One of the small-cap stocks engaged in offering advanced water pumping solutions for applications such as irrigation, horticulture, domestic water supply, and commercial and industrial use. Recently, the stock hit upper circuits of 5% after securing an order from Maharashtra State Electricity Distribution Company Limited to supply 25,000 off-grid DC solar photovoltaic water pumping systems.
Stock Price Movement:
With a market capitalization of Rs. 9,366.42 crores, the shares of Shakti Pumps (India) Limited’s stock surged by 5 percent, reaching an upper circuit of Rs. 819.20 per share on Wednesday, up from its previous closing price of Rs. 780.20 per share. Since then, the stock has retreated and closed at Rs. 804.30 per equity share.
What Happened
Shakti Pumps (India) Limited has received a Letter of Empanelment from Maharashtra State Electricity Distribution Company Limited for supplying 25,000 off-grid DC solar photovoltaic water pumping systems under the Magel Tyala Saur Krushi Pump Scheme.
The total value of the order is approximately Rs. 754.30 crores, with execution to be completed within 60 days from the work order issuance.
Order book and capacity expansion:
As of September 2024, the order book stood at Rs. 1,800 crores. The current capacity can support revenues of Rs. 2,500 crores, with ongoing expansion plans. New machines will be added in the next three months, boosting capacity and potentially driving revenues to Rs. 3,000–Rs. 3,200 crores.
New developments and strategic initiatives:
Shakti Pumps (India) Limited is strategically expanding into the retail sector and focusing on growth in exports and the solar market without relying on subsidies. With a large potential for 4.5 crore grid-connected pump connections in India, the company is also venturing into the EV business, developing EV motors for a leadership position in the Indian market.
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Margins and Cost Structure:
Shakti Pumps (India) Limited’s management is confident in maintaining stable margins, supported by steady raw material prices (copper, stainless steel, solar panels). The company’s gross margin is expected to remain in the 35%-40% range, with EBITDA margins guided at 16%-18%, according to board decisions.
Future Outlook:
Shakti Pumps (India) Limited is optimistic about future growth, focusing on executing its existing order book and expanding capacity to meet growing demand. The company expects Rs. 500 crores in revenue for the next quarter, with potential for higher performance based on trends.
Recent quarter results and ratios:
Shakti Pumps (India) Limited’s revenue has increased from Rs. 153 crore in Q2 FY24 to Rs. 635 crore in Q2 FY25, which has grown by 315.03 percent YOY. The net profit of Shakti Pumps (India) Limited has also grown by 1583.33 percent, from Rs. 6 crore in Q2 FY24 to Rs. 101 crore in Q2 FY25.
Shakti Pumps (India) Limited’s revenue and net profit have grown at a CAGR of 20.31 percent and 25.84%, respectively, over the last five years.
In terms of return ratios, the company’s ROCE and ROE should be 31.4% and 24.2%, respectively. The debt-to-equity ratio of the company is to be 0.17, which shows the company is almost debt-free. Shakti Pumps (India) Limited’s EPS is to be Rs. 166.
About the Company
Shakti Pumps (India) Limited stands as a leading manufacturer of diverse pump systems and motors in India. The company excels in producing submersible, solar, centrifugal, and specialized pumps for various applications. Its extensive product line serves crucial sectors like agriculture, irrigation, and industrial processes.
Shakti Pumps (India) Limited has built a strong global presence, delivering water-pumping solutions to more than 100 countries worldwide. The company produces power irrigation systems, enhances water supply in high-rise buildings, and supports waste treatment facilities. Shakti Pumps meets diverse needs through offerings like pressure boosters, wastewater pumps, and solar-powered systems.
Written By – Nikhil Naik
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