Summary
Oswal Pumps Limited - Q3 FY 2026 Earnings Call Summary Monday, February 09, 2026 2:00 PM
Event Participants
Executives 4 Shivam Gupta (Whole-time Director), Subodh Kumar (CFO), Vivek Gupta (Chairman and Managing Director), Sanjeev Sancheti (Investor Relation Advisor)
Analysts 6 Aashish Upganlawar (InvesQ PMS), Aditya Vora (Sohum AMC), Anand Kulkarni (Front Wave Research), Gaurav Shukla (Finvestors), Karthik Bhat (LFC Securities), Rudraksh Kalra (MB Investment)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Total Income | ₹507.7 crores | +33.4% YoY; Strong operational execution despite competitive pricing pressures. |
| Operating Revenue | ₹501.1 crores | +31.9% YoY; Primarily driven by PM KUSUM and Magel Tyala scheme execution. |
| Operating EBITDA | ₹127.1 crores | +164 bps QoQ improvement in margins; Supported by value engineering and backward integration. |
| EBITDA Margin | 25.4% | Sequential expansion despite tender pricing pressure and high commodity costs. |
| Profit After Tax (PAT) | ₹91.6 crores | 18.0% margin; Robust growth of 30.9% for the 9-month period (₹283.7 cr). |
| Net Debt | ₹188 crores | Increased due to working capital needs; Net Debt/EBITDA remains low at 0.36x. |
| Cash Conversion Cycle | 177 days | +20 days QoQ; Impacted by delayed receivables from Maharashtra state agencies. |
| Receivables Days | 157 days | Increased from 138 days; Management expects normalization as state funding (AIIB) is released. |
Geographic & Segment Commentary
- Solar Pumping Systems: Sold 20,463 units in Q3; 16,000 via direct schemes (PM KUSUM/Magel Tyala) and 3,623 to other players. Segment remains the primary growth engine under government-led irrigation programs.
- Agri & Non-Agri Pumps: Sold 14,581 units (Domestic and Export); focused on diversifying product mix to include higher HP pumps (up to 100 HP) and exploring new export geographies.
- Maharashtra (Magel Tyala): The largest geographic exposure currently facing collection delays; state funding sanctioned via AIIB is expected to normalize payment cycles by Q4 FY26-end.
Company-Specific & Strategic Commentary
- Backward Integration & Automation: 1 GW solar module expansion scheduled for Q1 FY27, with total capacity reaching 1.5 GW by Q3 FY27. Automation of pump/motor plants is on track for Q2 FY27 completion.
- Value Engineering: Management neutralized a 15-16% potential margin hit from rising metal prices and lower tender rates, limiting actual margin impact to ~1.25% through supplier consolidation and design optimization.
- Vertical Diversification: Actively exploring PM Surya Ghar (rooftop solar) and EPC for large solar systems to reduce dependency on government pumping schemes.
- Product Innovation: Developing helical rotor pumps and PCPs; currently in the final testing phase to ensure performance superiority before a formal market launch.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth | ~50% YoY for FY26 | Based on strong execution of current 24,500 pump order book. |
| Medium-term Revenue | 30% - 35% CAGR | Expects PM KUSUM 2.0 to provide multi-year volume visibility starting Q1 FY27. |
| EBITDA Margin | 25.5% - 26.0% (Q4) | Expected to benefit from ongoing cost optimization and integration. |
| PAT Margin | 17.5% - 19.0% (FY26) | Guidance maintained despite commodity price volatility and competitive bidding. |
Risks & Constraints
| Risk | Context |
|---|---|
| Working Capital Stress | Receivable days elongated to 157 days due to Maharashtra state treasury delays; management is prepared to sacrifice temporary revenue to protect balance sheet health if delays persist. |
| Commodity Price Volatility | Metal prices (Copper, Stainless Steel) are at all-time highs; fixed-price government tenders (1-yr duration) limit the ability to pass on these costs. |
| Policy Shift/Delays | Delay in PM KUSUM 2.0 beyond April 2026 could result in a “slow” Q1 FY27, though the company is mitigating this via private market and export expansion. |
Q&A Highlights
Receivables & Maharashtra Funding
- Question: What is the status of the delayed receivables from the Maharashtra government? (Aashish Upganlawar)
- Answer: Delays were procedural due to state funding being rotated and AIIB loan processing. Management received confirmation of funds being released in three tranches through March 2026 (Vivek Gupta).
PM KUSUM 2.0 Timeline
- Question: Why was PM KUSUM 2.0 not in the recent budget and when is it expected? (Karthik Bhat)
- Answer: Official announcement is legally tied to the completion of PM KUSUM 1.0 (March 31, 2026). The finance department has already approved the modified, larger-quantum scheme for early FY27 (Vivek Gupta).
Margin Resilience
- Question: How are you maintaining margins despite 13-14% price cuts in new tenders and high commodity costs? (Shashikant)
- Answer: Achieved through deep backward integration and pivoting from small to large suppliers to gain volume discounts. Value engineering has neutralized the majority of the 15-16% cost headwind (Vivek Gupta).
Competitive Environment
- Question: Are new entrants in the solar bidding process a threat to market share? (Karthik Bhat)
- Answer: While bidders are increasing, Oswal holds ~28% cumulative market share. Being the most integrated player with in-house installation and service teams makes the company the “last sufferer” in a price war (Vivek Gupta).
Key Takeaway
Oswal Pumps delivered a strong Q3 FY26 with a 31.9% growth in operating revenue, reaching ₹501.1 crores, supported by the installation of over 20,400 solar pumps. Despite facing significant headwinds from all-time high commodity prices and competitive tender pricing, the company expanded EBITDA margins sequentially to 25.4% through aggressive value engineering and backward integration. The primary watch point remains the elongation of the cash conversion cycle to 177 days due to delayed payments from the Maharashtra government, though management expects normalization by the end of FY26 as AIIB funding is deployed. Strategically, the company is diversifying into PM Surya Ghar and expanding solar module capacity to 1.5 GW by Q3 FY27. With a current order book and pipeline exceeding 49,000 pumps, Oswal remains confident in achieving ~50% revenue growth for FY26 while awaiting the “big bang” launch of PM KUSUM 2.0 in early FY27.
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