⚡ At a Glance

Oswal Pumps, founded in 2003, is a vertically integrated manufacturer of solar pumps, motors, and modules. With 87% revenue from the PM Kusum scheme, and a spicy 70x P/E, the company rides high on government subsidies, not consumer demand. Is this solar saviour or a state-sponsored sunset?

1. 🏭 What Does Oswal Pumps Do?

• Oswal Pumps Ltd (OPL) is a solar pump manufacturing company that also makes electric motors and solar modules.
• It serves agriculture, residential, and industrial sectors but survives thanks to the PM Kusum scheme, through which it sells the bulk of its products.
• It’s one of the few companies in India that has integrated manufacturing across:
  • Solar + electric submersible & monoblock pumps
  • Induction motors (up to 150 HP)
  • Solar panels (570 MW capacity currently)

💡 Think of them as the Amul of pumps… if Amul only sold to government dairy boards.

2. 🌞 The PM Kusum Addiction: Strength or Single Point of Failure?

🔌 Revenue Source (FY24):

• Oswal claims to have supplied 2.3 lakh solar pumps under PM Kusum – 38% of India’s installed base.
• But here’s the kicker: If the government stops, Oswal stops. This isn’t diversification — it’s a full-blown dependency disorder.

📉 Imagine 87% of Zomato’s orders came only from one society. That’s Oswal right now.

3. 💸 Product & Profit Mix: Pumps, Motors, Modules & Margin

🧪 FY24 Product Revenue Split:

✅ Translation: It’s a solar pump company, not a diversified pump giant.

4. 📍 Where Do These Pumps Go?

🌍 Geographical Revenue (Dec 2024):

⚠️ 79% of revenue comes from just 2 states. So even regionally, Oswal’s growth is less “India-wide boom” and more “Maharashtra + Haryana = daddy”.

5. 🧾 Financials: Growth Rocket or ROCE Mirage?

📊 Key Financials:

📉 Debtor days at 115 = the government delays payment like it’s UPI pe 6 baje ke baad.

📉 Cash flow collapsed in FY24 despite profit jump = earnings look good on paper, not in bank.

6. 📦 Distribution, Order Book & Expansion Plans

🛍 Distribution:

• 925 Distributors (up from 473 in FY22)
• 248 Exclusive “Oswal Shoppes”
• Exports to 22 countries, incl. Egypt, Australia, UAE

📝 Order Book (April 2025):

• Ongoing projects across UP, Himachal, Ladakh, Kargil, Karnataka, Haryana
• Current capacity can fulfill 11,699 solar pumps with more orders pending

⚙️ Expansion from IPO Money:

• ₹897 Cr fresh issue used for:
  • 1,500 MW solar module capacity expansion (₹153.7 Cr)
  • Investment in subsidiary
  • Loan repayments & General expenses

🛠️ This capacity ramp-up is ambitious, but again — only useful if PM Kusum Phase-4 arrives on time.

7. 📈 Valuation: Pumped Too Hard?

😳 70x P/E for a subsidy-heavy B2G biz = borderline unhinged.

💬 Meanwhile, peers like Shakti Pumps trade at ~32x, and they serve more private demand.

🚨 Valuation pump ho gaya, ab demand pump hoga ya nahi — that’s the gamble.

8. 🧠 Final Verdict: Desh Bhakti or Debt Bhakti?

Oswal Pumps is a great company… if you’re the Ministry of New and Renewable Energy. For the rest of us?

Here’s the reality:

✅ Profitable & vertically integrated
✅ Market leader in solar pump installation
✅ Strong ROCE/ROE metrics

BUT…

❌ Ridiculously dependent on one government scheme
❌ Revenue concentrated in 2 states & 10 customers
❌ Valuation more inflated than a minister’s election promises

TL;DR for the Lazy Investor:

• Business Model: PM-Kusum B2G machine
• Financials: Profitable, but cash flow weak
• Risk: Policy change = pump down
• IPO Valuation: Juiced up like a sugarcane stall
• EduVerdict: Enter at your own risk, and keep one eye on Union Budget 2026.

✍️ Written by Prashant | 📅 June 15, 2025

Tags: Oswal Pumps SME IPO, PM Kusum, Solar Stocks India, SME Listing, Subsidy-Driven IPOs, EduInvesting SME