Posted on March 6, 2025, by Niftynews
Shares of Shakti Pumps, a leading manufacturer of pumps, motors, and spare parts, surged to a 5% upper circuit for the second consecutive day on March 6, 2025. The rally follows the company securing a ₹24 crore order from the Maharashtra Energy Development Agency (MEDA) for the supply of 877 Solar Photovoltaic Water Pumping Systems (SPWPS) under Component-B of the PM-KUSUM scheme. The news has sent the stock to ₹874 per share, marking a significant rise in its valuation.
Shakti Pumps’ Growing Role in Solar Solutions
Shakti Pumps has established itself as a prominent player in the solar pump market, and this latest order strengthens its position within the renewable energy sector. The PM-KUSUM scheme, which promotes the use of solar-powered water pumps in the agricultural sector, aligns well with Shakti Pumps’ product portfolio. The company will be responsible for the design, manufacturing, transportation, installation, testing, and commissioning of these 877 solar-powered systems across Maharashtra, which is a significant undertaking.
The order comes with a 120-day deadline for completion, reinforcing Shakti Pumps’ ability to execute large-scale projects within tight timelines. This project is a part of the government’s broader initiative to promote sustainable energy solutions in rural and agricultural areas. The company’s expertise in solar pumps and renewable energy solutions has made it a preferred choice for government projects, which is evident from the scale of the current order.
Strong Financial Growth and Performance
Shakti Pumps’ impressive stock performance also comes on the back of strong financial results for the third quarter of FY25. The company reported a 130% year-on-year (YoY) increase in its net profit, which reached ₹104 crore. This is a significant jump compared to the previous year, showcasing the company’s ability to grow both its top and bottom lines.
Revenue from operations also grew substantially, rising by 31% YoY to ₹648.8 crore, driven by robust demand for its core products like engineered pumps, industrial pumps, and solar pumps. The company’s consistent performance in delivering high-quality products has enabled it to secure large contracts, contributing to its strong revenue growth.
A Solid Order Book and Future Expansion Plans
As of December 2024, Shakti Pumps had a healthy order book worth ₹2,070 crore, which includes several significant contracts. One of the major contracts in its portfolio is a ₹754.3 crore order under the Magel Tyala Saur Krushi Pump Yojana in Maharashtra, which aims to provide solar-powered pumps to the agricultural sector. This large order book ensures the company’s continued growth and highlights its strong foothold in the renewable energy sector.
Looking ahead, the management is optimistic about the company’s future prospects, especially in the electric vehicle (EV) market. Shakti Pumps is investing in research and development (R&D) for electric controllers and motors, which could enable it to diversify its product offerings and tap into the rapidly growing EV market. The company is also planning to establish a solar module manufacturing plant to streamline supply chains and scale up production.
These investments and expansions will help Shakti Pumps capture a larger market share in the growing solar energy and electric vehicle sectors, positioning it for long-term success.
Targeting 25% Growth and Capital Expansion
Shakti Pumps has set an ambitious target of achieving at least 25% growth in the upcoming year. To achieve this, the company plans to raise ₹400 crore through a Qualified Institutional Placement (QIP). This capital will be used to expand the company’s production capacity, enabling it to take on more large-scale projects and meet the growing demand for solar-powered pumps and other renewable energy solutions.
Outperforming the Market
In the last three months, Shakti Pumps has outperformed the benchmark Nifty 50 index, which has declined by 9% during the same period. Shakti Pumps’ stock price has surged by 14% in the same timeframe, highlighting the growing investor confidence in the company’s strong performance and promising prospects.
The recent 5% upper circuit rallies are a clear indication of the market’s positive sentiment towards the company. With its strong financials, growing order book, and plans for expansion, Shakti Pumps is well-positioned to continue its upward trajectory.
Conclusion: A Bright Future for Shakti Pumps
Shakti Pumps’ recent stock surge, backed by a ₹24 crore MEDA order and solid financial performance, underscores its strong position in the renewable energy sector. With a robust order book, plans for expansion into the electric vehicle market, and continued growth in solar energy solutions, Shakti Pumps is poised for long-term success. The company’s focus on innovation, high-quality products, and strong execution capabilities will likely continue to drive its growth, making it an attractive stock for investors looking for exposure to the renewable energy space.
As the company continues to expand its capabilities and secure large contracts, Shakti Pumps is likely to remain a key player in the solar pump and renewable energy sectors, contributing to the country’s sustainability goals while offering substantial returns to its investors.
