Key highlights from Shakti Pumps (India) Limited (SHAKTIPUMP) Q3 FY24 Earnings Concall
- Financial Performance
- Quarterly revenue was the highest ever at INR495.6 crores, up 57.7% from INR314.2 crores in Q3 FY23.
- Strong export business with revenue of INR62.2 crores.
- EBITDA for the quarter was INR71 crores against INR21.9 crores in Q3 FY23, increased by 224.2%.
- EBITDA margin expanded to 14.3% from 7% in Q3 FY23.
- PAT was INR45.2 crores, up 301% from INR11.2 crores, with PAT margin at 9.1%.
- Order Book
- Current order book stands at INR2,250 crores to be completed in next 21 months.
- Continues to receive new solar pump orders in addition to ongoing orders.
- R&D Developments
- Filed key patent and received 11 approved patents to be utilized by the company.
- Developing EV motors and controllers, with investment approval of INR13-16 crores.
- Significant role in KUSUM scheme to install 20 lakh solar pumps by 2028.
- Pilot project ongoing for component C to install 15 lakh solar pumps.
- Raw Material Price Stability
- Prices like copper have stabilized over last 2-3 quarters.
- Solar cell prices have also declined and stabilized.
- One year fixed price contracts signed with solar manufacturers for supply.
- Market Size
- Total target is 35 lakh pumps under KUSUM scheme, with 20 lakh in component B and 15 lakh in component C.
- Launched turnkey Beautiful Homes service in 11 cities.
- As of December 2022, over 12 lakh allotted to states, of which 2.8 lakh installed.
- Company has 25-30% market share currently.
- Growth Guidance
- Previous guidance of INR1,200 crores will be exceeded given current run-rate.
- Q3 revenue was INR495 crores, will do over INR500 crores next quarter.
- Expecting 25% growth next year to around INR1,600-1,700 crore revenue.
- Sufficient capacity available without major expansion needed.
- Gross Margin Trajectory
- Higher export sales diluted margins slightly in Q3 but offset by higher EBITDA.
- Going forward, with increasing scale and stable input costs, expect gross margins to improve.
- Scheme Execution
- Delayed execution in initial years.
- Policy and pricing issues being resolved.
- Current order book and results indicate better implementation ahead.
- Market Consolidation
- Company has about 30% market share currently.
- Fragmented market is now more consolidated.
- Company well positioned for growth going forward.
- Margin Stability
- Raw material price fluctuations handled through contracts.
- Helped protect margins over last few quarters.
- Expect margin stability to continue with increasing scale.
- Capacity/International Expansion
- Looking to expand capacity from current INR2,500 crores.
- Proposing QIP issue of INR200 crores for expansion.
- Will support 25% growth guidance for next year.
- INR5 crores sales done in Uganda in Q3.
- Targeting INR5 million quarterly sales going forward.
- Export Outlook
- Exports revenue at INR197 crores in 9M FY24.
- Growth over INR166 crores exports last year.
- EV Business Plans
- EV motor and controller production starting June 2024.
- Targeting domestic and international markets.
- Capacity planned for 2 lakh units annually.
- Considering 4-wheeler segment also.