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Business News/ Markets / Stock Markets/  Shakti Pumps stock locks in 5% upper circuit for 2nd day in a row to hit new record high, gains 468% in a year
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Shakti Pumps stock locks in 5% upper circuit for 2nd day in a row to hit new record high, gains 468% in a year

Shakti Pumps experiences sharp rise in shares on the back of stellar Q4 results and consistent order flows, driving investor optimism. Company's PAT and revenue witness substantial growth in FY24. Raises ₹200 crore through QIP to expand capacity for pumps and motors.

As of March 31, 2024, Shakti Pumps' order book stood at ₹2,400 crore, including three new orders worth ₹250.62 crore from Haryana and Maharashtra for the installation of solar pumps. (Pixabay)Premium
As of March 31, 2024, Shakti Pumps' order book stood at 2,400 crore, including three new orders worth 250.62 crore from Haryana and Maharashtra for the installation of solar pumps. (Pixabay)

Shakti Pumps, the country's leading manufacturer of solar pumps & motors, has seen its shares rise sharply in recent weeks due to multiple positive developments, such as stellar performance in Q4 and a steady stream of order flows. These advancements have boosted investor optimism, resulting in increased demand for the stock.

In today's trading session, shares locked in a 5% upper circuit for the second straight day to hit a new record high of 2,493.60. Over the past year, the shares have soared from 439 to the current level, yielding an impressive return of 468%.

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On April 27, the company reported a significant increase in its consolidated profit after tax (PAT) to 89.70 crore for the quarter ended March 2024, driven by higher revenues. This is a substantial rise from the net PAT of 2.2 crore during the same quarter of the previous fiscal year.

Revenues surged over threefold to 609.3 crore from 182.7 crore in the year-ago quarter. For FY24, the company's PAT grew manifold to 141.7 crore from 24.1 crore in FY23, while revenue jumped 41.7% to 1,370.7 crore from 967.7 crore in FY23.

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Meanwhile, in March, the company successfully raised 200 crore through a Qualified Institutional Placement (QIP). The company stated that the majority of the funds will be strategically allocated to increasing the capacity for pumps, motors, inverters, VFDs, and related structures.

Multiple order wins 

In March, the company secured several significant orders. Notably, it won a contract worth 930 million Indian rupees from the Maharashtra Energy Department Agency to supply 3,500 solar photovoltaic water pumping systems across various locations in Maharashtra, India. 

Additionally, the company received an order from the Haryana Renewable Energy Department (HAREDA) valued at 73.32 crore for the supply, installation, and commissioning of solar water pumping systems. This marks the second contract awarded by HAREDA within the span of a month. 

As of March 31, 2024, Shakti Pumps' order book stood at 2,400 crore, including three new orders worth 250.62 crore from Haryana and Maharashtra for the installation of solar pumps, as per the company's earnings report. 

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Meanwhile, the company successfully raised 200 crore in March via QIP route. The company said that the majority of the funds raised through QIP will be strategically deployed towards increasing the capacity of pumps, motors, inverters, VFDs, and structures. 

Demand drivers 

India, predominantly an agrarian economy, has a thriving agricultural sector with a sustained demand for pumps, driven by declining groundwater levels and proactive government policies such as subsidised electricity and exemptions for solar water pumps. These policies have promoted independent irrigation facilities, increasing the demand for water pumps. 

Additionally, India's GDP is projected to reach USD 15 trillion by 2030, with 70% of this growth driven by urbanisation, which significantly propels the demand for pumps. Urbanisation and population growth are major demand drivers, as expanding cities and a rising population require better sanitation, further boosting the need for pumps.

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Through the PM Kusum Scheme, led by the government, it is estimated that there are over 14 lakh solar pumps under Component B (off-grid pumps) and 35 lakh solar pumps under Component C (on-grid pumps) to be installed. 

Disclaimer: We advise investors to check with certified experts before taking any investment decisions.

 

 

 

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Published: 15 May 2024, 10:22 AM IST
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