Shares of Oswal Pumps Ltd. experienced a sharp decline of 7% in Friday's trade, touching a low of Rs 222.00. The market reaction followed the solar pump manufacturer's announcement of a substantial drop in its consolidated profit and operating earnings for the September quarter of fiscal year 2027 (Q2 FY27).
Q2 FY27 Financial Performance Details
The company reported a consolidated profit attributable to owners of the parent of Rs 39.6 crore for Q2 FY27, a significant 59% decrease compared to Rs 97.5 crore in the same quarter last year. This substantial profit reduction was mirrored in its operating earnings.
- EBITDA Decline: Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) fell by 53.4% year-on-year, standing at Rs 62.8 crore compared to Rs 134.8 crore previously.
- Margin Contraction: The EBITDA margin contracted sharply to 12.3% from 24.7% in the year-ago quarter, indicating considerable pressure on operational profitability.
- Revenue Drop: Revenue from operations decreased by 6.2% year-on-year to Rs 506.3 crore from Rs 539.6 crore. Total income also saw a 6.4% fall to Rs 511.8 crore.
- EPS Down: Diluted earnings per share (EPS) declined by 60.4%, dropping to Rs 3.34 from Rs 8.43 in the corresponding quarter of the previous year.
Management's Perspective and Future Plans
Commenting on the results, Vivek Gupta, Chairman and Managing Director of Oswal Pumps, noted sequential growth in Q2 FY27, with total income increasing by 6.2% quarter-on-quarter and revenue from operations rising by 6.9%. He attributed this to steady execution of the solar pump order book, despite a competitive pricing environment.
Looking ahead, Oswal Pumps is focused on strengthening its backward integration capabilities. Through its wholly owned subsidiary, Oswal Solar Energy Private Ltd, the company plans to establish a 1.2 GW TOPCon solar cell manufacturing facility in Karnal, Haryana. This project, estimated to cost around Rs 455.85 crore, is expected to be funded partly by debt (Rs 296 crore) and partly by reallocating unutilised IPO proceeds (Rs 159.85 crore), pending shareholder approval. The facility aims to meet approximately 75% of the subsidiary's solar cell requirements, reducing reliance on external suppliers.