Oswal Pumps Limited — Q2 FY26 earnings call

Call held 14 Nov 2025

Management summary

Oswal Pumps reported robust revenue growth in Q2 FY26, driven by PM KUSUM and Magel Tyala orders. However, margins faced pressure due to competitive L1 pricing and one-time expenses, though management expects recovery in Q3 and Q4. The company maintains a strong order book and is aggressively expanding capacity, while addressing working capital challenges related to government payment cycles.

Highlights

  • Operating revenue for Q2 FY26 stood at ₹540 crores, reflecting a strong 73.9% YoY growth and 5% QoQ growth.

  • Operating EBITDA for the quarter was ₹128 crores, growing 26.5% YoY but declining 9.1% QoQ.

  • Operating EBITDA margin for Q2 FY26 was 23.7%, experiencing a 3.68% QoQ decline due to L1 pricing and one-time factors.

  • PAT for Q2 FY26 was ₹98 crores, up 48.3% YoY and 3% QoQ, with a PAT margin of 17.8%.

  • The company reported a strong order book exceeding 18,800 pumps and a near-term pipeline of over 30,000 pumps.

  • Receivable days increased to 138 days as of September 2025, up from 126 days in June 2025, primarily due to PM KUSUM payment terms and bank loan disbursement delays.

  • Oswal Pumps aims to achieve 5 lakh pumps capacity by H1 FY27 and targets 1 lakh to 1.10 lakh solar pump installations in FY27.

  • Full year FY26 turnover is expected to be around ₹2,200 crores, with revenue growth guidance of 50%-60%.

Key financials

  1. Operating Revenue ₹540 Cr +73.9%YoY
  2. Operating EBITDA ₹128 Cr +26.5%YoY
  3. Operating EBITDA Margin 23.7% -3.7%QoQ
  4. PAT ₹98 Cr +48.3%YoY
  5. PAT Margin 17.8%
  6. Receivable Days 138 days

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 financial '26, we are targeting revenue growth in the range of 50% to 60% with a medium-term goal of maintaining a CAGR of 30% to 35%.

    — Subodh Kumar, Chief Financial Officer

  • CAGR Revenue · medium-term · High confidence 30%-35%

    — Subodh Kumar, Chief Financial Officer

  • Full Year Turnover Revenue · FY26 · High confidence ₹2,200 crores
    Definitely sir. This is our viewpoint. In the first earning call, we gave the visibility that we can see 50%-60% growth this year. So, I feel that if I look at the viewpoints and achievements till now, there is no gap or concern regarding that.

    — Vivek Gupta, Chairman and Managing Director

Margin

  • Operating EBITDA Margin Recovery Margin · Q3 FY26 · High confidence 1.8%
    These factors together caused an estimated 1.8% decline in operating EBITDA margins, which we expect to recover in Q3 FY '26.

    — Vivek Gupta, Chairman and Managing Director

  • Cost Saving Margin · Q4 FY26 · High confidence 100 bps
    The one-time margin impact witnessed during the quarter is not expected to reoccur in the remainder of the financial year, and further cost saving for at least 100 basis points we are expecting by Q4 financial '26.

    — Subodh Kumar, Chief Financial Officer

  • Operating EBITDA Margin Margin · Q3 FY26 · High confidence 25.5%-26%
    So, in quarter 3, we are expecting around 25.5% EBITDA margin. We are expecting 25.5% or 26% EBITDA margin in lower side. We are very much confident that we will achieve it.

    — Vivek Gupta, Chairman and Managing Director

  • Operating EBITDA Margin Margin · Q4 FY26 · High confidence 26.25%-26.75%
    And in quarter 4, again, we are expecting around 27% EBITDA margin. Around 26.75% max. We are expecting.

    — Vivek Gupta, Chairman and Managing Director

Profitability

  • PAT Margins Profitability · FY26 · High confidence 17.5%-19%
    We expect PAT margins to be in the range of 17.5% to 19%.

    — Subodh Kumar, Chief Financial Officer

Order Book

  • Order Book (Pumps) Order Book · current · High confidence 18,800
    Looking ahead, we have a strong order book exceeding 18,800 pumps consisting of direct PM KUSUM, Magel Tyala, indirect PM KUSUM and export orders...

    — Vivek Gupta, Chairman and Managing Director

  • Near-term Pipeline (Pumps) Order Book · near-term · High confidence 30,000
    ...and a near-term pipeline of over 30,000 pumps across major states including Maharashtra, Haryana, Karnataka, Madhya Pradesh.

    — Vivek Gupta, Chairman and Managing Director

Capacity

  • Solar Module Capacity in Operation Capacity · FY26 · High confidence 0.75 MW
    So, the timeline that we have in solar project is within the timeline. So, in this financial year, we will get 0.75 MW in operation.

    — Vivek Gupta, Chairman and Managing Director

  • Solar Module Capacity in Operation Capacity · next financial year · High confidence 0.75 MW
    And, in the next financial year, we will get 0.75 MW in operation.

    — Vivek Gupta, Chairman and Managing Director

  • Total Pump Capacity Capacity · H1 FY27 · High confidence 5 lakh
    So as we said that we will achieve this capacity up to 5 lakh by H1 '27.

    — Vivek Gupta, Chairman and Managing Director

Volume

  • Pumps Installed Volume · FY26 · High confidence 65,000-75,000
    We had given around 65,000 to 75,000 pumps will be installed this year. We had given around 75,000. We are quite very much confident. We do not see any gap or concern in those numbers.

    — Vivek Gupta, Chairman and Managing Director

  • Solar Pump Installation Volume · FY27 · High confidence 1 lakh-1.10 lakh
    So as per our guidance, if we talk about FY '27, we have shown our visibility of 1 lakh, 1.10 lakh pumps in solar pump installation.

    — Vivek Gupta, Chairman and Managing Director

Risks & concerns

  • Margin pressure from competitive L1 pricing in government tenders

    medium

    L1 prices in PM KUSUM and Magel Tyala tenders fell by 7.5%, impacting over 80% of core revenue, but mitigated by value engineering.

    Management acknowledged

  • Working capital deterioration due to extended receivable days

    medium

    Receivable days increased to 138 days (from 126) due to PM KUSUM payment terms (90-day operation requirement) and temporary bank loan disbursement delays, expected to improve.

    Management acknowledged

  • Impact of new EPC players and price competition on tender rates

    medium

    Increasing number of EPC players has led to a 10-11% reduction in tender prices, which will have some effect, but Oswal's backward integration helps.

    Both acknowledged

  • Raw material price volatility

    low

    Analyst raised concern about raw material price increases; management stated prices are not expected to go down and backward integration helps mitigate impact.

    Analyst downplayed

Q&A highlights

3 direct
Impact of KUSUM 2 delays on growth outlook Direct
Even then, in today's date, the state governments like for instance, if we talk about Maharashtra, in Maharashtra, Magel Tyala state government has continued its orders and tenders. So there, because of PM KUSUM 2, the orders are not going to be delayed nor are they happening.

Addresses investor concerns about potential growth slowdown if the next phase of the key government scheme (KUSUM 2) is delayed, highlighting continued state-level orders.

Asked by Prit Nagersheth

EBITDA margin guidance and recovery post one-time impact Direct
So, in quarter 3, we are expecting around 25.5% EBITDA margin. We are expecting 25.5% or 26% EBITDA margin in lower side. We are very much confident that we will achieve it. And in quarter 4, again, we are expecting around 27% EBITDA margin. Around 26.75% max. We are expecting.

Provides specific, actionable margin targets for the upcoming quarters, reassuring investors about the temporary nature of Q2 margin compression.

Asked by Prit Nagersheth

Entry barriers in the solar pump industry and impact of new EPC players Direct
Definitely, if I talk about the setup that we have, then definitely, there is a very strong entry barrier. Meaning, they cannot come easily. But if I talk from another angle, as an EPC player, who does not only do production, they do not have a team, they outsource everything, they only do EPC work. So, definitely, the number of EPC players is increasing comparatively to the old tenders.

Clarifies the competitive landscape, distinguishing between integrated players (like Oswal) with strong barriers and EPC players who contribute to price competition.

Asked by Surendra

3 min read 6 chapters

Detailed narrative

Q2 FY26 Financial Performance Overview

Oswal Pumps reported a robust Q2 FY26 with operating revenue of ₹540 crores, marking a significant 73.9% year-on-year growth and a 5% quarter-on-quarter increase. Operating EBITDA stood at ₹128 crores, growing 26.5% YoY, but saw a 9.1% QoQ degrowth. Profit after tax (PAT) was ₹98 crores, up 48.3% YoY and 3% QoQ, resulting in a PAT margin of 17.8% for the quarter.

Margin Dynamics and Recovery Outlook

The operating EBITDA margin for Q2 FY26 was 23.7%, experiencing a 3.68% quarter-on-quarter decline. This was primarily attributed to a 7.5% fall in L1 prices for PM KUSUM and Magel Tyala tenders, affecting over 80% of core revenue, and one-time factors including ₹40 crores of lower-margin module sales and a ₹2.5 crores subsidiary capital increase expense. Management expects to recover the 1.8% margin decline in Q3 FY26 and targets operating EBITDA margins of 25.5%-26% for Q3 FY26 and 26.25%-26.75% for Q4 FY26, supported by value engineering and cost savings of at least 100 basis points by Q4 FY26.

PM KUSUM and Order Book Strength

The sustained revenue momentum was driven by the continued execution of PM KUSUM and Magel Tyala orders. As of October 31, 2025, Oswal Pumps had successfully executed over 80,000 solar pumping systems. The company boasts a strong order book exceeding 18,800 pumps and a near-term pipeline of over 30,000 pumps across major states, positioning it well to achieve its FY26 targets. Management anticipates the launch of PM KUSUM 2 before the fiscal year-end, which is expected to provide further opportunities.

Capacity Expansion and Future Growth

Oswal Pumps is aggressively expanding its manufacturing capabilities, targeting a total pump capacity of 5 lakh units by H1 FY27. For FY26, the company expects to install 65,000 to 75,000 pumps. Looking ahead to FY27, the visibility for solar pump installations is projected at 1 lakh to 1.10 lakh units. The solar module expansion project is being relocated to an adjacent land parcel, offering significant logistical benefits and enhanced operational efficiencies, with 0.75 MW expected to be operational in FY26 and another 0.75 MW in the next fiscal year.

Working Capital Management

Receivable days increased to 138 days as of September 2025, up from 126 days at the end of June 2025. This rise was primarily due to PM KUSUM and Magel Tyala payment terms, which link disbursements to RMS data after 90 days of pump operation, and temporary delays in bank loan disbursements. Management expects the situation to improve in the current quarter as the monsoon season ends and loan disbursements are completed within 10-15 days. The company reported a net debt position of ₹38 crores at quarter-end.

Competitive Landscape and Entry Barriers

Management acknowledges a strong entry barrier for fully backward-integrated players like Oswal Pumps, which manufactures pumps, motors, controllers, and solar modules in-house. However, the increasing number of EPC (Engineering, Procurement, and Construction) players, particularly regional ones, has led to a 10-11% reduction in tender prices. Despite this, Oswal's deep backward integration and focus on value engineering are expected to maintain its competitive edge and superior margins compared to peers.

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