Shakti Pumps (India) Limited ($531431)

Ladies and gentlemen, good day, and welcome to the Q4 and full year FY '26 earnings conference call hosted by Shakti Pumps India Limited. [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. 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 risks 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 question today, we have the senior management of Shakti Pump India Limited, represented by Mr. Dinesh Patidar, Chairman; Mr. Ramesh Patidar, Managing Director; Mr. Ramakrishna Sataluri, Chief Executive Officer, Shakti Energy Solutions Limited; Mr. Dinesh Patel, Chief Financial Officer; and Mr. Ravi Patidar, Company Secretary and Compliance Officer. We will start the call with a brief overview of the past quarter and full year FY '26 by Mr. Ramesh Patidar, our Managing Director. I will now hand over the call to Mr. Ramesh Patidar. So over to you, sir.

Thanks, Rohit. Good afternoon, everyone, and thank you for joining us on Shakti Pump's Q4 FY '26 Earnings Call. FY '26 marked a strategic transition year for the company, one where we deliberately balance growth with financial discipline. Our priorities throughout the year were clear, to strengthen the balance sheet, improve cash conversion, and build a resilient operating platform capable of delivering sustainable long-term growth while continuing to reinforce our leadership in the solar pumping segment. The company delivered its highest ever consolidated revenue of INR 2,698 crores in FY '26 with Q4 FY '26 revenue at INR 858 crores, also the highest in the single quarter. This performance was backed by a strong execution ramp-up with solar pump installation increasing 20% year-on-year to 86,086 units in FY '26 and a robust 51% year-on-year growth in Q4 FY '26 to 28,345 installations. The strong exit run rate in the fourth quarter underlines our improved execution capabilities and sustained traction across key states. During the year, we navigated a challenging operating environment. EBITDA margin faced pressure from lower realizations under the Magel Tyala Scheme, a sharp increase in raw material prices and elevated logistics and freight costs, impacted by ongoing global geopolitical disruptions. Importantly, these are external and cyclical headwinds, not a structural issue. Despite these challenges, we sustained EBITDA margin at approximately 16% for FY '26, reinforcing the robustness of our operating model and our ability to protect profitability while maintaining execution momentum. Crucially, we have not pursued growth at the cost of balance sheet strength. FY '26 focused on disciplined execution and capital stewardship, and this is now clearly reflected in our financials. Receivables were reduced by over INR 420 crores during the fourth quarter, reduced from INR [ 197 ] crores as of December 31, 2025 to INR [ 1,276 ] crores as of March 31, 2026, representing a 77-day improvement in receivable days. This was achieved even as Q4 marked the highest quarterly revenue in the company's history, underscoring our strong focus on working capital efficiency. As a result, the company generated healthy cash flows from operations of INR 124 crores in FY '26, significantly strengthening balance sheet quality and liquidity. The improvement in cash conversion is key pillar of our long-term strategy and position us well to fund growth sustainably without undue leverage. Our order book stands at approximately INR 1,500 crores as of May 7, 2026, providing strong revenue visibility for the coming period. We remain constructive on demand prospects supported by anticipated policy momentum under KUSUM 2.0, continued opportunities under the Magel Tyala Scheme, and sustained demand across other state-level solar initiatives. On the export front, FY '26 saw a stable performance. During Q4, exports were temporarily affected due to the delays in order placement amid geopolitical tensions in the Middle East. Encouragingly, we have witnessed improving traction through our dealer and distributor network, which we expect to remain a steady contributor going forward. Meanwhile, the growth in our case-based domestic business has enhanced revenue diversification and further supported working capital efficiencies. Beyond our core solar pumping business, we are also looking into related areas like solar rooftop system and electric vehicle parts, which are aligned with India's clean energy transition and offer attractive medium to long-term opportunities. Shaki Pumps remain committed to growing responsibly, protecting the balance sheet, preserving cash flows, and investing for the long-term. We are confident that the fundamentals of the business remain strong and the step taken in FY '26 ensure that we emerge from current challenges better positioned, more resilient, and firmly focused on sustainable value creation. We believe these actions reinforce our long-standing commitment to all stakeholders and underscore that Shaki Pumps is here to stay with long-term growth firmly intact. I now request Mr. Ramakrishna Sataluri-ji to share key developments and the outlook of our solar rooftop business. Thank you.

Thank you very much, Mr. Ramesh Patidar. Good afternoon, everybody. Just to take it from where he has left, the strong fundamentals and the excellent product quality has really helped the rooftop business to start off very well. We started very well. And we realized that the heart of this solution belongs to the inverter. And therefore, we placed a lot of inverters in the market to check the feedback. Given that the strong Shakti brand acceptance is pretty good, the feedback also for this product is very good. We have partners and we have customers who've come back to us and said that whenever there is a Shakti inverter that has been installed, we are having about roughly 10% better generation, which all goes very well for this business. We've already set the channel up in most of the places. That's a continuous process, but we have some very good distributors set across the country. We are looking forward to some very good numbers in this financial year. This year really looks very good for us. Thank you very much. And now I open the floor for your questions, please. Thank you.

[Operator Instructions] Question comes from the line of [ Prakhar Tibrewala ] from Choice Institutional Equities.

Congratulations for a record breaking revenue number. My question is regarding the margins. So do we see a way back to the peak margins of 24% we saw in H1 FY '26 and back in FY '25 or are we expected to remain at the current levels?

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So do we see it coming back to like 20 again?

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3% to 4% [Foreign Language]

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Our next question is from the line of Aashish Upganlawar from InvesQ PMS.

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Our next question is from the line of Ankit Shah from Anand Rathi.

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Our next question comes from the line of from Nikunj Bhanushali from Wallfort PMS.

Sir my first question is, next year [Foreign Language]

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And in terms of pump installations next year [Foreign Language]

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And one last question [Foreign Language]

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And one last question [Foreign Language]

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Our next question comes from the line of Daksh Malhotra from Aadriv Global.

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But sir, would you like to give any -- put any numbers to this, FY '27 [indiscernible]?

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[Foreign Language] Are we getting any breakthroughs last [Foreign Language], but it still shows under emerging business in the presentation. [Foreign Language]?

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Our next question comes from the line of Mahendra Jain from Way2Wealth.

[Foreign Language] are we thinking on that line, nuclear or hydrogen [Foreign Language]

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[Operator Instructions] Our next question is from the line of Yohan Khinvasara from Asian Broking.

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Our next question is from the line of [ Suvankar Mallick from Sanghai Family Office].

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Third question, sir, I think last Q3 [Foreign Language]

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The next question is from the line of Rahul Gupta from Evergrowth Capital.

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Our question is from the line of Jeet Jhaveri from Waya Financial Technologies.

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[Foreign Language] we will update you in the quarter 1. So we once executive, then we'll update you, because the operational efficiencies is second matter and raw material price dependency is one matter.

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Our next question is from the line of Bhavya Shah from Wallfort Fund Management.

[Foreign Language] So what is your view on battery management [Foreign Language]?

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Our next question is from the line of Kamlesh Bagmar from Lotus Asset Managers.

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Our next question comes from the line of [ Himanshu Shivhare from MB Investment ].

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Our next question comes from [ Vamika Mandhania ] from Anand Rathi.

Congratulations on your set of numbers [Foreign Language]

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Our next question is from the line of Prakhar Tibrewala from Choice Institutional Equities.

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Correct.

Thank you. Ladies and gentlemen, due to time constraints, we will take that as a last question. I would now like to hand the conference over to Mr. Dinesh Patidar, Chairman, for closing comments. Over to you, sir.

Thank you [Foreign Language] Thank you very much.

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