Solar pump stock jumps 8% after receiving ₹380 Cr from MSEDCL for solar water pumping systems

Synopsis: Oswal Pumps Ltd received a Rs. 380 crore order from MSEDCL to supply and install 13,738 solar water pumping systems under the PM Kusum B Scheme, including full warranty, maintenance, and RMS support, to be executed within one year.

This company has steadily expanded its capabilities, including in the renewable energy space through solar pump installations under various government schemes is now in the focus after securing an order from Maharashtra State Electricity Distribution Company Limited (MSEDCL).

With market capitalization of Rs. 6,073 cr, the shares of Oswal Pumps Ltd are currently trading at Rs. 533 per share, jumping nearly 8% in today’s market session, making a high of Rs. 537.75, from its previous close of Rs. 498.90 per share.

About the order

Oswal Pumps Limited has announced that it has received a Letter of Award from the Maharashtra State Electricity Distribution Company Limited (MSEDCL) for the supply and installation of 13,738 Off-Grid DC Solar Photovoltaic Water Pumping Systems (SPWPS). 

This project is part of the PM Kusum B Scheme “Magel Tyala Saur Krishi Pump” Yojana and is to be executed within one year. The scope of the contract includes the design, manufacture, supply, transportation, installation, testing, and commissioning of SPWPS units of 3HP, 5HP, and 7.5HP capacities at identified farmer locations across Maharashtra. 

Additionally, the order encompasses a five-year complete system warranty, repair and maintenance, and Remote Monitoring System (RMS). Each installation is to be completed within 60 days from the issuance of the Work Order/ NTP/ JSR approval. The total value of the order is approximately Rs. 380 crore, including GST. 

The company has clarified that neither the promoter nor promoter group has any interest in MSEDCL, and the order does not constitute a related-party transaction. This significant contract reflects Oswal Pumps Limited’s growing role in the renewable energy sector, particularly in advancing solar-powered agricultural solutions in India.

About the company 

Oswal Pumps Limited is an India-based manufacturer specializing in high-quality pumping solutions, including submersible pumps, motors, solar pumping systems, and related water management products. With a strong presence in both domestic and international markets, the company serves sectors such as agriculture, industry, and household water supply. 

Sales rose 74% to Rs. 540 crore from Rs. 310 crore a year earlier, while EBITDA increased 27% to Rs. 128 crore compared to Rs. 101 crore. Net profit grew 48% to Rs. 97.5 crore, up from Rs. 65.8 crore last year. Earnings per share also improved, with EPS rising 29% to Rs. 8.55 versus Rs. 6.61 in the Q2FY25.

The company delivers strong profitability metrics, with a ROCE of 77.9% and ROE of 87.5%, supported by a low debt-to-equity ratio of 0.08, indicating significant debt reduction. With an industry PE of 38.9 versus the stock’s P/E of 18.1, the valuation appears attractive. The company also maintains a robust performance history, reflected in its 3-year average ROE of 81%.

Written by Manideep Appana

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