Oswal Pumps Limited — Q3 FY26 earnings call

Call held 9 Feb 2026

Management summary

Oswal Pumps delivered strong Q3 FY26 results, with total income growing 33.4% YoY to ₹507.7 crores and operating EBITDA margin improving to 25.4%. The company maintained a robust order book and pipeline, driven by government solar pumping programs. While profitability was impacted by competitive pricing and raw material costs, strategic initiatives and backward integration helped mitigate the pressure. The company is actively expanding capacity and diversifying its business to reduce reliance on single schemes, despite temporary working capital challenges from delayed government receivables.

Highlights

  • Q3 FY26 Total Income: ₹507.7 crores, up 33.4% YoY.

  • Q3 FY26 Operating Revenue: ₹501.1 crores, up 31.9% YoY.

  • Q3 FY26 Operating EBITDA: ₹127.1 crores, with a margin of 25.4% (164 bps sequential improvement).

  • Q3 FY26 Normalized PBT: ₹121.1 crores, with a margin of 23.8% (16.0% YoY growth).

  • Q3 FY26 PAT: ₹91.6 crores, with a margin of 18.0%.

  • Current Order Book: Over 24,500 pumps, with a near-term pipeline exceeding 25,000 pumps.

  • Net Debt (as of Dec 31, 2025): Approximately ₹188 crores, with Net Debt to Equity at 0.12x.

  • Cash Conversion Cycle: Increased to 177 days (from 157 days in Sep) due to delayed government receivables.

Key financials

  1. Total Income ₹507.7 Cr +33.4%YoY
  2. Operating Revenue ₹501.1 Cr +31.9%YoY
  3. Operating EBITDA ₹127.1 Cr
  4. Operating EBITDA Margin 25.4%
  5. Normalized PBT ₹121.1 Cr +16%YoY
  6. PAT ₹91.6 Cr
  7. PAT Margin 18%
  8. Net Debt ₹188 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 around 50%
    we are maintaining our financial year '26 revenue growth guidance of around 50% year-on-year basis.

    — Mr. Subodh Kumar, Chief Financial Officer

  • Revenue CAGR Revenue · Medium term · High confidence 30% to 35%
    Over the medium term, we continue to target a 30% to 35% revenue on a CAGR basis.

    — Mr. Subodh Kumar, Chief Financial Officer

  • FY27 Growth Revenue · FY27 · High confidence good growth
    FY '27 growth too, in fact, I don't feel any kind of doubt so far that we won't be able to grow. We see good growth.

    — Mr. Vivek Gupta, Chairman and Managing Director

Margin

  • Operating EBITDA Margins Margin · Q4 FY26 · High confidence 25.5% to 26.0%
    operating EBITDA margins for Quarter 4 of financial year '26 are expected in the range of 25.5% to 26.0%.

    — Mr. Subodh Kumar, Chief Financial Officer

  • PAT Margins Margin · FY26 · High confidence 17.5% to 19.0%
    PAT margins for financial year '26 are expected between 17.5% to 19.0%.

    — Mr. Subodh Kumar, Chief Financial Officer

Capex

  • Pump and Motor Plant Capacity Expansion & Automation Capex · Q4 FY26 / Q2 FY27 · High confidence bulk ordering by Q4 FY26, completion by Q2 FY27
    we expect to complete the bulk of ordering towards capacity expansion and automation of our pump and motor facility by Q4 FY '26, with the entire capex program scheduled for completion by Q2 FY '27.

    — Mr. Vivek Gupta, Chairman and Managing Director

Capacity

  • Solar Module Plant Expansion (Phase 1) Capacity · Q1 FY27 · High confidence 1 GW
    we expect the first phase of expansion comprising 1 GW of solar capacity to be completed by Q1 FY '27.

    — Mr. Vivek Gupta, Chairman and Managing Director

  • Solar Module Plant Expansion (Remaining) Capacity · Q3 FY27 · High confidence 0.5 GW
    The remaining 0.5 GW expansion is planned to be completed by Q3 FY '27, in line with our phased execution strategy.

    — Mr. Vivek Gupta, Chairman and Managing Director

Other

  • PM KUSUM 2.0 Launch Other · March/April 2026 · High confidence end of March or early April
    So I think we are expecting this PM KUSUM 2 at the end of March or early April.

    — Mr. Vivek Gupta, Chairman and Managing Director

Working Capital

  • Inventory Days Working Capital · Normal cycle · Medium confidence 32 to 40 days
    Our quarter basis and normal cycle is between 32 to 36 days -- I mean 32 to 40 days, you can assume.

    — Mr. Vivek Gupta, Chairman and Managing Director

Cash Flow

  • Cash Flow Improvement Cash Flow · Q4 end and Q1 FY27 · High confidence improved
    I think will be a little better in this quarter end also, and from the first quarter, I see very good things everything is going to be alright.

    — Mr. Vivek Gupta, Chairman and Managing Director

Risks & concerns

  • Delayed receivables from Maharashtra State Government (Magel Tyala scheme)

    medium

    Receivables increased due to delays from Maharashtra State Government, affecting cash conversion cycle (177 days in Dec vs 157 days in Sep).

    Both acknowledged

  • Competitive pricing environment and raw material price volatility

    medium

    Competitive tender pricing and high metal prices (copper, stainless steel) exerted pressure on margins, but value engineering limited PAT margin impact to 1-1.3%.

    Management acknowledged

  • Potential delay in PM KUSUM 2.0 launch

    low

    PM KUSUM 2.0 launch expected end of March/early April 2026; if delayed, company has alternative growth drivers.

    Analyst acknowledged

Q&A highlights

3 direct
Receivables delay from Maharashtra government's Magel Tyala scheme Direct
Basically, the receivables are definitely related to the Maharashtra State Government's Magel Tyala scheme. Under this scheme, receivables have been delayed due to some funds from Maharashtra State Government... But now state agencies have shown confidence; we have had talks with them too, and they are very confident that their funding has been approved from AIIB and is continuously in line to come.

Addresses a key working capital concern, explaining the cause and management's confidence in resolution.

Asked by Aashish Upganlawar

Impact of PM KUSUM 2.0 delay on FY27 growth and diversification strategy Direct
If PM KUSUM 2, as you asked me, by chance gets delayed or doesn't come, then what is the scene? So definitely, the company has also started thinking towards diversification, and since we already have all those things available, we have started our trials in connected lines like PM Surya Ghar, and we are strengthening its backward integration even more... So I don't think that if I directly assume that PM KUSUM gets delayed -- then there is a very big impact. Definitely, I will say that impact will come for once, but it will be temporary, maybe until H1.

Reveals the company's contingency plans and diversification efforts to de-risk from government scheme delays, providing insight into future growth drivers.

Asked by Surabhi Saraogi

Cash flow resilience, increasing debtor days, and potential for invoice discounting Direct
one thing is clear that all this cash -- difficulty of, it is a temporary phase. It is not a long-term phase, which I think will be a little better in this quarter end also, and from the first quarter, I see very good things everything is going to be alright. And besides that, the invoice discounting, all this, definitely we are exploring, we are talking, it's going on with our banking.

Directly addresses investor concerns about cash flow and working capital, outlining short-term expectations for improvement and exploring financing options.

Asked by Rudraksh Kalra

3 min read 6 chapters

Detailed narrative

Strong Q3 FY26 Performance Driven by Solar Pumping Programs

Oswal Pumps reported a robust Q3 FY26, with total income growing 33.4% year-on-year to INR 507.7 crores and operating revenue increasing 31.9% to INR 501.1 crores. This growth was primarily fueled by consistent execution under the PM KUSUM scheme and state-specific programs like Magel Tyala. Operating EBITDA for the quarter stood at INR 127.1 crores, translating to a healthy margin of 25.4%, a sequential improvement of 164 basis points.

Profitability Maintained Amidst Pricing and Raw Material Pressures

Despite a competitive pricing environment in government-led solar pumping programs and high commodity metal prices, Oswal Pumps managed to sustain profitability. Q3 FY26 Profit Before Tax (PBT) was INR 119.2 crores (23.5% margin), with a normalized PBT of INR 121.1 crores (23.8% margin) after adjusting for a one-time labour code impact. Profit After Tax (PAT) for the quarter was INR 91.6 crores, representing an 18.0% margin. Management attributed this resilience to value engineering, cost optimization, and early benefits from backward integration, limiting the overall PAT margin impact to 1-1.3%.

Working Capital Challenges Due to Delayed Government Receivables

The company experienced an elongation in its cash conversion cycle, which increased from 157 days in September to 177 days in December 2025. This was primarily driven by an increase in receivable days from 138 to 157, largely due to delays in payments from the Maharashtra State Government under the Magel Tyala scheme. Management emphasized that these receivables are secure and temporary, expecting payment cycles to normalize over the medium term and exploring invoice discounting options.

Robust Order Book and Strategic Capacity Expansion

Oswal Pumps maintains a strong order book of over 24,500 pumps and a near-term pipeline exceeding 25,000 pumps, providing healthy revenue visibility. The company is also aggressively expanding its manufacturing capabilities, with bulk ordering for pump and motor plant expansion by Q4 FY26 (completion by Q2 FY27). Its solar module plant is undergoing a phased expansion, with 1 GW capacity expected by Q1 FY27 and the remaining 0.5 GW by Q3 FY27.

Optimistic Outlook for PM KUSUM 2.0 and Diversification Strategy

Management expressed high optimism for the launch of PM KUSUM 2.0, expected by the end of March or early April 2026, anticipating a large quantum of orders and modified schemes. To mitigate dependence on single government programs, the company is actively diversifying into new verticals such as PM Surya Ghar, strengthening its export team, expanding its private domestic market network, and exploring EPC for large rooftop solar systems. This strategy aims to ensure sustainable growth even if PM KUSUM 2.0 faces temporary delays.

Financial Guidance and Long-Term Growth Targets

The company reiterated its FY26 revenue growth guidance of around 50% year-on-year and a medium-term revenue CAGR of 30% to 35%. For Q4 FY26, operating EBITDA margins are expected to be in the range of 25.5% to 26.0%, with FY26 PAT margins projected between 17.5% and 19.0%. Management is confident in achieving good growth in FY27, supported by the strong order book and diversification initiatives, despite potential Q1 FY27 slowness if PM KUSUM 2.0 launches late.

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