Oswal Pumps Limited — Q1 FY26 earnings call

Call held 5 Aug 2025

Management summary

Oswal Pumps reported a strong Q1 FY26, achieving record operating income, EBITDA, and PAT, driven by robust demand under the PM-KUSUM scheme and aggressive state-level execution. The company highlighted its fully backward integrated model and extensive service network as key competitive advantages. Management expressed high confidence in sustaining growth and profitability, with significant capacity expansion plans underway and anticipation of PM-KUSUM 2.0.

Highlights

  • Operating Income for Q1 FY26 stood at ₹513.9 crores, growing 36.8% YoY and 40.9% QoQ.

  • Operating EBITDA was ₹140.8 crores, reflecting 38.7% YoY and 42.4% QoQ growth.

  • EBITDA margin for the quarter was 27.4%.

  • Profit After Tax (PAT) reached ₹94.7 crores, up 48.2% QoQ, with a PAT margin of 18.4%.

  • The company's order book stood at 29,961 pumps as of July 31, 2025, with a value of ₹700-800 crores.

  • Oswal Pumps supplied ~48,900 turnkey solar pumping systems under PM-KUSUM as of June 30, 2025, holding a 31% market share.

  • Capacity expansion planned from 2 lakh pumps to over 5 lakh pumps within a year, and 1.5 gigawatt for solar modules.

  • FY26 revenue growth guidance is 50%-60%, with a medium-term CAGR of 30%-35%.

Key financials

  1. Operating Income ₹513.9 Cr +36.8%YoY
  2. Operating EBITDA ₹140.8 Cr +38.7%YoY
  3. EBITDA Margin 27.4%
  4. PAT ₹94.7 Cr +34.2%YoY
  5. PAT Margin 18.4%
  6. Return on Net Worth 41.6%
  7. Return on Capital Employed 50.6%
  8. Cash Conversion Cycle 136 days
  9. Net Debt ₹-8.9 Cr
  10. Order Book (Pumps) 29,961 units
  11. Order Book Value ₹700 Cr

What they filed

Q1 FY27: revenue down 7.8%, net profit down 43.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue310 380 365 514 540 +74%501 +32%510 +40%474 −8%
EBITDA101 118 99 141 128 +27%127 +8%118 +19%74 −48%
Net profit66 80 64 95 98 +48%92 +15%93 +45%54 −43%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY26 · High confidence 50%-60%
    For FY'26, we are targeting revenue growth in the range of 50% to 60%

    — Subodh Kumar, CFO

  • Revenue CAGR Revenue · medium-term · Medium confidence 30%-35%
    with a medium-term goal of maintaining a CAGR of 30% to 35%.

    — Subodh Kumar, CFO

Margin

  • Operating EBITDA Margin Margin · FY26 · High confidence 27%-29%
    We are guiding for operating EBITDA margin in the range of 27% to 29%

    — Subodh Kumar, CFO

  • PAT Margin Margin · FY26 · High confidence 18%-20%
    and PAT margin between 18% to 20%.

    — Subodh Kumar, CFO

Capacity

  • Pump Manufacturing Capacity Capacity · within a year · High confidence >5 lakh pumps
    The existing capacity is around 2 lakh pumps. We are going to increase the capacity to more than 5 lakh pumps. Approximately 5 lakhs and more than 5 lakhs. And our target is to achieve this full capacity within a year.

    — Vivek Gupta, Chairman and MD

  • Solar Module Manufacturing Capacity Capacity · null · High confidence 1.5 gigawatt
    And simultaneously, we had planned 1.5 gigawatt in the solar module for the expansion.

    — Vivek Gupta, Chairman and MD

Working Capital

  • Receivable Cycle Days Working Capital · coming time · High confidence reduce by 30 days
    Central Government is aggressively planning to reduce the receivable cycle. And we hope that in the coming time, this receivable cycle, which is of 120 - 125 days, it is going to reduce by 30 days more.

    — Vivek Gupta, Chairman and MD

Volume

  • Total Pumps Sold Volume · FY26 · Medium confidence ~2,50,000 pumps (typically 2,25,000-2,35,000)
    In FY25-26, we are thinking that we should sell around 2,50,000 pumps. Typically, we are selling around 2,25,000 to 2,35,000 pumps.

    — Vivek Gupta, Chairman and MD

  • Industry Solar Pumps Installed Volume · FY26 · High confidence 4,50,000 pumps
    So, in FY'26, you are considering the installation of 4,50,000 pumps compared to 3,00,000 pumps by industry.

    — Vivek Gupta, Chairman and MD

Risks & concerns

  • Working capital deterioration (increase in receivable days)

    medium

    Receivable days increased compared to March, currently 125-126 days. Management expects government initiatives to reduce this by 30 days.

    Analyst acknowledged

  • Execution slowdown by competitors and potential industry challenges (e.g., cell supplies)

    low

    Analyst noted competitors experiencing slowdown, but Oswal management stated they have no issues with raw material or cell procurement.

    Analyst downplayed

  • PM-KUSUM 2.0 delay

    low

    Management has backup plans in export and dealer-distributor markets if KUSUM-2 is delayed, and is confident it will launch this fiscal year.

    Analyst acknowledged

  • State government budget problems impacting CAPEX and orders

    low

    Analyst suggested state budget problems, but management stated they have not faced any concern or challenge regarding budget in the program.

    Analyst downplayed

Areas of evasion (1)

  • Management struggled to articulate potential negative factors or risks in their highly optimistic outlook when pressed by an analyst.

Q&A highlights

2 direct
Sustainability of high margins and potential risks in an 'ideal scenario' Partial
Even I am not able to think how to think negatively. It is very disturbing for me sometimes. Genuinely, I am not able to understand what I am able to think negatively. So, it is a big mystery for me as well.

Challenges management's highly bullish outlook by questioning the lack of identified risks in a seemingly perfect scenario, highlighting potential over-optimism.

Asked by Bharat Shah

Potential delays in PM-KUSUM 2.0 and backup plans Direct
If PM-KUSUM-2 is delayed for any reason, then look at our export market. We are already losing a lot of orders in the export market. So, we will definitely achieve that order. Second, we are also losing very big orders in our dealer-distributor market.

Reveals the company's contingency plans beyond government schemes, indicating diversification strategies and resilience to potential policy delays.

Asked by Ankur Kumar

Industry-wide order book and the analyst's perception of decreasing orders vs. management's view Direct
First of all, I do not agree with you that the orders are decreasing. Last year, if 2,80,000 or 3,00,000 pumps were installed, then this year, the Government wants to install 6,00,000 pumps.

Highlights a divergence in perception between an analyst and management regarding the industry's order trajectory, which could be a key point of contention for investors.

Asked by Dhavan Shah

2 min read 6 chapters

Detailed narrative

Strong Q1 FY26 Performance Driven by PM-KUSUM

Oswal Pumps reported a robust Q1 FY26, with operating income reaching ₹513.9 crores, marking a 36.8% YoY and 40.9% QoQ growth. Operating EBITDA grew 38.7% YoY and 42.4% QoQ to ₹140.8 crores, achieving a 27.4% margin. Profit After Tax (PAT) surged 48.2% QoQ to ₹94.7 crores, with an 18.4% PAT margin. This strong performance was largely attributed to the PM-KUSUM scheme, under which the company supplied approximately 48,900 turnkey solar pumping systems as of June 30, 2025, securing a 31% market share.

Aggressive Capacity Expansion and Backward Integration

The company is undertaking significant capacity expansion, planning to increase pump manufacturing capacity from the current 2 lakh pumps to over 5 lakh pumps within a year. Additionally, a 1.5 gigawatt solar module manufacturing capacity expansion is underway. Management emphasized its 100% backward integrated model, covering pumps, motors, PV modules, structures, and BOS kits, which ensures consistent quality, cost management, and industry-leading margins.

Robust Order Book and Future Growth Outlook

As of July 31, 2025, Oswal Pumps held an order book of 29,961 pumps, valued at roughly ₹700-800 crores, with an execution period of 120-150 days. For FY26, the company targets a revenue growth of 50%-60% and aims for a medium-term CAGR of 30%-35%. Management anticipates the launch of PM-KUSUM 2.0 by the end of the fiscal year, expecting it to be larger in scope and further drive demand.

Profitability and Working Capital Management

Oswal Pumps guided for an operating EBITDA margin in the range of 27%-29% and a PAT margin of 18%-20% for FY26, expressing high confidence in sustaining these levels. The cash conversion cycle stood at 136 days at the end of June 2025, with a net debt position of negative ₹8.9 crores. Management is bullish on reducing the receivable cycle further by approximately 30 days, supported by Central Government initiatives.

Diversification and New Product Development

While heavily reliant on government schemes, Oswal Pumps is also exploring export and dealer-distributor markets as backup plans for potential PM-KUSUM 2.0 delays. The company is actively participating in tenders across various states, including Maharashtra, Haryana, Rajasthan, UP, MP, Assam, and Karnataka. R&D efforts are focused on new product launches, with plans to introduce industrial pumps, helical pumps, and boiler feed pumps for sampling by the end of Q3 or Q4 FY26.

PM-KUSUM 2.0 and Market Dynamics

Management is highly optimistic about PM-KUSUM 2.0, noting that the Central Government is actively seeking state requirements for over 1 crore pumps to launch the scheme aggressively within 1-2 years. They project industry-wide solar pump installations to reach 4.5 lakh pumps in FY26, up from 3 lakh in FY25. Despite a slight decline in 3HP pump package pricing due to new competition, Oswal expects minimal impact due to its integrated model and ability to buffer margins.

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