Oswal Pumps Limited reported its Q1 FY27 results, with revenue from operations declining by 7.9% year-on-year to INR474 crore. EBITDA stood at INR82 crore, with a margin of 17.1%. The company cited competitive bidding, diversification efforts, and elevated input costs for the margin pressure. Despite these challenges, Oswal Pumps maintains its full-year revenue growth guidance of 20-25% and EBITDA margin guidance of 15-17%.
Oswal Pumps Ltd. Q1 FY27 Earnings Call Highlights
Financial Performance and Margin Pressure
Oswal Pumps Limited commenced FY27 with continued order book execution amidst a competitive tender pricing environment. For the quarter ended June 30, 2026, revenue from operations stood at INR474 crore, marking a 7.9% year-on-year decline and a 7.1% sequential decrease over Q4 FY26.
EBITDA for the quarter was reported at INR82 crore, with a margin of 17.1%. Operating EBITDA was INR74 crore, translating to a margin of 15.7%. The reduction in margins was attributed to three key factors:
- Industry-wide competitive bidding under the Magel Tyala scheme, leading to a 9% reduction in realization.
- Diversification into module sales through the channel.
- Elevated input costs stemming from the ongoing geopolitical situation.
These impacts were partially mitigated by focused cost and value engineering initiatives. However, gross margin declined by 548 basis points sequentially, and operating EBITDA margin moderated by 747 basis points quarter-on-quarter due to the fall in gross margin and an increase in employee cost benefit expenses.
Order Book and Business Diversification
The company’s pump order book stands at 22,025 pumps, with a near-term pipeline of approximately 12,500 pumps across various government schemes and export orders. Order book across rooftop solar, utility, and C&I solar EPC segments stands at approximately 72 MW, with a wider pipeline of 359 MW.
To sharpen execution in growth avenues, a dedicated vertical, PM Surya Ghar, has been created. The company is also introducing wires and cables, and is actively diversifying its business beyond solar pumping to reduce dependability on any single scheme.
Capital Expenditure Plans
Capital expenditure plans include the expansion and automation of the pump and motor plant, with completion expected by Q3 FY27. The solar module plant expansion, comprising 1 GW of module capacity, is expected to be completed by the end of the second quarter.
Financial Highlights for Q1 FY27
PAT for the quarter ended June ’26 was INR54 crore, with a PAT margin of 11.2%. Net debt stood at INR266 crore, resulting in a net debt-to-equity ratio of 0.15x. The cash conversion cycle increased to 244 days, primarily driven by higher receivable days (229 days) due to delays from state nodal agencies. The company reiterated that these receivables are from government and government-backed counterparties and are secure.
Outlook and Guidance
Oswal Pumps anticipates a back-ended growth profile for the year, supported by the execution of PM Surya Ghar and other solar EPC projects. The company expects a sustained growth momentum of 30% to 40% in the medium term beyond FY27.
For FY27, the company maintains its guidance of overall revenue growth of 20-25% over FY26. The projected operating EBITDA margin for FY27 is in the range of 15% to 17%, and PAT margin is expected to be between 11% to 13%.
The company is also targeting approximately 2,00,000 households under the PM Surya Ghar scheme for FY27, with an estimated revenue contribution of INR800 crore to INR1,000 crore from this initiative. While the profit margin for PM Surya Ghar may not match that of PM KUSUM, it is expected to significantly increase business, revenue, and opportunities. The company is also bringing wires and cables to its distribution channels, leveraging existing capacity.
Regarding the launch of PM KUSUM 2.0, the company is awaiting government announcements and is cautiously optimistic about its rollout, possibly by Q2. The potential launch of PM KUSUM 2.0 is expected to help stabilize margins and improve the competitive landscape.
Source: BSE
