New Delhi – Shares of solar pump manufacturers Shakti Pumps (India) Ltd and Oswal Pumps Ltd are trading near target prices set by Choice Institutional Equities, with analysts anticipating a significant boost from an upcoming government policy announcement. While both companies are projected to see a dip in first-quarter profits, the formal notification of the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM KUSUM) 2.0 scheme is identified as a critical catalyst for future growth.
Q1 Profit Projections Show Declines
For the June quarter, Choice Institutional Equities forecasts a challenging period for both companies. Oswal Pumps is expected to report a 25.4 percent year-on-year drop in profit after tax to Rs 70.60 crore, with sales declining 6.9 percent to Rs 478.70 crore. Its EBITDA margin is projected to contract by 409 basis points to 23.3 percent.
Shakti Pumps is also predicted to experience a substantial profit decline of 74.5 percent year-on-year, reaching Rs 24.70 crore. Despite this, its revenue is anticipated to rise by 12 percent year-on-year to Rs 697.20 crore. The company's EBITDA margin is expected to see a sharper contraction of 1,365 basis points, settling at 9.4 percent.
PM KUSUM 2.0: The Key Trigger for Solar Pump Stocks
The primary driver for potential re-rating and further upside for Shakti Pumps and Oswal Pumps lies in the official announcement of PM KUSUM 2.0. The Ministry of New and Renewable Energy (MNRE) has yet to formally notify the scheme, but industry discussions suggest an announcement could come by the end of H1FY27, specifically by September-end.
Union Minister Pralhad Joshi had previously announced PM KUSUM 2.0 at the 4th National Agro-RE Summit in March 2026. The revised scheme is set to include a dedicated 10-gigawatt (GW) Agri-PV component, which will allow farming activities to continue beneath elevated solar panels, signifying higher execution targets and improved realization for manufacturers.
“Material cost has stabilised at elevated levels, reducing margin at current realisation. We expect revenue visibility and margin expansion only after a full-fledged scheme announcement. Therefore, we maintain a 'Neutral' stance till the announcement,” stated Choice Institutional Equities in its report.
Diversification into Solar Inverters
Both Shakti Pumps and Oswal Pumps are strategically expanding into the solar inverter segment. This move aims to capitalize on the demand generated by the PM Surya Ghar Muft Bijli Yojana, a government initiative targeting 1 crore households by FY27E. As of May 2026, the scheme has received over 63 lakh applications, benefiting 32 lakh households.
Shakti Pumps claims a 10 percent efficiency advantage for its inverters compared to competitors, while Oswal Pumps is initiating its foray with assembly operations before scaling up production.
Analyst Outlook and Target Prices
Choice Institutional Equities has maintained an 'Add' rating for both Shakti Pumps and Oswal Pumps. However, due to higher material costs and lower realization on current order books, the brokerage has revised its margin guidance downwards, awaiting the policy catalyst. The target price for Shakti Pumps remains Rs 640, and for Oswal Pumps, it is Rs 450. Any significant stock movement beyond current levels is largely tied to the anticipated PM KUSUM 2.0 announcement.