Shakti Pumps (India) Limited (531431) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Shakti Pumps (India) Limited Q1 FY '23 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rohit Anand from Ernst Young LLP. Thank you, and over to you, sir.

Thank you, and good afternoon, everyone. Before we proceed, let me remind you that the discussion may contain forward-looking statements that may involve known or unknown risks, uncertainties and other factors. It must be viewed in conjunction with our businesses that could cause future results, performance or achievements to differ significantly from what is expressed in slides by such forward-looking statements. To take us through the financial results and development, and to answer your question today, we have the senior management of Shakti Pumps (India) Limited represented by Mr. Dinesh Patidar, Managing Director; Mr. Ramesh Patidar, Executive Director exports, Mr. Dinesh Patel, Chief Financial Officer; and Mr. Ravi Patidar, CS and Compliance Officer. This is [indiscernible] a brief overview of the past quarter and Mr. Dinesh Patidar followed by a Q&A session. I will hand over the call to Mr. Patidar. Over to you sir.

Thank you, Rohit. [Foreign Language]. Shakti Pumps (India) Limited Quarter 1 [Foreign Language] 63% growth [Foreign Language]. Last year, [Foreign Language] 32,757 pumps installed [Foreign Language]. EPC solar business [Foreign Language] INR 79 crores [Foreign Language]. Export was [Foreign Language]. About the [Foreign Language] and R&D [Foreign Language] last year first quarter, 27% margin [Foreign Language]. Over to Dinesh Patel.

Thank you, sir. Good afternoon, everyone. Moving on to the financial highlights. The company reported a consolidated revenue of INR 255 crores in Q1 FY '23, a 62.8% Y-o-Y growth as compared to INR 156 crores in Q1 FY '22. EBITDA at INR 21 crores was up by 69.2% year-on-year basis as against INR 13 crores in Q1 FY '22. EBITDA margin was 8.4% during the quarter. Going forward, margins are expected to improve on account of increase in exports and retail revenue contribution in the overall revenue mix. Softening of raw material prices will also add in margin improvement. PBT grew by 81% Y-o-Y to INR 12 crores from INR 7 crores in FY '22. [ Debt ] for the year was INR 9 crores as compared to INR 7 crores in Q1 FY '22 and 19.8% Y-o-Y growth. The growth during the quarter was muted on the account of negative tax expense due to tax reversal in Q1 FY '22. This is all from my side. With this, we can now open the floor to question and answer session.

[Operator Instructions] The first question is from the line of Nirav Asher from LM Securities.

Good afternoon, sir. Congratulations on good set of numbers. I have 2 major questions. First is on the demand side for KUSUM 2.0, how is the demand presently and whether we can meet up the demand, which we have?

Yes, [Foreign Language] very clear [Foreign Language] program [Foreign Language].

Sir [Foreign Language]

[Foreign Language]

And we are getting good orders from the nearby states Rajasthan, MP?

Yes. Rajasthan, MP, Haryana, Punjab, Maharashtra.

And now since the metal prices have gone down, the supply side margin pressure [Foreign Language] going ahead? What do you think?

Yes, yes. [Foreign Language].

So what margins can we expect going ahead maybe for the full year?

Yes, [Foreign Language] last quarter, last quarter [Foreign Language].

Okay sir. [Foreign Language] question. Is there any issue related to the payment from the street and central government? As I can see that interest percentage has gone up in this quarter.

Yes. Because see [Foreign Language].

Okay. And sir, can you please tell us about the solar panel prices, how it is right now, whether it is gone down or not?

Solar panel [Foreign Language].

And what is the revenue and margin guidance for the full year?

[Foreign Language]

And revenue growth what can be...

[Foreign Language]

All the best sir.

The next question is from the line of Ankit Shah from JHP Securities Private Limited. Your line is unmuted. Please go ahead.

Am I audible now?

Yes, sir, please proceed.

I have couple of questions. 2003 like 70,000 pumps, but the execution level is quite low. Any reason for delaying execution under both the schemes?

Yes, Actually, [Foreign Language].

Sorry, I didn't get to your last point.

[Foreign Language]

[Foreign Language] And my second question is in the statement of Rajasthan, Gujarat and MP. Farmer share in KUSUM scheme is quite high as compared to other state. So how is the demand scenario in such states? And are farmers ready to pay that much share?

[Foreign Language]

[Foreign Language]. Okay. Third question, [Foreign Language].

[Foreign Language].

Okay. [Foreign Language] price hike [Foreign Language].

[Foreign Language].

[Foreign Language].

[Foreign Language].

[Foreign Language] compared to KUSUM 2 [Foreign Language]?

Yes, yes, yes.

[Foreign Language].

[Foreign Language].

[ Hello ]? [Foreign Language].

[Foreign Language].

[Foreign Language].

[Foreign Language]

The next question is from the line of Forum Makim from Equity Capital.

Sir, in the previous quarter [Foreign Language] 9,000 pumps [Foreign Language] and what is the reason for that?

[Foreign Language] 6,000 pumps installed [Foreign Language] Total KUSUM 2 [Foreign Language] 32,757. [Foreign Language].

Right. So sir, what is the reason [indiscernible] slow implementation [Foreign Language].

Yes, yes. [Foreign Language].

[Foreign Language]

[Foreign Language]

Okay. [Foreign Language]

Yes. Yes, [Foreign Language].

So in next quarter, the [Foreign Language]

[Foreign Language] Q1 [Foreign Language] -- so if the Q1 [Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language] top line there or bottom line [Foreign Language] .

[Foreign Language] presentation, you mention here FY '24 [Foreign Language] 3.5 lakh pumps [Foreign Language] to 4 lakh pumps [Foreign Language] like what is the visibility? What is the conviction that we have already implementation, [Foreign Language]

[Foreign Language]

[Foreign Language] timeline [Foreign Language]

[Foreign Language]

Okay, sir. [Foreign Language].

[Foreign Language]

[Foreign Language]

[Foreign Language]

Sorry?

[Foreign Language] .

The next question is from the line of Hardik Vyas from Economic Times.

[Foreign Language]

Sorry to interrupt Mr. Vyas. We're not able to hear you clearly. Your audio is running very soft.

Hello, can you hear me now?

No, sir. It is still sounding soft.

Can you hear me now?

No sir, I'll request if you use the handset mode while speaking and on the speaker phone.

Hello, can you hear me now?

Sir, it's still sounding very soft.

Hello?

Sir, please proceed.

Can you hear me now?

Yeah. Much better.

I wanted to ask, sir, [Foreign Language]

INR 175 crores.

INR 175 crores, [Foreign Language]

[Foreign Language]

[Foreign Language] that is nonsolar domestic business that we have.

Yes, you can say like that. It's [Foreign Language].

[Foreign Language] last quarter.

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language] 50% roughly.

[Foreign Language] 46% of our market share, right? [Foreign Language].

[Foreign Language] remaining 3 quarters. What is the guidance in the number of pumps that are likely to be installed? The last [Foreign Language] install [Foreign Language]

Yes, yes. [Foreign Language] 46% market share [Foreign Language]

Okay. The exports apart from Africa [Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

Yes.

Solar panel prices, sir, [Foreign Language] 20, say, 24 last quarter at those prices are at 24 only [Foreign Language]

[Foreign Language]

[Foreign Language]

Yes. [Foreign Language]

Thank you so much. That's all from my side and all the best.

Thank you, Hardik. Thank you. Thank you very much.

The next question is from the line of Ajay Jain an Investor.

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language] Economic Times [Foreign Language]

[Foreign Language] without mentioning the numbers. [Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language] Because we as investors want to know [Foreign Language]. Basically, this company [Foreign Language]. We are also basing our foresight and forecast on KUSUM. So [Foreign Language] KUSUM's Scheme. [Foreign Language]

Then definitely, [Foreign Language]

[Foreign Language] at the investor.

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language].

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

Sir, in addition [Foreign Language].

I agree [Foreign Language] Government of India [Foreign Language] -- those are all issues which have to be addressed by the company. Am I right?

That's right, right.

[Foreign Language]

[Foreign Language]

[Foreign Language]

The next question is from the line of Sanjay Kumar from [ IPO BMS ].

Hello?

[Foreign Language] .

Just an extension to the previous question, say we have [indiscernible] we had -- I think we had given an order to KSB in the last quarter or the previous quarter. Are we outsourcing some of the pumps to KSB? Can you give the number for this quarter and will it continue?

[Foreign Language]

KSB. [Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

I think around 5 crore of order was from Shakti Pumps.

This is 100% lies. [Foreign Language]

Okay, sir. And just another question for tracking. Where do we buy our panels from which supplier?

Yes, [Foreign Language] domestic manufacturer [Foreign Language]

We'll move on to the next question that is from the line of Anurag Patil from Roha Asset Managers.

Thank you for the opportunity. Sir, Q1 [Foreign Language]

[Foreign Language] working capital [indiscernible] requirement [Foreign Language]

[Foreign Language] term loan [Foreign Language] INR 14.5 crores [Foreign Language] working capital utilization in INR 226 crores.

INR 226 crores. So [Foreign Language] INR 102 crore Q4 end basically, right? Total debt. [Foreign Language], am I correct in saying?

[Foreign Language] because of raw material capability [Foreign Language].

[Foreign Language] annual basis?

[Foreign Language]

Okay. [Foreign Language]

[Foreign Language]

So sir, [Foreign Language]

[Foreign Language]

The next question is from the line of Senthil Kumar from [ Joindre ] Capital Services Private Limited.

Hello? Am I audible?

Yes.

Thanks for the opportunity. But I just want to know what is the [ debt ] beyond 6 months as a percentage of total receivables?

[Foreign Language]

Sorry. Sorry, I don't know Hindi.

Question repeat, [Foreign Language]

I just want to know what is the [ debt ] beyond 6 months as a percentage of receivables.

Beyond 6 months [Foreign Language]

Hello?

[Foreign Language] right?

Okay, sir, okay. I have another question, so the revenue mix in the presentation, the contribution has decreased from 20 percentage in FY '18 to just 3 percentage in FY '22. Can I have the reason for that? OEM contribution.

Can you please repeat your question again?

The revenue contribution, the OEM customers contribution, it was 20 percentage in FY '18, it was decreased to 3% in FY '22. What is the reason? [indiscernible] in that?

From which, from which [indiscernible] you are asking?

No. I'm asking from the presentation you have given in the Slide #9.

OEM contribution?

Yes.

OEMs customers' contribution. It has decreased to 2.63 percentage.

Decreased to the 2.63%?

Yes, perfectly right, 20% to 3%. This is OEM business. Strategically, we have decided to not sell OEM. We are doing directly EPC project in [indiscernible]. So this is a company policy. We have decided to not sell its OEM business, right?

The next question is from the line of Akshay Kothari from Envision Capital.

Thank you for the opportunity. Sir, [Foreign Language]

[Foreign Language] 30%, 35% [Foreign Language] state minimum 30%. [Foreign Language].

Thank you and all the best.

The next question is from the line of [ Rahul G ] from BR Investments.

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

The next question is from the line of Keshav Kumar from RakSan Investors. Keshav, your line is unmute, please go ahead.

Hello. Am I audible?

Yes, sir, please proceed.

Yes. So the INR 200 crores order book [Foreign Language]?

This is only KUSUM order book.

Okay. Sir. Okay. [Foreign Language].

100% KUSUM.

So INR 175 cr 6,000 pumps [Foreign Language] roughly realization [Foreign Language] INR 2.9 lakhs and INR 200 crores for 9,000 pumps, the realization comes down to INR 2.2 lakhs. So difference [Foreign Language]

[Foreign Language]

[Foreign Language] Middle Eastern Market used to be very big -- or we are seeing resurgence of crude [Foreign Language]. The prices are coming down, but structurally if the global economy stays stable, we don't have any supply side indication [Foreign Language] crude price [Foreign Language].

Export business [Foreign Language]

[Foreign Language]. If crude does well their economy depends on it, [Foreign Language]. They also go for more solarization [Foreign Language] going forward. Are we looking in that direction [Foreign Language]?

Yes, yes, right. [Foreign Language]

Okay, sir. Sir, last question. [Foreign Language].

[Foreign Language].

The next question is from the line of Sunil Ahuja from [ S Ahuja ] Consultant.

Good evening. [Foreign Language] 25%, 30% [Foreign Language] sequential growth [Foreign Language] year-on-year growth?

Year-on-year growth [Foreign Language].

So year-on-year growth [Foreign Language], you are not expecting a good growth. [Foreign Language]. All the quarters will be almost muted. [Foreign Language].

[Foreign Language].

[Foreign Language].

[Foreign Language].

[Foreign Language].

Sorry to interrupt sir. The lines for the management has disconnected. Please stay connected while we reconnect the management team. Ladies and gentlemen, thank you for patiently holding. We now have the lines of the management reconnected over to you, sir.

Yes. [Foreign Language].

[Foreign Language]

[Foreign Language]. That means the whole year that the three quarters will be muted. [Foreign Language]. So it's not, whatever you are saying it is not adding up. That is the problem you know I'm facing. I have to check through my people who are [indiscernible].

[Foreign Language]

[Foreign Language] year on year. If it's sequential growth [Foreign Language]

[Foreign Language]

Sir, I'm not doubting. Sir, I'm not doubting. You are a very big company. I'm not saying about that. [Foreign Language] 25%, 30%, whether it is sequential growth, quarter-on-quarter, [Foreign Language] last quarter, [Foreign Language] in March quarter. So sequential growth [Foreign Language] 30%. Supposed [Foreign Language] Then the figure will come out different. [Foreign Language] sequential growth 30% [Foreign Language], then it is a different figure -- total yearly figures. But if you are talking about that year-on-year figures, then it is not adding up, whatever you are saying [Foreign Language] 3 quarter up [Foreign Language]. Suppose you are going to give an annual 25% to 30% growth. [Foreign Language] 25%, 30% growth [Foreign Language]. That is my question. My question is if it is on year-on-year growth [Foreign Language] which happened only at the highest price of the raw materials, the margin [Foreign Language]. Am I clear to you?

[Foreign Language] INR 150 crores quarter [Foreign Language].

Correct.

[Foreign Language] September.

Correct.

Correct. [Foreign Language], plus 30% year-on-year basis [Foreign Language]

[Foreign Language]. I'm not doubting. I'm not doubting. [Foreign Language] exactly. If you're under pressure, want to face the truth that's a different issue. [Foreign Language] My question is as a investor and as a [indiscernible] to some people, I want to know [Foreign Language] sequential growth [Foreign Language] 30% [Foreign Language] suppose second quarter [Foreign Language]

Yes. [Foreign Language]. So quarter-on-quarter [Foreign Language].

Ladies and gentlemen, that is the last question. I now hand the conference over to Mr. Dinesh Patidar for his closing comments.

Thank you very much. [Foreign Language]. Thanks. Thank you very much.

Thank you. Ladies and gentlemen, on behalf of Shakti Pumps (India) Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines. Thank you.