Published: 01st July 2024
Shakti Pumps’ Q4 FY24 net profit, which shot up 45 times YoY to Rs 90 crore, may have you believe the company struck a jackpot! You may not be entirely wrong.
Besides a low base, the meteoric jump came from its solar pump business wherein it bagged large orders from the government under the ‘PM KUSUM’ scheme.
It had its eyes on the opportunity since the scheme’s launch in 2019 itself. It sharply drove innovation to become the leader under the scheme with 25% market share as of Q4 FY24.
With a total order book of Rs 2,500 crore, it has clear revenue visibility for next 18 months. It further expects to raise its annual revenue to Rs 7,000 crore in the next 2-5 years!
Further, the company is valued quite attractively with a m-cap/EBITDA ratio of just 7 times. But, every prize has its price.
Its prospects are solid. But the industry’s nature risks denting the company’s growth streak, evident from its falling market share. Read the pitfalls from the link below.