01 — At a Glance
The Pump That’s Pumping Capital. Into Itself.
- 52-Week High / Low₹889 / ₹283
- Q3 FY26 Revenue₹501 Cr
- Q3 FY26 PAT₹92 Cr
- Q3 EPS₹8.03
- Annualised EPS (Q3×4)₹32.12
- Book Value₹131
- Price to Book2.34x
- Debt / Equity0.08x
- Working Capital Days221 days
- IPO Listing Price₹216
The Plot Twist: Oswal Pumps delivered ₹501 crore revenue in Q3 (+32% YoY), 78% ROCE, and a 25.4% operating margin. Then management went on the concall and basically said: “Your tax rupees are stuck in Maharashtra’s treasury because their budget didn’t arrive. But yes, business is great.” Stock returned -40% in three months. Logic 0, markets 1. You’ve got to respect the honesty.
02 — Introduction
The Government’s Pump. Literally. And Figuratively.
Oswal Pumps is what happens when a family business from Haryana decides to become India’s solar pump monopolist. Since 2003 — the year Facebook was founded and investors genuinely believed internet companies didn’t need profits — the Gupta family has been building pumps for farmers. Quiet, steady, boring. Then came PM-KUSUM.
PM-KUSUM (Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabhiyaan) is the Indian government’s ₹35,000-crore mission to replace grid electricity with solar pumps across rural India. By definition, this is the biggest agri-infrastructure scheme since the Green Revolution. And Oswal isn’t just playing in it — they’re winning it. Out of ~10 lakh solar pumps installed under PM-KUSUM to date, Oswal has supplied ~28% directly and indirectly. That’s market dominance that makes Castrol look ordinary.
But here’s the joke: selling to the government is sexy in theory. In practice, it’s like dating someone’s parents — guaranteed approval, zero spontaneity, and perpetual awkwardness about money. Receivables stretch from 30 days to 160 days overnight. Working capital balloons to 221 days. Cash flow? What cash flow? The IPO proceeds funded growth. The growth funded working capital. Working capital funded… more waiting.
Q3 FY26 delivered 9M revenue of ₹1,554 crore (+46% YoY). The order book sits at ₹24,500+ pumps in pipeline. Management expects PM-KUSUM 2.0 to arrive with “great pomp and a big bang” by March end. And yet, the stock somehow returned -59.8% over six months from its IPO peak. Because even with 78% ROCE, if you’re funding receivables from equity, the math starts to hurt.
Concall Insight (Feb 2026): “Maharashtra receivables are from government and government-backed entities and remain fully secure,” said management. Translation: Yes, your money is stuck. But it’ll come. Eventually. Maybe. Meanwhile, they’re exploring “invoice discounting” to fund their own working capital. That’s peak startup energy in a ₹3,524 crore company.
03 — Business Model: WTF Do They Even Do?
We Pump Your Water. You Wait For Payment. Repeat.
The business is architecturally simple: take imported base metal, turn it into solar pumps, install them on farmers’ fields under government schemes, collect payment sometime in the next 6 months, repeat. Oswal manufactures submersible pumps (1–25 HP), monoblock pumps (3–20 HP), electric motors (0.5–150 HP), and now — because backward integration is life — solar modules. Three manufacturing plants: Karnal (Haryana), plus support units. Capacity: 1,160 MT stainless steel pumps annually. 570 MW of solar module manufacturing. Stated market share under PM-KUSUM: ~38% installed base.
Revenue split is lopsided: 87% comes from PM-KUSUM (direct and indirect). The remaining 13% is exports (~2,000 units) and private sales. So when PM-KUSUM sneezes, Oswal gets pneumonia. When PM-KUSUM 2.0 launches — expected by March 31 end or “early April” — Oswal either moonshots or… well, moonshots. There’s no Plan B. Management admitted they’re building it now: “PM Surya Ghar,” exports, private distribution. But 87% concentration says these are safety railings on a ship that’s still sailing full-speed.
Operating model: Get order from state nodal agencies. Supply pumps. Install pumps. Collect payment 160 days later. Meanwhile, pay suppliers in 36 days. Working capital cycle: 177 days (Dec 2025) vs 157 days (Sep 2025). That 20-day deterioration? Maharashtra delays. The CFO’s exact quote: “receivables definitely related to the Maharashtra State Government’s Magel Tyala scheme” and “there was no money in the treasury, which they have outsourced.”
The upside? Distribution of 925+ distributors as of Dec 2024 (up from 574 in Mar 2023). Retail network of 248 “Oswal Shoppes.” Exports to 22 countries. Backward integration ongoing. The downside? You can’t scale faster than your government’s treasury moves.
Market Share~38%PM-KUSUM Installed
Distributors925+Across India
Capex Deployed₹897 CrIPO Proceeds
Receivable Days157 days60 days normal
The Backward Integration Flex: Oswal started manufacturing solar modules in Jan 2024 through wholly-owned subsidiary Oswal Solar Structure Pvt Ltd. 570 MW capacity. Expanding to 1,500 MW by FY27. Why? To “strengthen cost competitiveness and long-term margin structure.” Translation: stop relying on external suppliers who ask for money on time. Government doesn’t. So we’ll vertically integrate instead. Maximum hustle energy.
💬 Drop a comment: If you were a farmer, would you wait 160 days for government payment, or would you take a bank loan at 12% and call it a day? What’s the hidden leverage Oswal is bearing here?
04 — Financials Overview
Q3 FY26: The Numbers (And The Plot Twists)
Result type: Quarterly Results (Q3 Dec 2025) | Q3 EPS: ₹8.03 | Annualised EPS (Q3×4): ₹32.12 | 9M FY26 EPS: ₹24.80 (₹283.7 Cr PAT)
| Metric (₹ Cr) |
Q3 FY26
Dec 2025 |
Q3 FY25
Dec 2024 |
Q2 FY26
Sep 2025 |
YoY % |
QoQ % |
| Revenue | 501 | 380 | 540 | +32.0% | -7.2% |
| Operating Profit (EBITDA) | 127 | 118 | 128 | +7.6% | -0.8% |
| OPM % | 25.4% | 31% | 24% | -560 bps | +140 bps |
| PAT | 92 | 80 | 98 | +15.0% | -6.1% |
| EPS (₹) | 8.03 | 8.08 | 8.55 | -0.6% | -6.1% |
The Margin Squeeze Story: Q3 operating margin was 25.4%, down 560 bps YoY from 31% in Q3 FY25. Why? Management cited: (a) “13–14% tender pricing decline,” (b) “metal prices running at all-time high” (copper, stainless steel), (c) inability to pass costs through fixed-price government tenders. Yet they “neutralized 15–16% headwinds to just 1–1.25% margin impact” via value engineering, supplier consolidation, and backward integration. Honestly? That’s fortress-level operational discipline. The stock doesn’t care. It’s down 40% anyway.
The Working Capital Elephant: 9M FY26 operating cash flow was likely negative (full-year FY25 OCF: -₹151 Cr). Why? Receivable days went from 138 (Sep) to 157 (Dec), adding ₹19 days of capital lockup. CCC expanded to 177 days. This is what happens when you’re executing 50% revenue growth but 90% of customers are government agencies that move at 160-day cadence. You’re self-funding growth with equity, not cash.
05 — Valuation: What’s Fair When Growth Eats Cash?
Fair Value Range — If Receivables Normalize
Method 1: P/E Based
Annualised EPS (Q3×4) = ₹32.12. Industry median P/E for capital goods ~35.6x. Oswal at 10.1x trades at 71% discount to peers. Justified premium for 78% ROCE and 50% growth: 8x–12x P/E (25th to 75th percentile of growth + ROCE comps). Fair range: 8x–12x × ₹32.12 EPS.
Range: ₹257 – ₹385
Method 2: EV/EBITDA Based
9M FY26 EBITDA run-rate: ~₹440 Cr (9M EBITDA ₹395.8 Cr, adjusted for seasonal Q4 strength). Current EV = ₹3,196 Cr. EV/EBITDA = 7.3x. Capital-intensive growth businesses trade 8x–14x. Given working capital drain, moderate this to 8x–11x.
EBITDA range (8x–11x): ₹3,520 Cr – ₹4,840 Cr → Less net debt ₹188 Cr → Equity EV:
Range: ₹290 – ₹408
Method 3: DCF (With Working Capital Haircut)
Base FCF: -₹151 Cr (FY25 OCF was negative due to WC build). Normalize to: Operating CF ₹400 Cr (assuming WC normalizes) minus capex ₹200 Cr = ₹200 Cr FCF. Growth: 35% CAGR for 3 years, then 15% for 2 years, then 5% terminal. WACC: 12%.
→ PV of 5-year FCFs at 12%: ~₹800 Cr (depressed by near-term WC drain)
→ Terminal Value (5% growth / 7% cap rate): ~₹4,286 Cr
→ Total EV: ~₹5,086 Cr (net of ₹188 Cr net debt)
Range: ₹350 – ₹420
Fair Min: ₹250
CMP: ₹309 | IPO Price: ₹216
Fair Max: ₹410
CMP ₹309
IPO Price ₹216
⚠️ EduInvesting Fair Value Range: ₹250 – ₹410. CMP ₹309 sits comfortably in the range. However, this assumes (a) PM-KUSUM 2.0 launches by March-end with substantial order flow, (b) working capital normalizes to <150 days, and (c) receivables from Maharashtra resume on schedule. If PM-KUSUM 2.0 is delayed beyond Q1 FY27, or receivables persist >180 days, reassess downward. This fair value range is for educational purposes only and is not investment advice.
06 — What’s Cooking: News, Triggers, Drama
The PM-KUSUM 2.0 Countdown. And Maharashtra’s Treasury Drama.
