Annual diesel consumption for 7 HP agriculture pump at current diesel pricing will be around Rs 50000. Apart from this it also increases pollution and leads to increase in Crude import bill. The farmers can earn additional revenue during idle time.
There are around 5 to 6 million diesel pumps and make sense for the farmers as well as government (to subsidize Solar pump ) for replacement of existing diesel pumps.We may see a good traction in this area in future.
Concal Summary:
Sales of the company were as per expectation, however margins have been impacted due to increase in commodity price. Management has moderated the sales target from Rs 2000 Cr annually to Rs 1500 Cr. Margin improvement during second half year seems to be less as commodity prices are expected to remain at elevated level. As per management the current KUSUM tenders have been quoted 9 months back without taking into consideration the increased commodity price because of which the supply under the current tender will fetch less margin.
Disclosure : Partially booked profit.
I think there is a lot of uncertainty involved with this company and this management leading to such cheap valuation. As I referred to in one of my previous posts, if Tata Power aims at 13x topline growth in next 5 years, we can be damn sure about the industry. And Shakti being a comparable player, I think Shakti can easily 6x their revenues even if we leave out some of the market share losses which generally happens in such rapidly growing markets. Their high margins ain’t sustainable too in my opinion since there will be intense competition coming in from module companies forward integrating into the pumps. Their NPM are already at 5%, and even if they stay around this even with increasing realizations in next KUSUM, they could be easily looking at more than 250 cr profit. And if KUSUM comes, and starts showing up in their numbers, markets might rerate them too.
Lot of Uncertainty, but very less Risk.
Hi Everyone. Recently I started following Shakti Pumps stock. I tried to listen to their recent earnings concall but the management seems to be conducting it in Hindi. Although I can understand the language, even the numbers are being presented in Hindi which makes it even more difficult for me. If someone can share the earnings call transcript (English), it would be helpful. Thanks in advance.
Company at a given time during FY claims to be on path to clock 2000+ cr revenue and then downgrades to 1500 odd and what next now --are we reaching 1200 cr
Walk the talk is missing or external factors or management having serious issues on which is the right path as they also announced EV domain work
KUSUM 2 tender is for 3,17,000 pumps.
My understanding is that shakti has a 40% market share in that, which is roughly 125000 pumps.
Assuming a realisation of 2.5 lakhs per pump, the total sales should be upwards of 3000 crores.
The sales for the first three quarters of FY’22 stand at 900 crores.
What am I missing here?
KUSUM 2 tender got stuck in court, then got cleared later but govt did not proceed with tender so far, for reasons not clear to me. Instead govt is currently doing an extended run of KUSUM 1.
It’s getting a bit confusing for me and some other members too. Can anyone properly make a differentiation on KUSUM 1 and 2 and how KUSUM 2 will make a lot of difference compared to extended KUSUM 1?
