Hey friends, I have recently exited totally from Shakti pumps after con call. It was my first share and having highest allocation in my portfolio, and I think I am the much fortunate that it was tern into aprox 10x multibagger for me within 2.5 years of time. I exited due to following reasons:
1- little to no flow of tender in PM Kusum scheme as half of the pump already installed and remaining pump is already allocated to agency including Shakti Pumps. So, flow of tenders is meager now under component B.
2- Component C (having large budget) is solarazation at fedder level is out scope for Shakti Pump as of now. Companies involved in manufacturing Solar panels such as Servotech, Waarree, Onix and other are getting order at present. and Shakti is not a part of it.
3- In Component C (IPS), Shakti can participate (like Ajamer Project), but it has little allocation of pump.
4- Maharastra order (total 1200 Cr) was letter of enpenlment, not a order (which was accepted by management in recent concall, in earlier concall management consider empanelment as order only). will this amount converted 100% in order? (I don’t think so). Because, selection of pump is under farmers choice not Govt.So, I assume 25-30% market share from maharastra order. (I may be completely wrong)
5- Other business like EV are still in child phase, not part of large revenue.
6- jumping in solar cell manufacturing is need much capex and long time to go live (3 to 5 years).
7- execution may be slow some what due to slow supply of solar panel (which may be true, I heard it in servotech concall also)
So, considering all above factors I feel no growth/degrowth for small to medium term time frame. And Shakti became 10 X multibagger for me, I decided to exit. It was very difficult decision for me. I am very emotionally attached with it. Definitely I’ll miss it in my portfolio. I will track it always for next cycle and right opportunity.
Disc- above information is my observation only which may be biased. Its not a recommendation.
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