The solar pump market in India is experiencing significant growth, driven by government initiatives and increasing demand for sustainable agricultural practices.
The Indian government has set ambitious targets under the PM KUSUM scheme, aiming to install millions of solar-powered pumps to enhance irrigation and reduce dependency on conventional power sources.
Listed below is one such Solar Pump stock that delivered 2,400 percent in just 4 years:
Shakti Pumps (India) Ltd
Price Movement:
With a market capitalization of Rs. 9,056 crores, the shares of Shakti Pumps (India) Ltd started Monday’s trading session on a higher note at Rs. 4,525 compared to its previous close of Rs. 4,459.60. During the trading session, the shares hit a high of Rs. 4,623, gaining around 3 percent and are currently trading at Rs. 4,551 apiece.
Financials:
Looking at the company’s financial performance, the revenue decreased by around 7 percent from Rs. 609.28 crores during the March quarter to Rs. 567.56 crores in the June quarter. Contrastingly, the net profits jumped by 3 percent from Rs. 89.64 crores to Rs. 92.66 crores during the same timeframe.
Comparing the same metrics on a YoY basis, the revenue zoomed by around 402 percent from Rs. 113.06 crores in Q1FY24 to Rs. 567.56 crores during Q1FY25. In addition, the net profits magnified by 9,166 percent from Rs. 1 crore to Rs. 92.66 crores during the same period.
Order Book:
As of June 30, 2024, the company had an order book of Rs. 2,000 crores. Out of which majority of the orders were received from the Maharashtra State Electricity Distribution Company Limited (MSEDCL) and Maharashtra Energy Department Agency (MEDA).
The remaining orders were received from the Haryana Renewable Energy Department (HAREDA), Department of Agriculture, Uttar Pradesh, Rajasthan Horticulture Development Society (RHDS), Ajmer Vidyut Vitran Nigam Limited and others.
Returns:
In July 2020, the stock price was trading at Rs. 174 exhibiting a gain of over 2,300 percent compared to the current price. For example, if someone had invested Rs. 10,000 into the company’s stock 4 years ago, it would have converted to approximately Rs. 2.50 lakhs now.
EV Segment:
The company incorporated a new subsidiary Shakti EV Mobility in December 2021. The subsidiary is engaged in the manufacturing and sale of EV motors, charging stations, battery management systems, electric control panels, smart electric control panels, VFDs and other items.
SPIL Board has approved investments of Rs. 114.3 crores in Shakti EV Mobility, in one or more tranches over 5 years.
Recently the company’s subsidiary has also been granted a patent for their invention of “Stack Assembly for Permanent Magnet Rotor”. This innovation is a significant advancement that promises to revolutionize the performance and efficiency of electric vehicles.
PM KUSUM scheme:
The Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) scheme, launched on March 8, 2019, aims to enhance energy security for farmers in India while promoting renewable energy. Under the KUSUM scheme, the government has a target to install over 3 million solar pumps.
The PM-KUSUM scheme has proven to be highly beneficial for Shakti Pumps (India) Ltd, enhancing its business prospects and supporting its role in the renewable energy sector. Additionally, the company is the biggest beneficiary under the PM KUSUM scheme and holds a 25 percent market share in the scheme.
Future Outlook:
The company has been focusing on research and development (R&D) initiatives, with 29 patents filed and 14 patents received, which are expected to enhance the company’s technological capabilities in the future.
Furthermore, the company plans to invest Rs. 250 crores over the next five years in its newly incorporated green subsidiary.
Important Financial Ratios:
In terms of key financial metrics, the company reported a Return on Equity (RoE) of 18.75 percent and a return on capital employed (RoCE) of 27.35 percent for the period spanning FY23-24. Additionally, during the same period, the net profit margin stood at 10.33 percent.
Company Profile:
Headquartered in Pithampur, Shakti Pumps was incorporated in 1995. The company is primarily engaged in the manufacturing of pumps and motors of various kinds. It also offers advanced water pumping solutions to a wide range of applications such as irrigation, horticulture, domestic water supply, and commercial and industrial applications.
Written By Vaibhav Patil
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