If there is shortage of DCR panels in the market then why they are steeping into residential rooftop solar segment through pm surya ghar yojna.
In this segment, DCR panels are more required compare to solar pumps.
Manufacturing capacity of DCR panel’s is increasing 100%YoY
I am actively tracking solar EPC companies I haven’t heard anything about this issue in their confrence calls
DCR panels required as a raw material in rooftop solar segment - 99%
In solar pumps - 75%
Disc- invested.
trying to understand overall situation
One more thing which needs an explanation is they are setting a solar cell line but no solar module capacity.
With whom they will be partnerning to convert the solar cells to solar module , again it does not lead to not complete backward integration as there will be a third party dependancy.
While margins are less in solar module could be one of the reasons but just setting up a cell line will not address their complete backward integration and they will still have to send it to someone else to get the module
If there is shortage of DCR panels then practically is should have affected the margins.
Because more demand less supply lead to increase in prices of raw materials but in this case it is opposite.
Material cost is at all time low of 61% in overall expenses
March 2022 - 78% of overall expenses
March 2023 - 74% of overall expenses
March 2024 - 64% of overall expenses
December 2024 - 61% of overall expenses
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.
In the recent conference call, there was a question on working capital.
The management stated about getting 90% of the funds pretty soon but the remaining 10% gets delayed based on the farmer’s use (when she/he starts using it) - and this 10% takes close to 180-200-250 days.
State achieves its 100-day target of setting up solar pumps in 60 days
Mumbai : The Maharashtra govt has achieved its target of installing 52,705 solar pumps within 100 days under the ‘Solar Pumps for Farmers on Demand’ scheme in just 60 days, Maharashtra State Electricity Distribution Co Ltd (MSEDCL) managing director, Lokesh Chandra, said on Wednesday. “Against the target of 52,705 pumps, MSEDCL installed 53,009 in 60 days,” he said. When CM Devendra Fadnavis took the oath on Dec 5, 2024, he set 100-day targets for departments to be achieved by March 16, 2025.
In the state scheme, the Centre provides 30% subsidy and the state 60% subsidy, allowing farmers to receive solar panels and pumps at 10% of the cost. For farmers from Scheduled Castes and Scheduled Tribes, the beneficiary share is 5%, with a 95% subsidy. — Somit Sen
They are mostly doing it to reduce their dependence on the external suppliers for the Solar Panels, since that is half of their topline, if they manufacture it themselves, then it should essentially improve their margins, and also give them more control on the whole supply chain dynamics of solar pumps. I think it is a good move, but only till they keep getting the high margin Solar Pump orders, either from B2G or the B2C or the Export segment.
As per management in conference they were referring to erratic supply of solar cells and their dependence on others for the same. Solar cells as per them we there real road-block in coming months for increasing revenue. Not only will this solar cell facility increase margins, it would ensure greater revenues for pumps as well. Their primary intention to to feed themselves with solar cells they produce rather than become producers for others.
Sahaj Solar posted a really good set of numbers, lately they have been getting good Solar Pump orders, which has also led to a sharp increase in receivables. Can Shakti Pumps follow and post another quarter of growth?
They had guided for 600 cr revenue this quarter if I recall correctly. However there has been buying by promoter which might or might not be a signal for over delivering.
Order inflow has substantialy reduced. Maharashtra govt has delay payment issues which can substantially increase the receivables.
Valuation seems stretched .
SBI mutual fund the first entrant has completely existed and retial participation has increade by 4 times in last year. Perfect example of distibution.
Retail investor number
March 2024 52,943
June 24 70,190
Sept 24 96,955
Dec 24 1,53,361
March 24 1,98,924
There might be some consolidation in revenue growth for the upcoming quarters. As per the last concall, there is a shortage of dcr cells. We will need to see what is the current state of orderbook and the expectations of new orders in FY26. In the last concall, management had expressed confidence around new order replinshmemt, but considering the nature of business and the current revenues being based on Kusum B, caution is warranted. Commentary on the EV business would be important as well. I believe that is why is the stock has dropped to around a p/e of 26. Unless they start taking big hits on margins, there aren’t any big reasons to worry.
