Call was rep byDinesh Patidar, CMD, B R Patidar, Director-Finance, Ramesh Patidar, Director-Exports. Highlights of the call by Capital Mkt:
Shakti Pumps is a leading manufacturer of 100% stainless steel submersible pumps in India with exports to over 100 countries.It reported total revenue of Rs 85.23 crore for the quarter ended December 2014 a 53.0% QoQ growth. Net Profit stands at Rs7.64 crore registering a growth of 128.7% QoQ.Revenue up by 5.5% YoY at Rs 85.23 crore compared to Rs.80.76 crore last year. EBIDTA up by 16.5% YoY at Rs 15.78 crore.
Sales from Europe stood at Rs 6 crore during the quarter, sales from Africa stood at Rs 14 crore and sales from Asian countries stood at Rs 16 crore and from USA stood at Rs 11 crore.In recent years it has forayed into the domestic markets. Domestic sales were up 108% YoY.PAT up by 20.3% YoY at Rs 7.64 crore as against Rs 6.40 crore
Traditionally, the company has done well in the second and third quarter but this time it is especially pleased with its performance as it came in the face of a strong monsoon deficit in India.The export performance has also been satisfactory given the uncertain global economic climate.
Nine months revenue grew 1.0% at Rs 210.64 crore as compared to Rs 208.60 crore last year.EBIDTA grew 11.4% at Rs 39.53 crore as against Rs 35.49 crore.PAT grew 4.9% at Rs 17.79 crore as against Rs 16.95 crore.The company exports its products to over 100 countries with the number steadily growing.In 9 Months sales from Europe grew 82%, America grew 69%, Africa grew 30%, Fiji 100%.In next 2-3 quarters sales from Gulf region is expected to improve.
The government initiatives like Swachh Bharat Abhiyan, Ganga Cleaning project, River connecting projects and initiative towards solar energy and energy efficiency will lead the sector with a positive growth
The company’s plans to expand into new geographies and tap new markets is on track. It is also strengthening its brand further and has renewed the contract with Amitabh Bachchan as the brand ambassador this quarter.
The promoters had 55% of shares mortgaged with the bank long back. The bank has now released 2000000 shares so now it has 25% of shares mortgaged. It hopes to release this also soon.Domestic sales in Q4 is expected to be at Rs 66 crore.
Industrial pumps account for around Rs 9 crore of sales in 9 months. This segment has good scope and the company is also focusing on this segment as once it becomes established then they get auto generated orders from the OEMs.The company is still in entry level in the Industrial pumps business.
The central government has planned to install 1 lakh solar pumps. Rajhasthan government plans to install 5000 solar punps, Gujarat government has given orders for 1000 solar pumps and currently negotiations are on. In Tamil nadu the company has already supplied 1000 pumps thru Jain Irrigation, its OEM.The company has 98% market share in Solar pumps business.
The cost of solar pumps is Rs 43000 (which it supplies to its OEMs like Tata BP, Jain Irrigation etc). On the other hand complete installation costs Rs 6.10 lakh.NABARD has come out for orders of 60000 pumps out of which funds has been transferred for 30000 pumps. Cost of each pump is Rs 35000 so there is an potential order of Rs 210 crore.
The Pumps made by the company perfectly fits in the Solar vision of the current Indian Government. The company feels that this is the best and pro active government.
Capacity is 525000 pumps. It is currently operating 50-55% capacity in 2 shifts. Thus the company does not envisage any expense for capacity increase.In Q4 it expects Rs 54 crore will come from exports and Rs 66 crore from domestic business.Steel price has not fallen much so no impact to the company of the falling commodity prices.
The company expects Rs 500 crore of sales in FY 2016 which will be equally divided by domestic and export business. The company has not taken into account any business from the Solar pumps as this is a tender based business and little delay in the same will put the company’s projections haywire.Advertisement expense is expected to be 8-9%.
The company has 325 exclusive dealers. It works only with exclusive dealers. It plans to increase this to 500 in FY 2016.