Thread by @TYMFinance

Shakti Pumps conducted the conference call for Q2: FY22

"With KUSUM mgmt guides to grow at 30-35% YoY in coming year

Here are the conference call highlights.

Business Updates:

• KUSUM 2 sales has been started and will be seen in Q4.
• Received order book of 100cr in Jan first week.
• With increase in EPC product mix, margins impacted a bit.
• Mgmt expect the Raw Material prices to reduce further.
• Capacity Utilization: 40%

KUSUM:

• Total Market of KUSUM 2: 3,17,000
- Addressable Market: 1,50,000
• Shakti Pump is already present in 22 states, being leader in states such as Haryana, Rajashthan, MP, Maharashtra
• Price Hike done in KUSUM 2: 3-4%.
• Bank Guarantee of 3% has to be given.

Export:

• Co. will explore other country prior to having experience in delivering the pumps in the current market covered.

Margins:

• Mgmt expects margins to increase in coming quarter.
Guidance for margin
- OPM: 12%
- PAT: 8-9%
• From last year, margins got reduce because of initiative in entering KUSUM business. Now RM prices are increased but not prices, hence due to competition margin reduced.

Expansion in EV:

• Opened new co. name Shakti EV pvt ltd.
(EV Controller, EV Motor, DC charger- In focus to manufacture).
• Business will be started with manufacturing of Motor & Controller. Competition: Mainly in Valsad.
• Co. will 250cr in coming 5 years in this subsidiary.

Raw Material:

• For Solar pump, mgmt don't thinks any raw material supply issue from Adani side.

Competition:
• Adani is also entering for solar pumps. However mgmt feels market size is big and addition of 2-3 players will not impact the industry much.

Other:

• For EV business co. has applied for PLI scheme where new facility is created.
• Pumps price is for 2,50,000 for size of 5-10HP pumps (Key focus area of Shakti Pumps)
• Took step for digitizing in pumps selling by starting an app and website for it.

Its for Q3: FY 22*