Shakti Pumps’ Q2 FY25 profits skyrocket by over 1,600% – Huge 5:1 bonus share issue announced

Shakti Pumps (India) Limited has unveiled its financial results for the quarter ending September 30, 2024, reporting stellar growth figures across its revenue, profit margins, and earnings per share. The company, widely recognized for its energy-efficient stainless steel solar pumps and submersible solutions, posted a 315.4% year-on-year surge in revenue for Q2 FY25, hitting ₹634.6 crore, compared to ₹152.8 crore in the same quarter last year.

The remarkable results were accompanied by a record profit after tax (PAT) of ₹101.4 crore for Q2 FY25, marking an impressive 1,633.3% increase over the ₹5.9 crore earned in Q2 FY24. The first half of FY25 also showcased a notable growth trajectory, with a consolidated revenue of ₹1,202 crore, representing a 352.2% growth compared to the first half of FY24.

A Game-Changing Performance in Q2

Shakti Pumps’ Chairman, Dinesh Patidar, attributed the strong quarterly results to efficient execution of orders and substantial economies of scale, which significantly bolstered profitability. Patidar noted that order inflow remains solid, with a backlog of orders valued at around ₹1,800 crore as of September 2024. He emphasized that the company’s leadership role in the PM KUSUM scheme has catalyzed consistent growth, with further orders anticipated to fuel sustained performance.

The company’s EBITDA for Q2 FY25 surged to ₹148.7 crore, a notable 878.4% growth compared to ₹15.2 crore in Q2 FY24, lifting EBITDA margins from 10% to an impressive 23.4%. In H1 FY25, Shakti Pumps recorded an EBITDA of ₹284.6 crore, maintaining a strong margin of 23.7%.

Financial and Strategic Highlights

Shakti Pumps announced a 5:1 bonus share issue, offering shareholders five fully paid-up equity shares for each existing share held, signaling confidence in its financial health and long-term growth potential. Additionally, the company was awarded its 15th patent for groundbreaking sensorless motor drive technology, underscoring its commitment to innovation.

Mr. Ramakrishna Sataluri, a seasoned expert with over 37 years in the industry, joined the board as a Non-Executive Non-Independent Director, adding depth to the company’s leadership. His background, including years at Tata Power Solar, is anticipated to further strengthen Shakti Pumps’ strategic positioning in both domestic and global markets.

Expert Analysis: Long-Term Growth Trajectory and Strategic Expansion

Financial experts see Shakti Pumps’ Q2 performance as a testament to its robust business model, bolstered by strong order execution and cost efficiencies. Analysts highlight that the PM KUSUM scheme remains a critical growth driver, providing a steady demand for solar pumps in rural areas. Experts also note that Shakti’s move to expand its presence in the retail and electric vehicle sectors could diversify revenue streams and support resilient growth.

As the company continues to capitalize on economies of scale and technological innovations, analysts project a favorable outlook, with expectations of sustained revenue growth and strong profitability. With its emphasis on backward integration and in-house manufacturing capabilities, Shakti Pumps is strategically positioned to meet increasing demand in energy-efficient pumping solutions.

Financial Snapshot

Shakti Pumps’ recent performance has caught the attention of the market, with the stock rallying amidst optimistic sentiment surrounding its Q2 results. The company’s share price has shown positive movement in response to the robust earnings and bonus share announcement, which are expected to fuel further interest from investors.