At a Glance
Oswal Pumps Ltd, a solar pump and motor manufacturer that recently debuted on BSE, is now riding high with a jaw-dropping 77% ROE, 97% revenue growth, and a P/E of 77. But with receivables ballooning and cash flow choking, the real question is: Is this solar stock actually pumping… or is it running dry?
1. 🪜 Introduction with Hook
Every desi investor has that one uncle who says, “Beta, solar mein paisa hai.”
Well, Oswal Pumps is the embodiment of that optimism. It went from an unlisted manufacturer to a BSE mainboard darling in just a few weeks.
But now, it’s trading at ₹7,676 Cr market cap, P/E 77, ROE 77%, and ROCE 73.5% — sounds like an IIT topper who also plays IPL. Too good to be true?
Let’s break the motor down. 🪛
2. ⚙️ WTF Do They Even Do? (Business Model)
Oswal Pumps is an end-to-end manufacturer and distributor of:
- 💧 Submersible & Monoblock Pumps
- ⚡ Solar-Powered Pumps (including PM-KUSUM scheme installations)
- ⚙️ Electric Motors (induction + submersible)
- ☀️ Solar Modules + Turnkey Solar Pumping Solutions
Basically, it’s not just a pump maker — it’s a vertically integrated beast that manufactures almost everything in-house under the ‘Oswal’ brand.
And now it’s capitalising big on government-backed solar irrigation push under PM-KUSUM.
3. 📈 Financials – Profit, Margins, ROE
FY22 ➡ FY24 Explosion:
| Metric | FY22 | FY23 | FY24 | 3-Year CAGR |
|---|---|---|---|---|
| Revenue (₹ Cr) | 360 | 385 | 759 | 44% approx |
| Net Profit (₹ Cr) | 17 | 34 | 98 | 146% CAGR |
| OPM (%) | 11% | 15% | 20% | 😳 Up 900 bps |
| ROE (%) | – | 38% | 77% | 🚀 |
| ROCE (%) | – | 38% | 73.5% | 🔥 |
📌 That OPM jump from 11% → 20%? Chef’s kiss.
📌 Net profit up nearly 6x in 2 years? Straight outta IPO dreams.
But wait… where’s the catch?
4. 💸 Valuation – Is It Cheap, Meh, or Crack?
P/E: 77x
EV/EBITDA (FY24): Est. 45x+
Market Cap / Sales (FY24): ~10x
Price / Book: Likely above 20x (BV data missing)
For context, Shakti Pumps — its listed peer — is trading at 28x P/E with similar revenue, better brand recall, and lower receivables risk.
So yeah, this ain’t cheap.
It’s more like organic, gluten-free, almond-flour naan at a Delhi hipster café — hyped AF.
5. 🔥 What’s Cooking – News, Triggers, Drama
- 📈 Listed on BSE on 20 June 2025
- 🤝 Empanelled vendor in PM-KUSUM = direct tailwinds from govt subsidies
- 🛠️ Vertically integrated model = cost control + pricing power
- 📜 High promoter holding (75.67%), but IPO investors better pray FII/PE dumping doesn’t begin soon
Oh and let’s not forget — 3.4 lakh shareholders within days of listing. Madness.
6. 🧾 Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY22 | FY23 | FY24 |
|---|---|---|---|
| Total Debt (₹ Cr) | 90 | 62 | 78 |
| Reserves (₹ Cr) | 38 | 73 | 173 |
| D/E Ratio | 2.37 | 0.85 | 0.45 |
🧠 From 2.37x to 0.45x debt-equity? Solid deleveraging.
Now they have room to borrow again… which might just happen if receivables stay ugly.
7. 💵 Cash Flow – Sab Number Game Hai
| Cash Flow Item | FY24 (₹ Cr) |
|---|---|
| CFO (Ops) | 17 |
| CFI (Investing) | -24 |
| CFF (Financing) | 3 |
| Net Cash Flow | -3 |
Despite 6x profit jump, operating cash flow FELL. That’s because:
🧾 Debtor Days = 115
⛔ Cash Conversion Cycle = 157 DAYS (up from 80!)
This business is working for free for 5 months before getting paid.
8. 📊 Ratios – Sexy or Stressy?
| Metric | FY24 |
|---|---|
| ROE | 77.0% |
| ROCE | 73.5% |
| OPM | 20.1% |
| EPS | ₹166.9 |
| Debtor Days | 115 |
| CCC | 157 days |
🧠 ROE: Sexy.
🧠 Receivables: Stressy.
🧠 EPS growth: Sexy.
🧠 Cash flow conversion: Stressy.
Basically, bipolar.
9. 📉 P&L Breakdown – Show Me the Money
| FY24 (₹ Cr) | Amount |
|---|---|
| Revenue | 759 |
| EBITDA | 153 |
| Depreciation | 9 |
| Interest | 14 |
| PBT | 130 |
| Tax (25%) | 32 |
| Net Profit | 98 |
EBITDA margin ~20%
Net Profit Margin ~13%
Pretty clean. No shady “Other Income” tricks here. Just clean pump margins.
10. 🧼 Peer Comparison – Who Else in the Game?
| Company | ROE (%) | P/E | OPM (%) | Rev (Cr) | PAT (Cr) |
|---|---|---|---|---|---|
| Oswal Pumps | 77.0 | 77 | 20.1 | 759 | 98 |
| Shakti Pumps | 42.6 | 28 | 23.9 | 2,516 | 408 |
| Ingersoll Rand | 45.0 | 45 | 25.5 | 1,336 | 267 |
| KSB | 17.7 | 57 | 13.3 | 2,584 | 254 |
✅ Best ROE
✅ Fastest PAT growth
❌ Worst cash flow + highest receivables
❌ Highest P/E
11. 📦 Misc – Promoters, Shareholding, and IPO Madness
- 🏢 Promoters: 75.67%
- 🧑💼 KMPs not clearly disclosed yet post-IPO
- 🧑🤝🧑 Public Holding: 10.92%
- 👀 FIIs: 4.17%, DIIs: 9.23% – unusual for a newly listed SME/mainboard cross-over
No dividend, no buyback. Just pure reinvestment so far.
12. 🎯 Fair Value (FV) Range
Let’s assume FY25 Net Profit = ₹130 Cr (modest 30% growth)
At 30x P/E = ₹3,900 Cr Market Cap
At 40x P/E = ₹5,200 Cr Market Cap
➡ Fair Value Range = ₹343 to ₹457 per share
(Current Price = ₹674 = way above even optimistic FV)
So, Oswal Pumps is pricing in 2-3 years of perfect execution already.
13. 🧠 EduInvesting Verdict™
“Itna ROE toh Ramdev baba ki dawaiyon mein bhi nahi milta.”
Oswal Pumps is clearly a high-growth, high-ROE story. But it’s also got:
- 🚩 Extremely rich valuation
- 🚩 Bloated receivables
- 🚩 Cash flow conversion issue
The hype is real. But so is the risk.
Verdict:
🧃 Solar Pumps may quench India’s thirst… but don’t let FOMO dry up your wallet.
✍️ Written by Prashant | 📅 July 2, 2025
Tags: Oswal Pumps, Solar Pumps, IPO Analysis, PM-KUSUM, BSE Stocks, High ROE, EduInvesting
