At a Glance
Shakti Pumps (India) Ltd just released its Q1 FY26 results, and the numbers are a mix of high-voltage performance and debt alarms. Net profit rose 4.5% YoY to ₹97 crore, revenue grew 9.7% to ₹622 crore, and operating margins stayed healthy at 23%. The company flaunts a stellar ROE of 42.6% and ROCE of 55.3% – basically the Elon Musk of Indian pump makers. But, the board also approved a ₹3,000 crore borrowing, which could either turbocharge growth or flood the balance sheet.
Introduction
Shakti Pumps is no ordinary pump maker – it’s the kingpin of solar pumping solutions, irrigation systems, and submersible motors in India. With products spanning everything from domestic water supply to industrial pumps, it has become the poster child for rural electrification and solar irrigation schemes.
The Q1 FY26 results continue to impress on margins, but the growth in debtors (152 days!) and the new borrowing plan raise questions. Is Shakti powering up for a big expansion or just soaking itself in financial risk? Let’s dive in.
Business Model (WTF Do They Even Do?)
Shakti Pumps manufactures:
- Pumps – submersible, solar, centrifugal, pressure booster, wastewater, and more.
- Motors – submersible, surface, EV motors (yes, EVs).
- Controllers & Drives – solar pump controllers, hybrid drives, soft starters.
- Others – solar structures, mechanical seals, and PLC solutions.
Their sweet spot? Solar pumping solutions, which align with government subsidies and renewable energy push. They also have a strong export presence. The business model is solid but heavily reliant on government schemes and timely payments, which explains the massive receivables.
Financials Overview
Q1 FY26 key metrics:
- Revenue: ₹622 crore (+9.7% YoY)
- EBITDA: ₹144 crore (OPM 23%)
- Net Profit: ₹97 crore (+4.5% YoY)
- EPS: ₹8.06
FY25 was a blockbuster with revenue ₹2,571 crore and PAT ₹413 crore.
Commentary: Margins remain excellent, but debtor days (152) indicate cash is stuck. Promoter stake dropped to 50.3% (from 51.6%), raising minor governance eyebrows.
Valuation – Fair or Firing Up?
Current Price: ₹893
TTM EPS: ₹34.3
P/E: 26.7
Book Value: ₹96.6 (P/B 9.25 – steep)
Fair Value Range:
- P/E Method: Fair P/E 20–22 × EPS ₹34 → FV ₹680–₹750
- EV/EBITDA: FY25 EBITDA ₹611 crore, EV/EBITDA 15× → FV ₹900–₹950
- DCF: Strong cashflows but high risk → FV ₹850–₹1,000
🎯 Fair Value Range: ₹750–₹950. Current price is fair, but high expectations are baked in.
What’s Cooking – News, Triggers, Drama
- Q1 PAT up modestly; growth slowed from FY25 highs.
- ₹3,000 crore borrowing approved – likely to fund expansion or solar projects.
- Promoter stake dip to 50.3% – watch this trend.
- Cost auditor re-appointed, AGM scheduled.
- Earnings call on 4 Aug 2025 – expect clarity on borrowings.
Balance Sheet (Auditor’s Stand-Up)
| (₹ Cr) | Mar 23 | Mar 24 | Mar 25 |
|---|---|---|---|
| Assets | 725 | 1,450 | 1,974 |
| Liabilities | 307 | 695 | 813 |
| Net Worth | 418 | 756 | 1,161 |
| Borrowings | 75 | 85 | 168 |
Audit Punchline: Assets doubled, borrowings doubled – at this rate, they’ll need a pump to control their own leverage.
Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating | 39 | 54 | 20 |
| Investing | -12 | -67 | -198 |
| Financing | -47 | 192 | 44 |
Stand-Up Audit: OCF plunged to ₹20 crore in FY25 despite booming profits. Why? Receivables. Investors, watch your cash flows, not just EPS.
Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE % | 29 | 31 | 43 |
| ROCE % | 10 | 31 | 55 |
| P/E | 30 | 28 | 26.7 |
| PAT Margin % | 2.5 | 10 | 16 |
| D/E | 0.1 | 0.11 | 0.14 |
Commentary: ROE and ROCE are phenomenal, but debtors and receivables keep the risk high.
P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 968 | 1,371 | 2,571 |
| EBITDA | 67 | 225 | 603 |
| PAT | 24 | 142 | 413 |
Remark: FY25 was a leap; Q1 FY26 suggests growth is normalizing.
Peer Comparison
| Company | Revenue (₹Cr) | PAT (₹Cr) | P/E |
|---|---|---|---|
| Cummins India | 10,391 | 1,995 | 49.6 |
| Elgi Equipment | 3,510 | 349 | 50.8 |
| KSB | 2,584 | 255 | 57.5 |
| Shakti Pumps | 2,571 | 413 | 26.7 |
Commentary: Shakti trades at a discount to peers despite better ROE – but higher receivables risk justifies it.
Miscellaneous – Shareholding, Promoters
- Promoters: 50.3% (down)
- FIIs: 5.7% (up)
- DIIs: 6.4% (up)
- Public: 37.6%
FIIs and DIIs increasing stakes – they like the growth story.
EduInvesting Verdict™ (500 Words)
Shakti Pumps continues to be a high-growth, high-risk story. Q1 FY26 shows the company is still profitable with enviable margins, but growth is moderating from the hyper-growth of FY25. The ₹3,000 crore borrowing raises eyebrows – it could fund capacity expansion or new solar projects, but it also risks bloating debt.
Strengths:
- Industry leader in solar pumps and motors.
- Outstanding ROE/ROCE.
- Strong brand and export presence.
Weaknesses:
- Debtor days 152 – working capital nightmare.
- Heavy reliance on subsidies/government schemes.
- High P/B and valuation risk.
Opportunities:
- Government’s renewable energy push.
- Rural irrigation demand.
- EV motor segment scaling up.
Threats:
- Policy changes or subsidy delays.
- Rising borrowing costs from new debt.
- Execution risk on large-scale projects.
Conclusion:
At ₹893, Shakti Pumps is priced for perfection – and it’s delivering, but only just. The company’s fundamentals remain strong, but investors must watch cash flow discipline and debt levels post-borrowing. This is not a value stock; it’s a growth story with volatility. If management executes well, the stock could easily hit ₹1,200 over the next year. If receivables balloon further, investors may end up high and dry.
Written by EduInvesting Team | 01 August 2025
SEO Tags: Shakti Pumps, Q1 FY26 results, solar pump industry, renewable energy, working capital risk
