Detailed Narrative
Q2 and H1 FY26 Financial Performance
Shakti Pumps reported its highest ever quarterly consolidated revenue of ₹666 crores in Q2 FY26, marking a 5% year-on-year growth. For the first half of FY26, revenue stood at ₹1,289 crores, a 7% increase compared to H1 FY25. EBITDA for Q2 FY26 was ₹136 crores with a margin of 20.4%, while H1 FY26 EBITDA was ₹280 crores with a 21.7% margin. Profit After Tax for Q2 FY26 was ₹91 crores, with a 13.6% PAT margin.
Solar Pumps and Emerging Businesses Growth
The solar pumps business remains a key driver, with 22,304 installations in Q2 FY26 and 39,861 in H1 FY26, representing 21% and 19% growth respectively. Beyond solar pumps, retail sales surged 67% year-on-year to ₹43 crores, supported by over 100 exclusive outlets. The export business also showed strong momentum, contributing ₹103 crores in Q2 FY26 and ₹200 crores in H1 FY26.
Receivables and Working Capital Management
Receivables increased to ₹1,639 crores as of September 30, 2025, primarily due to extended monsoons impacting pump operation and RMS-linked collection cycles, including a 10% retention amount. Management expects a substantial portion of these receivables to be realized in the next quarter. The company aims to maintain its year-end receivables cycle guidance of 120 days, believing the current increase is temporary.
Solar Cell and Module Manufacturing Project
Shakti Pumps is on track with its capex plan, including a ₹1,200 crore investment for a 2.2 gigawatts solar DCR cell and PV module plant. This plant is expected to be commissioned by March 2027, generating revenue from that point. At 75% capacity utilization, it is projected to generate ₹3,000 crores in revenue with a 15% EBITDA level, offering a payback period of approximately three years. Funding for this project will come from the QIP (₹292 crores) and a mix of debt and internal equity.
Solar Rooftop Business Strategy
The company is focusing on getting the basics right for its solar rooftop business, which operates largely under the PM Surya Ghar Muft Bijli Yojana. Key initiatives include developing a 'Made in Bharat' inverter offering over 10% more generation, establishing infrastructure with 57 channel partners and training 400 installers, and providing attractive EMI options through a tie-up with Ecofy. The business model involves channel partners buying materials in advance and selling to customers, who then receive government subsidies.
KUSUM Scheme and State Initiatives Outlook
Management clarified that while KUSUM 2 is progressing, it is not critical for their growth as states are increasingly initiating their own solar pump schemes without KUSUM, such as in Maharashtra. The implementation of GST 2.0 reforms has temporarily moderated execution in some states due to issues with farmers' share, but a resolution is expected soon, leading to order conversion. The company is also focusing on cash sales and exports to diversify its revenue streams.
Margin and Revenue Guidance Reiteration
Despite a dip in Q2 FY26 EBITDA margin to 20.4% due to a 3-4% increase in raw material prices, management expects these prices to reduce by 2-3% in the next quarter, allowing them to maintain their margin guideline. The company reiterated its FY26 revenue growth guidance of 20-25% and a target of ₹3,000 crores, expressing confidence in achieving this, citing historical trends of stronger H2 performance.