock Valuations   

The price-to-book value of Mahindra EPC has come down from 3 to 2.5 now. Meanwhile, the price-to-equity ratio has come down below 20 now from a highs of 40-50, he said. The valuations are attractive with strong parentage and outlook, he said.  

Anil Singhvi’s View on Mahindra EPC   

The Market Guru said that Mahindra EPC is an excellent company with the right parentage and business. They have a clean record in terms of business practices. They have always been investor friendly, Singhvi said. The growth outlook is good with company and government focus on agriculture sector. The competition is not much. Mahindra EPC valuations are very attractive. It is almost debt free. Mahindra EPC stock should be in your portfolio, SInghvi concluded.