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

Ladies and gentlemen, good day, and welcome to the Q2 and H1 '25 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, Mr. Rohit Anand.

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 business risk that could cause future results performance or achievements to differ significantly from what is expressed or implied by such forward-looking statements. To take us forward through the financial results and development and to answer your questions today, we have the senior management of Shakti Pumps India Limited represented by Mr. Dinesh Patidar, Chairman; Mr. Ramesh Patidar, Managing Director; Mr. Dinesh Patel, Chief Financial Officer; and Mr. Ravi Patidar, CS and Compliance Officer. We will start the call with a brief overview of the past quarter by Mr. Dinesh Patidar followed by a Q&A session. I will now hand over the call to Mr. Patidar. Over to you, sir.

Thank you, Rohit. [Foreign Language] Over to Dinesh Patel.

Thank you, sir. Good afternoon, everyone. We delivered a remarkable performance during the quarter 2 and first half of financial year 2025. We reported a revenue from operations of INR 634.6 crores in Q2 FY '25, which was at INR 152.8 crores in Q2 FY '24, a growth of 315% year-on-year basis. EBITDA increased to INR 148.7 crores this quarter as compared to INR 15.2 crores in the corresponding quarter of previous year. EBITDA margin expanded significantly to 23.4% from 10% in Q2 FY '24. This expansion was largely due to higher execution of orders and realization of economies of scale. PAT of Q2 FY '25 stood at INR 101.4 crores with a PAT margin of 16% as compared to INR 5.9 crores at a PAT margin of 3.8% in Q2 FY '24. Earnings per share for the quarter was at INR 50.6 as compared to INR 3.2 per share Q2 FY '24. In H1 FY '25, the company recorded revenue amounting to INR 1,202.2 crores, which represents a substantial 3.5x increase from INR 265.8 crores in H1 FY '24. EBITDA also witnessed a significant rise to INR 284.6 crores, translating to an EBITDA margin of 23.7% as compared to INR 23.1 crores and an EBITDA margin of 8.7% in H1 FY '24. PAT for FY '25 stood at INR 194.1 crores with a PAT margin of 16.1% as compared to INR 6.9 crores and a PAT margin of 2.6% in H1 FY '24. EPS for H1 FY '25 was INR 96.9 per share as compared to INR 3.7 per share in corresponding period of last year. The company's long-term credit rating remained at A+ stable from India Rating and Research. With our strong balance sheet and the key metrics, we are confident in the timely completion of order book and consolidate our position in the market. With this, I now request the moderator to open the floor for question-and-answer. Thank you.

[Operator Instructions] The first question is from the line of [ Ashish Soni ] from [ Family Office ].

Sir, what about margin sustainability? Last quarter, you said margin can improve, but is it peak right now? What's your sense on the margin?

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Okay. [Foreign Language]

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[Foreign Language] That's the question.

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The next question is from the line of Ankit Jain from IIFL.

Congratulations [Foreign Language]

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Also, [Foreign Language]

Last quarter [Foreign Language]

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Already [Foreign Language]

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And sir, Ajmer [Foreign Language]

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12 months [Foreign Language]

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Overall order book [Foreign Language]

[Operator Instructions] The next question is from the line of [ Vivek Gautam ] from GS Investment.

Congratulations on excellent number yet again by you, sir. [Foreign Language]

Vivek, [Foreign Language]

[Foreign Language] both for solar pumps and in the time to come or both for solar pumps and the solar power in general for India [Foreign Language]

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Sir, [Foreign Language]

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The next question is from the line of Deepak Purswani from Swan Investments.

Congratulation on a great set of numbers. [Foreign Language] So hence, do you want to revise the guidance, one? And [Foreign Language]

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Super, sir. [Foreign Language] and you are seeing good growth. Is this understanding right?

Yeah. [Foreign Language]

Great, sir. [Foreign Language] Can you throw some light on that?

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Okay. Okay, sir. [Foreign Language]

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Sure. Sir, [Foreign Language]

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[Operator Instructions] The next question is from the line of Ajaykumar Surya, Niveshaay.

Congratulations [Foreign Language]

Okay, Ajay, [Foreign Language]

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Ajay Kumar, [Foreign Language]

So sir, just a final understanding [Foreign Language]

Ajay, [Foreign Language]

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The next question is from the line of Venkatesh Akula Wells Fargo.

First of all, congratulations for the stellar results. And I've gone through the investor presentation, and I see a decrease in the cash flow from operations maybe due to the change in the working capital. Like what impact would it have on the ongoing operations?

Can you repeat your question? Actually, I'm not getting what you want to say.

Yes. Just asking about the cash flow from operations. I see like there is a reduction in the cash flow generated. I mean, there is a decrease in the working capital compared to the previous year. So will there be any impact for the execution of orders or upcoming orders?

No, no. There is not any impact. We have sufficient working capital facility available from our multiple banking partners. So that is not a constraint. And recently also, there is INR 1,000 crore outstanding in our debtors book, but still we are executing very well in our pending order book.

So is it like any new chances of adding any new debt, sir, from banks?

No, no, no, nothing. We have sufficient sanction limits. We can use that.

So the next question is from the line of [ Jainam ] from Saltoro Investment.

Congratulations [Foreign Language] So really want to thank for that. And I wanted to get an understanding of Shakti EV business. I think our factory started recently, I think, in the month of September. So if you could throw some light and what is the vision of management in terms of where can we see the EV business going in the next 2 to 3 years?

Yes. [Foreign Language]

Sir, what kind of revenues [Foreign Language] If you could provide some --throw some light on that, that would be great.

Definitely. [Foreign Language]

The next question is from the line of Harshil Solanki from Equitree Capital.

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[Foreign Language] So there are too many factors. [Foreign Language] So there is not any external debt we have taken from anyone.

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The next question is from the line of Ankur Kumar from Alpha Capital.

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[Foreign Language] or is it like longer?

12 months.

The next question is from the line of [ Ayush Agarwal ] from MAPL Value Investing Fund.

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Ayush, [Foreign Language]

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The next question is from the line of [ Harshit Saini ] from [ Summer Wealth Advisors ].

My name is Harshit Saini from [ Summer Wealth Advisors]. First of all, congratulation on the wonderful results. Sir, considering the current growth, INR 3,000 crores is the least that we will do in financial year '26 considering 30% growth rate. But what if our revenue is more than INR 3,000 crores, can we add capacity to more than INR 3,000 crores spend required?

Yes, yes. [Foreign Language]

Okay, sir. Aso, in the last continue call, 30% growth was the guidance. Was it a CAGR growth rate?

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The next question is from the line CA Garvit Goyal from Nvest Analytics Advisory LLP.

Congratulations for a good set of numbers [Foreign Language]

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INR 5,000 crores.

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Total revenue. [Foreign Language]

[Foreign Language] Like I missed that. Can you please explain again like how the recovery is happening now for that particular amount?

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And lastly, sir, [Foreign Language]

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The next question is from the line of Pranav Shrimal from PINC Wealth Advisory.

[Foreign Language] we can expand the capacity to INR 3,000 crores [Foreign Language]?

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[Foreign Language] can we reach around INR4,000 crores -- INR4,500 crores, INR 5,000 crores [Foreign Language]?

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Got it. Got it, sir. And lastly, sir, [Foreign Language]

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The next question is from the line of [ Hardik Patel ], an individual investor.

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Ladies and gentlemen, due to time constraint, we will take this as the last question. I would now like to hand the conference over to Mr. Dinesh Patidar for closing comments.

Thank you very much, [Foreign Language]

On behalf of Shakti Pumps India Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.