Mahindra EPC Irrigation Limited

Ramesh Ramachandran

MANAGING DIRECTOR, MAHINDRA EPC IRRIGATION LIMITED

65%

n India: We all know that Agriculture continues to be the backbone of our nation, engaging nearly 65% of India’s population and contributing to around 18% of India’s Gross Value Added (GVA). Accordin

18%

the backbone of our nation, engaging nearly 65% of India’s population and contributing to around 18% of India’s Gross Value Added (GVA). According to the Ministry of Statistics and Programme Impleme

Rs.23.91 lakh crore

and Programme Implementation, the real GVA of the Agriculture and allied sector is expected to be Rs.23.91 lakh crores in FY25 versus Rs.23.4 lakh crores in FY24, which is a growth of 3.8% on a very large base. In

Rs.23.4 lakh crore

al GVA of the Agriculture and allied sector is expected to be Rs.23.91 lakh crores in FY25 versus Rs.23.4 lakh crores in FY24, which is a growth of 3.8% on a very large base. India is also firmly placed as a net

3.8%

ected to be Rs.23.91 lakh crores in FY25 versus Rs.23.4 lakh crores in FY24, which is a growth of 3.8% on a very large base. India is also firmly placed as a net exporter of Agri-products, with export

48 billion

base. India is also firmly placed as a net exporter of Agri-products, with exports ranging from $48 billion to $53 billion annually. However, with 18% of the world’s population, India has access only to 4%

53 billion

also firmly placed as a net exporter of Agri-products, with exports ranging from $48 billion to $53 billion annually. However, with 18% of the world’s population, India has access only to 4% of global fres

4%

on to $53 billion annually. However, with 18% of the world’s population, India has access only to 4% of global freshwater resources. Agriculture alone consumes over 80% of India’s freshwater withd

80%

tion, India has access only to 4% of global freshwater resources. Agriculture alone consumes over 80% of India’s freshwater withdrawals. As per current estimates, per capita water availability in Ind

rs,

rt the actual rates of growth and the required rates of growth in the secondary and tertiary sectors, a larger share of water available in India needs to be provided to these sectors. But since there

20%

n benefits the farmer by saving costs such as fertilizer, labor, electricity, all in the range of 20% to 30% savings of cost while improving the productivity by 30% to 40%. With this background, as w

30%

its the farmer by saving costs such as fertilizer, labor, electricity, all in the range of 20% to 30% savings of cost while improving the productivity by 30% to 40%. With this background, as we look

“Given all this, the government of India has therefore set an ambitious target of 2 million hectares annually, aiming to cover 10 million hectares over the next five years.”

“The commitment of the central government is evident from the fact that in the current financial year, FY26, for the first time in history, the central government has issued 43% of its annual fund allocations for the states as mother sanctions, and that too just by the month of May 2025.”

“Let us now talk about the “First Half of FY26”: This year, as we know, is a year of La Nina effect, and hence the southwest monsoon we all saw, there was an above-normal rainfall, 107.9% of the long-term average.”

“While this means groundwater availability will be better in the longer term and a better rabi season for FY26, it has, however, posed challenges for the micro irrigation business in H1 FY26.”

“The receivables in H1FY26 were higher versus FY25 by about Rs.9.4 crores.”

“However, it is noteworthy to mention that the receivables in terms of days of sales has gone down by about six days versus FY25.”

“The only caveat we would mention here is that geopolitical events would obviously change these things going forward.”

“The Hon’ble Prime Minister is pushing for 1 crore hectares to be covered in the next five years, which translates to an average of 2 million hectares a year versus about 1 million hectares in the FY25.”

“The effect of all of this will be realized in improving area under micro irrigation in the future, and also including pressurized piping systems in the detailed project reports for major irrigation projects.”

“Example, during FY16 to FY20, the industry did register a 20% CAGR.”

Rajan Shah

10

Aditya Shah

9

Moderator

6

Agastya Dave

4

Ramesh Ramachandran

2

India

1

Let me just list out a few of them

1

To summarize and conclude

1

India

We see only about 18% penetration of the total identified potential for micro irrigation of about 72 million hectares. This estimated potential of 72 million hectares is based mostly on groundwater availability and some portion of surface water. If, however, most of the surface water available in India is also assumed to be available for Agriculture, then the potential for micro irrigation doubles from 72 million hectares to about 144 million hectares. Given all this, the government of India has therefore set an ambitious target of 2 million hectares annually, aiming to cover 10 million hectares over the next five years. The commitment of the central government is evident from the fact that in the current financial year, FY26, for the first time in history, the central government has issued 43% of its annual fund allocations for the states as mother sanctions, and that too just by the month of May 2025. However, for the micro irrigation industry to fully benefit from this, it requires

Let me just list out a few of them

A. The Hon’ble Prime Minister is pushing for 1 crore hectares to be covered in the next five years, which translates to an average of 2 million hectares a year versus about 1 million hectares in the FY25. B. Key states such as Andhra Pradesh have requested additional assistance to cover larger areas under micro irrigation over the next four years. C. Several current active states such as AP, Telangana, Gujarat, Tamil Nadu are active, giving a positive push to the industry. D. The recent GST changes, i.e. the reduction of GST on micro irrigation from 12% to 5%, is likely to have a positive impact on demand in the medium-to-long-term. E. Finally, multiple ministries are working actively on laying a roadmap and looking at convergence of schemes and policies. For instance, groundwater use efficiency through Atal Bhujal Yojana, the modernizing of the command area development and water management for storage, recharge, and improved water use efficiency. The effect of all of this will be real

To summarize and conclude

We feel that the micro irrigation industry will, like any other industry, go through some ups and some downs, but the long-term outlook is very compelling, and in the medium-term, we as Mahindra EPC are well-placed to take advantage of both our unique capabilities as well as the emerging opportunities in order to deliver above-industry performance. That brings me to the end of my session. Thank you very much for listening patiently. I now open up the session to “Questions and Answers.”