Shakti Pumps India Limited Q1 FY27 Earnings Call Summary

Event Participants

Executives (5)

Dinesh Patel (CFO), Dinesh Patidar (Chairman), Ramakrishna Sataluri (Shakti Pumps & Energy Solutions Ltd.), Ramesh Patidar (Managing Director), Ravi Patidar (CS & Compliance Officer)

Analysts (18)

Agarwal (PMS), Ankit Shah (Anand Rathi), Arjun Jain (Ravi Investments), Bath Soda (Trinetra Asset Managers), CA Ghanshyam Joshi (Gigi's Techno Funds), Deepak Purswani (Swan Investments), Deepak Rathore (Individual Investor), Divyansh Jaju (Trinetra Asset Managers), Harshil Solanki (Equitree Capital), Himanshu (MB Investment), Keval Gala (Anzen Capital), Prakhar Tibrewala (Choice Institutional Equities), Praveen Mutwani (BOI MF), Razvan K.V. (Sequin Investments), Sukriti Patel (Eyesight Trade Private Limited), Trisha (Sapphire Capital), Varun Agarwal (Individual Investor), Veer C Mehta (Marwadi Shares and Finance Limited)

Financials & KPIs

Geographic & Segment Commentary

• Solar Pumps (Core Business): Record Q1 with 27,678 pumps installed (+57.6% YoY), supported by robust execution of existing orders, healthy state-led program demand, and improved deployment efficiency. Realization per pump was nearly flat QoQ at ₹2.48 lakhs (₹248,153 vs ₹248,374), with only minor sales-mix impact; pumps/motor capacity utilization ran at ~63% with expansion ongoing. Maharashtra payments are under control (30 days outstanding or retention amount), and repeat state awards (recent ~₹350 crore Maharashtra order) reinforce leadership.

• Exports: Steady performance through geopolitical trade disruption, with export order intake of ~₹100 crores per quarter and a diversified order book. Uganda pilot completed successfully with negotiations ongoing in other African countries; Saudi Arabia is sourcing 40 HP solar pumps, and an Africa order for 100 pumps is expanding market awareness.

• Rooftop & Energy Solutions: Revenue of ₹8 crores vs ₹2 crores like-for-like; strong inverter market feedback (~10% better generation). Registered as a brand owner under PM Surya Ghar; the 500 MW DCR module facility (September 2026) positions Shakti to become the only fully integrated rooftop service provider in India.

• Retail & Aftermarket (B2C): Sales of ₹24 crores in Q1 FY27 with continued dealer network expansion; gaining traction as a complementary growth engine to the solar business.

• EV Business: Currently in trial order phase with new customers; validation and onboarding are inherently time-consuming. Management remains optimistic on long-term potential, expecting meaningful momentum and revenue contribution from FY28.

Company-Specific & Strategic Commentary

• Backward Integration & Capacity Expansion: ~₹1,500-1,700 crores of capex through September 2027 across pumps, motors, VFDs and solar structures; 500 MW DCR module facility by September 2026 and 2.2 GW integrated DCR cell/module project by September 2027. VFDs, controllers and solar structures are already 100% in-house, reducing vendor dependence.

• Rooftop Full-Integration Positioning: With cell/module capacity coming online, Shakti aims to replicate its pumps-industry integration leadership in rooftop solar; PM Surya Ghar's next-phase focus on quality, digitalization and customer experience aligns with Shakti's end-to-end warranty model.

• Balance Sheet & Liquidity Management: ~₹1,800 crores working capital lines from ~10 banks (incl. one Qatari bank) and an ₹800 crore term loan tied to the 2.2 GW project. Vendor policy of 2-3 suppliers per product and active nodal agency follow-ups protect realizations and cash flows.

• Long-Term Growth Target: Management affirmed a ~₹5,000 crore revenue target by FY29, built across the complete portfolio - solar pumps, rooftop (industry benchmark ~15% EBITDA for integrated modules/cells), exports, retail and EV - with no formal segment split disclosed.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Margin Bridge & Profitability Outlook

• Question: Directionally, how do we see the ~10% EBITDA margin moving - is 10% the bottom? (Praveen Mutwani, BOI MF)
• Answer: The 10% YoY EBITDA margin impact breaks into ~6% from raw material costs (₹36 crores) and 4% from lower sales price realization (₹25 crores). The price war is at its closing stage, so the direction should reverse, supporting sequential margin improvement. (Management)

Margin Decline - Cyclical vs Structural

• Question: Margins fell from ~24-25% (FY24-25) to ~10% - is this raw material inflation, competitive pricing, or product mix? Cyclical or structural? Any hedging against price increases? (CA Ghanshyam Joshi, Gigi's Techno Funds)
• Answer: The EBITDA gap versus last year (~₹61-65 crores, from ~₹144 crores to ~₹83 crores) is fully explained by ~₹25 crores of lower sales price realization (4%) and ~₹36 crores of raw metal price hikes (6%). This is temporary and external, driven by the war region; no hedging has been taken because the position is expected to subside in the next quarters. (Management)

Order Book, PM KUSUM 2.0 & State Schemes

• Question: How much of the ₹1,000 crore order book is rooftop? What is the execution timeline, PM 2.0 order timing, and realization per pump? (Razvan K.V., Sequin Investments)
• Answer: Rooftop is negligible in the order book (B2B/B2G dominated). The book is executable within the next two quarters. PM KUSUM 2.0 orders are expected in Q3-Q4 FY27, subject to scheme guidelines/specifications. Realization per pump was ~₹248,153 vs ~₹248,374 last quarter - nearly flat, with minor sales-mix impact. (Management)
• Question: Will the ₹1,000 crore order book be executed by end of Q2 or spill into H2? Can we model ₹600 crores in Q2 and ₹400 crores in Q3? (Agarwal, PMS)
• Answer: The book covers the next two quarters at a similar run rate, and fresh orders (including expected state scheme awards) will add to it; roughly ₹500 crores per quarter run rate. (Management)
• Question: What is the state-wise order progress and EV vertical timeline? (Keval Gala, Anzen Capital)
• Answer: Maharashtra recently announced a ~₹350 crore order; Karnataka has progressed; other state schemes are expected to start by quarter-end. PM KUSUM 2.0 in Rajasthan is showing meaningful progress. EV products are in validation/testing - a time-consuming phase - with revenue contribution expected from next year (FY28). (Management)

Export Strategy & New Geographies

• Question: Update on Africa opportunity? (Harshil Solanki, Equitree Capital)
• Answer: The Uganda pilot has been successfully completed; negotiations are ongoing with other countries. Saudi Arabia is taking 40 HP solar pumps in the Middle East, and Africa has placed an order for 100 solar pumps - increasing awareness and business. (Management)
• Question: Any impact on Middle East exports due to the war? (Ankit Shah, Anand Rathi)
• Answer: Export revenue was maintained YoY in Q1 despite supply chain impacts, helped by a diversified order book. Export order intake is running at ~₹100 crores per quarter. (Management)

Rooftop Solar Strategy

• Question: What are the top 2-3 execution priorities and the biggest demand/competition risks for rooftop? (Sukriti Patel, Eyesight Trade Private Limited)
• Answer: Priorities are quality of products, digitalization (installation and data management), and end-to-end customer experience/warranty. With the 500 MW plant coming up, Shakti will be the only fully integrated rooftop service provider, which supports the end-to-end warranty model. (Ramakrishna Sataluri)
• Question: Solar cell manufacturing commercialization timeline and supply chain reliability? (Veer C Mehta, Marwadi Shares and Finance Limited)
• Answer: The 0.5 GW facility will be complete by September 2026 and the 2.2 GW project by September 2027, delivering full integration for both rooftop and solar pump businesses. (Management)

Financial Risk & Balance Sheet Management

• Question: What key risks do you anticipate (raw material volatility, receivables, compliance) and what measures protect margins, cash flow and the balance sheet? (Sukriti Patel, Eyesight Trade Private Limited, to CFO)
• Answer: Working capital arrangements total ~₹1,800 crores across ~10 banks, including one Qatari bank. A term loan agreement of ~₹800 crores supports the 2.2 GW project. We continue follow-ups with nodal agencies for timely realizations and maintain a 2-3 vendor policy per product to strengthen the balance sheet and profitability. (CFO, Dinesh Patel)

Long-Term Growth Target & Business Mix

• Question: For the ₹5,000 crore revenue target in three years, what business split do you expect (rooftop, exports, motors)? What are rooftop margins now and post module integration? (Trisha, Sapphire Capital)
• Answer: The ~₹5,000 crore target by FY29 is based on the complete portfolio - solar pumps, rooftop, exports, retail and EV - supported by capacity doubling, with no concrete segment split disclosed. Rooftop is mostly B2C; the industry benchmark for integrated modules/cells is ~15% EBITDA. (Management)

Competitive Position

• Question: Why have peers maintained margins while Shakti's are at ~10%? What is Shakti doing wrong? (Bath Soda, Trinetra Asset Managers)
• Answer: The pressure is specific to Shakti's realization impact (₹25 crores) and raw material impact (₹36 crores). Management continues field-level demand creation, generating farmer mouth-publicity and repeat orders from Maharashtra and other states, sustaining its leadership position. (Management)

Key Takeaway

Shakti Pumps delivered a record Q1 FY27 revenue of ₹859 crores (+37.9% YoY), led by solar pump installations of 27,678 units (+57.6% YoY) and a ₹1,000 crore order book with two-quarter visibility. EBITDA margin was broadly stable sequentially at 9.6%, but down ~10 points YoY from ~₹36 crores of raw material inflation and ~₹25 crores of realization pressure; management termed these temporary and external, guiding sequential recovery as the industry price war closes. PAT rose 35% QoQ to ₹52 crores (6% margin). Strategy centers on ~₹1,500-1,700 crores of capex through September 2027 - including 500 MW modules (September 2026) and 2.2 GW cells/modules (September 2027) - to drive a ~₹5,000 crore FY29 revenue target spanning solar pumps, rooftop (₹8 crores Q1 revenue), exports (₹100 crores quarterly orders), retail (₹24 crores) and EV (FY28 ramp). Key watch points are raw material normalization, tender realizations, and PM KUSUM 2.0 order timing in H2 FY27.

Note: Portions of the Q&A were partially garbled in transcription due to audio quality; figures and statements above reflect the most complete and internally consistent reading of the transcript.