💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue for Q2 FY26 reached INR 666.4 Cr, a 5% YoY increase. Solar pump revenue for Q2 FY26 was approximately INR 487 Cr. Retail sales grew 67% YoY to INR 43 Cr. Export revenue for Q2 FY26 stood at INR 103 Cr and INR 200 Cr for H1 FY26. The company maintains a 25% revenue growth guidance for FY26, targeting approximately INR 3,000 Cr.

Geographic Revenue Split

Domestic operations are heavily concentrated in Maharashtra, which led execution in H1 FY26. Other key states include Madhya Pradesh, Rajasthan, Haryana, and Punjab. International business spans 100+ countries across all major continents, contributing INR 200 Cr (15.5%) to H1 FY26 revenue.

Profitability Margins

PAT margin for Q2 FY26 was 13.6% (INR 90.7 Cr) compared to 16.0% in Q2 FY25. H1 FY26 PAT margin stood at 14.6% (INR 187.5 Cr). FY25 PAT margin was 16.2% (INR 408.4 Cr). Margins were impacted by a 3-4% rise in raw material costs and pricing pressure in specific state schemes.

EBITDA Margin

EBITDA margin for Q2 FY26 was 20.4% (INR 136 Cr), down 300 bps from 23.4% in Q2 FY25. H1 FY26 EBITDA margin was 21.7% (INR 279.5 Cr). The decline is attributed to raw material inflation and a change in the sales mix toward lower-HP pumps in Maharashtra.

Capital Expenditure

The company is executing a total capex plan of INR 1,700 Cr. This includes INR 250 Cr for doubling pump and motor capacity, INR 250 Cr for EV motors and controllers, and INR 1,200 Cr for a new 2.2 GW solar cell and module plant expected to commission by March 2027.

Credit Rating & Borrowing

The company received an ESG rating of 75 ('Good') from ICRA. As of September 2025, term loans stood at INR 46.8 Cr and working capital secured loans at INR 569.6 Cr. Funding for capex includes INR 292 Cr from a July QIP, with the remainder from debt and internal accruals.

⚙️ Operational Drivers

Raw Materials

Key raw materials include copper, steel, and solar panels. In Q2 FY26, these materials saw a price increase of 3% to 4%, which directly compressed EBITDA margins by approximately 300 basis points.

Import Sources

Solar cells and modules are currently sourced from domestic third-party players via tie-ups until the company's own 2.2 GW plant is operational in Pithampur, Madhya Pradesh.

Key Suppliers

Not specifically named in the documents, but the company has formal tie-ups with domestic module manufacturers to support the Solar Rooftop business.

Capacity Expansion

Current expansions include doubling VFD and Inverter capacity from 2 lakh to 4 lakh units, increasing solar structure capacity from 1 lakh to 2 lakh units, and establishing an EV facility for 2 lakh motors and controllers annually. A 2.2 GW solar cell and PV module plant is under construction.

Raw Material Costs

Cost of materials consumed was 62.3% of revenue in FY25. In Q2 FY26, raw material volatility (3-4% increase) was the primary driver for the margin drop to 20.4%. The company expects operational leverage to offset these costs in H2 FY26.

Manufacturing Efficiency

Efficiency is driven by high operating leverage; the company noted that increased execution volume in H2 FY26 will help maintain the 20-22% margin guideline despite raw material headwinds.

Logistics & Distribution

Distribution is handled through a dealer-advance model for the rooftop business, where dealers pay in advance, significantly improving cash flow and reducing logistics-related credit risk.

📈 Strategic Growth

Expected Growth Rate

25%

Growth Strategy

Growth will be driven by the execution of the INR 1,300 Cr order book, expansion into the Solar Rooftop market (PM Surya Ghar Muft Bijli Yojana), and the commissioning of the 2.2 GW solar cell plant which has a revenue potential of INR 4,000 Cr. The company is also scaling its EV mobility segment (motors/chargers) and retail presence.

Products & Services

Off-grid and on-grid solar photovoltaic water pumping systems (3HP to 10HP), EV motors, EV controllers, EV chargers, solar structures, VFDs, and solar rooftop solutions.

Brand Portfolio

Shakti, Shakti EV Mobility, Shakti Energy Solutions.

New Products/Services

Solar DCR cells and PV modules (expected to contribute to revenue from March 2027) and EV components including motors and chargers for the mobility sector.

Market Expansion

Expansion into the solar rooftop segment across Rajasthan, Uttar Pradesh, and Maharashtra. International expansion continues across 100+ countries with a focus on solar-heavy geographies.

Market Share & Ranking

The company is a leading player in the solar pump industry and one of only five brands empanelled at the brand level for national solar initiatives.

Strategic Alliances

The company is one of only five brands empanelled at the national level for certain solar programs. It has tie-ups with domestic module manufacturers for its current rooftop requirements.

🌍 External Factors

Industry Trends

The pump industry is shifting toward solar-powered solutions driven by government decarbonization goals. The industry is evolving from simple mechanical pumps to integrated solar-VFD-motor systems with remote monitoring capabilities.

Competitive Landscape

Competes with other solar pump manufacturers in state tenders. Management noted the market is 'very competitive' with industry-standard margins ranging between 10-15%, while Shakti maintains 20%+.

Competitive Moat

Moat is built on brand empanelment (one of 5 players), a massive service network, and deep integration (manufacturing motors, VFDs, and soon cells). This is sustainable due to high entry barriers in government empanelment and the capital-intensive nature of backward integration.

Macro Economic Sensitivity

Highly sensitive to agricultural cycles and monsoon patterns; extended rains in H1 FY26 delayed installations. Also sensitive to government fiscal policy regarding solar subsidies (90% subsidy in MP).

Consumer Behavior

Farmers are increasingly shifting to solar pumps due to high subsidies (up to 90%) and the benefit of grid-tied systems that allow them to sell excess power back to the grid.

Geopolitical Risks

Global supply chain disruptions and war-related scenarios were cited as historical challenges to execution and raw material procurement.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by PM-KUSUM scheme guidelines, state-specific solar policies (e.g., Magel Tyala Saur Krushi Pump Yojana), and GST 2.0 reforms which impact billing and execution timelines.

Environmental Compliance

The company maintains an ESG rating of 75 ('Good') from ICRA, reflecting high compliance with environmental and governance standards.

Taxation Policy Impact

Effective tax rate for H1 FY26 was approximately 25.3% (INR 636 Mn tax on INR 2,512 Mn PBT).

⚠️ Risk Analysis

Key Uncertainties

Execution delays due to weather (monsoon) and regulatory shifts (GST reforms) could impact the achievement of the INR 3,000 Cr revenue target. Potential impact of 5-10% on quarterly targets.

Geographic Concentration Risk

High concentration in Maharashtra, which is currently the primary driver of the order book and execution.

Third Party Dependencies

Temporary dependency on third-party solar cell and module suppliers for the rooftop business until the 2027 plant commissioning.

Technology Obsolescence Risk

Risk is mitigated by continuous R&D in VFDs and high-efficiency motors; however, the shift to EV mobility requires rapid adaptation to new motor controller technologies.

Credit & Counterparty Risk

Significant exposure to state government DISCOMs for subsidy payments. The company manages this by targeting a 120-day receivable cycle and using a dealer-advance model for retail/rooftop segments.