Shakti Pumps Q1 revenue jumps 38% YoY to ₹859 crore, but raw material costs and lower realisations drag margins to 10.9%
Shakti Pumps (India) — the country’s only fully integrated solar pumping manufacturer, whose pumps irrigate farms under government schemes like PM‑KUSUM — filed its Q1 FY27 investor presentation on 25 July 2026. The company reported its highest‑ever quarterly revenue of ₹858.67 crore, up 37.9% year‑on‑year, driven by robust execution of state‑level solar pump orders. However, a combination of lower realisations from the Magel Tyala scheme in Maharashtra and higher raw‑material and logistics costs pushed EBITDA down 35.9% to ₹93.2 crore, compressing the EBITDA margin to 10.9% from 23.4% a year ago. The results underscore a strong demand pipeline — the order book stood at around ₹10,000 crore (including GST) — but they also highlight the near‑term pressure on profitability that the company expects to address through its ₹17,000 crore capex programme and backward integration into solar cells and modules.
Q1 FY27: revenue scales a new peak, but margins shrink for the second straight quarter
The table below summarises the consolidated quarterly performance over the last five quarters, showing the steady deterioration in margins after the FY25 peak:
| Period | Revenue (₹ Cr) | EBITDA (₹ Cr) | EBITDA Margin | PAT (₹ Cr) | PAT Margin |
|---|---|---|---|---|---|
| Q1 FY26 | 622.50 | 145.47 | 23.4% | 96.83 | 15.6% |
| Q2 FY26 | 666.35 | 141.49 | 21.2% | 90.71 | 13.6% |
| Q3 FY26 | 550.99 | 66.73 | 12.1% | 31.70 | 5.8% |
| Q4 FY26 | 857.77 | 92.85 | 10.8% | 38.33 | 4.5% |
| Q1 FY27 | 858.67 | 93.20 | 10.9% | 51.59 | 6.0% |
Revenue in Q1 FY27 was flat versus Q4 FY26 (+0.1% QoQ) but jumped 37.9% over the same quarter last year. PAT of ₹51.59 crore improved 34.6% sequentially from the Q4 low, yet it was still 46.7% below the year‑ago figure. The management attributed the margin compression explicitly to “lower realisation, increase in raw material costs and other expenses (mainly due to higher logistics costs), owing to prevailing geopolitical tensions.”
The cost‑side pressure is visible in the annual cost structure: cost of materials consumed rose from 62.3% of revenue in FY25 to 68.7% in FY26, while employee and other expenses also edged higher. On a sequential basis, Q1 FY27 margins were broadly stable, and Chairman Dinesh Patidar noted that “we held EBITDA margins broadly stable sequentially, reflecting the resilience of our operating model and our continued focus on profitable growth.”
A ₹10,000‑crore order book and the promise of KUSUM 2.0
Despite two consecutive quarters of record revenue, the outstanding order book as of 22 July 2026 stood at approximately ₹10,000 crore (inclusive of GST), underscoring strong demand visibility. The largest components are:
- Magel Tyala Saur Urja Yojana, Maharashtra – ₹5,220 crore
- Karnataka Renewable Energy Development Ltd – ₹2,350 crore
- Madhya Pradesh Urja Vikas Nigam Ltd – ₹1,670 crore
- Other domestic & export business – ₹550 crore
- MSEDCL & MEDA (Maharashtra) – ₹80 crore
- HAREDA (Haryana) – ₹20 crore
- Others – ₹10 crore
Management expects new order inflows from PM‑KUSUM 2.0 to begin by Q2 FY27, following the Prime Minister’s recent announcement about replacing diesel pumps with solar ones. The scheme’s addressable opportunity is pegged at ₹5.5 trillion, with an estimated demand for 12–13.5 million additional solar pumps and 8–9 million diesel‑pump replacements. Shakti Pumps has already installed over 2.57 lakh solar pumps (1.90 lakh under KUSUM), giving it a ~25% market share under the central scheme.
The ₹17,000 crore capex pivot: building a margin moat through backward integration
The company is in the midst of a ₹17,000 crore phased capex plan that management expects will structurally improve margins and solidify its competitive position.
- Core capacity doubling: Pumps, motors, VFDs and structures — new capacities are expected to come online from Q3 FY27.
- 0.5 GW DCR solar module plant: Commissioning targeted by September 2026. This is seen as “a direct near‑term lever for margin improvement via reduced module dependency.”
- 2.2 GW solar DCR cell & module greenfield facility: Expected to be commissioned by FY28.
- EV motors & controllers: Cumulative investment of ₹700 crore (out of a planned ₹1,140 crore) has already been made; products are undergoing vehicle‑level trials with auto OEMs.
The backward integration is critical because domestic content requirement (DCR) cells account for 40–50% of a solar pump set’s total cost. Bringing this in‑house is expected to secure supply, optimise costs, and enhance long‑term profitability. Funding for the multi‑year programme will rely on internal accruals, the ₹2,926‑crore QIP completed in October 2025, and a strong balance sheet — the debt‑to‑equity ratio stood at just 0.3x as of March 2026, with cash and equivalents of ₹438.72 crore.
Emerging diversification: cash sales, exports, and solar rooftop
Alongside the core government‑tender business, Shakti Pumps is scaling its higher‑margin channels. Cash/retail sales contributed ₹240 crore in Q1 FY27 (up from ₹770 crore in all of FY26), and the solar rooftop business brought in ₹80 crore. Exports, which command margins approximately 10 percentage points higher than domestic, stood at ₹4,111 crore in FY26, with the Middle East (41.1%) and Africa (33.4%) as the dominant regions. Management noted that the dealer‑and‑distributor export business “has demonstrated significant traction” and that the company is part of the International Solar Alliance, which has aggregated demand for over 2.7 lakh solar pumps across 22 countries.
These segments are integral to reducing the company’s historical dependence on government tenders — which still accounted for 77% of FY26 revenue — and improving working capital efficiency, as cash sales are collected faster than tender receivables.
Market leadership in a policy‑backed, but competitive, landscape
Shakti Pumps remains India’s only fully vertically integrated solar pumping manufacturer, with in‑house production of pumps, motors, controllers, VFDs, structures, and inverters. Its ~25% share under PM‑KUSUM is anchored on this integration and a first‑mover presence across states like Maharashtra, Rajasthan, Haryana, Uttar Pradesh, Madhya Pradesh, and now Karnataka.
Competitive intensity has increased — management acknowledged that lower realisations on Magel Tyala orders had a 3–4% impact on margins — but the company is not chasing volume at the expense of margin. In Q3 FY26 it deliberately paused ₹200 crore of Maharashtra orders until payments improved, and it previously walked away from an unviable Haryana tender. “We will not work in pressure of order or top line,” Chairman Dinesh Patidar said, emphasising balance‑sheet discipline.
With a record order book, large‑scale capacity expansion, and a clear government policy tailwind, Shakti Pumps is positioned for volume growth. The key question for investors is how quickly the backward‑integration benefits — particularly from the 0.5 GW module line — will offset the external cost headwinds and restore margins toward the mid‑teens levels seen in earlier quarters.
---