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.