Oswal Pumps FY26: High growth, softer margins, and a push beyond PM KUSUM

Oswal Pumps Limited closed FY26 with its strongest reported topline and profit in the company’s history. Revenue from operations rose to ₹2,064.4 crore, up 44.3% year on year, supported by execution under PM KUSUM and allied state schemes. Operating EBITDA increased to ₹513.9 crore, up 22.4%, while profit after tax grew 34.1% to ₹376.3 crore.

The fourth quarter carried that momentum on revenue and PAT. Q4 FY26 revenue from operations stood at ₹509.7 crore, up 39.8% year on year, and PAT rose 44.8% to ₹92.5 crore. The quarter, however, reflected the theme management repeatedly underlined. Growth stayed strong but margins moderated due to tender competition and input cost pressures.

What drove FY26 execution

The company positioned itself as a vertically integrated solar pumping systems provider, with backward integration across pumps, motors, solar PV modules, mounting structures and balance of system kits. This model is intended to support large scale turnkey deployment under government schemes.

Operationally, Oswal reported total solar pumps supplied of 87,323 units in FY26, up from 71,167 in FY25. Non-solar pumps supplied were 93,585 units, taking total pumps supplied to 180,908 units.

Revenue disclosures in the presentation show a clear tilt towards government linked activity. In FY26, revenue from PM KUSUM and other government schemes totalled ₹1,573.8 crore, while revenue other than PM KUSUM and other government schemes was ₹391.1 crore. Within this, other government schemes formed the largest component at ₹963.8 crore.

Financial summary

Margins and working capital: the two pressure points

Despite strong growth, profitability ratios were lower than the prior year. FY26 operating EBITDA margin was 24.9% versus 29.4% in FY25, and Q4 FY26 operating EBITDA margin was 23.2% versus 27.1% in Q4 FY25. Management attributed this to competitive tender pricing and input cost pressures linked to geopolitical uncertainty. The company stated it is responding through value engineering and cost optimization.

Working capital remained a visible constraint. The cash conversion cycle was reported at 172 days as of March 31, 2026, with receivable days at 155. Management explained elevated receivables were driven by delays in payments from state nodal agencies under PM KUSUM and the Magel Tyala scheme, while also emphasizing these receivables are from government or government backed counterparties.

On cash flow, the company reported operating cash flow for FY26 at negative ₹77.1 crore, improving from negative ₹142.1 crore in FY25. The company also disclosed that collections of more than ₹116 crore received on April 2, 2026 would have effectively turned full year operating cash flow positive to about ₹39.3 crore. Q4 FY26 operating cash flow was stated to be positive at ₹170.6 crore.

Order book visibility and the PM KUSUM 2.0 dependency

The core near-term visibility continues to come from scheme linked activity. The company reported an executable order book of 19,912 pumps as of May 15, 2026, with an additional near-term pipeline exceeding 25,000 pumps.

During the concall, management acknowledged that FY27 growth is expected to be back-ended, largely tied to the timing of PM KUSUM 2.0 rollout and tender execution schedules. Management said that if PM KUSUM 2.0 is announced in June, execution would practically begin in Q3 with meaningful execution from around November, after tendering and allotment processes.

The company guided for FY27 revenue growth of 20% to 25% over FY26. It also guided operating EBITDA margins of 22% to 23% and PAT margins of 15% to 16% for FY27, citing tender pricing dynamics and elevated input costs.

Diversification into rooftop, utility and C&I solar

A key strategic theme in both the presentation and the transcript is diversification away from single scheme dependence. FY26 marked Oswal’s entry into the rooftop solar segment through its first order under PM Surya Ghar: Muft Bijli Yojana.

The company also disclosed a combined pipeline of about 300 MW across rooftop solar, utility and C&I solar projects. It incorporated a project SPV, Oswal Doon Baran Bundi Solar Projects Limited, through its subsidiary Oswal Solar Energy Private Limited, with a 60% stake, to execute rooftop solar PV projects on Rajasthan state government buildings under Hybrid Annuity Mode.

Management was cautious on near-term profitability for these new lines. In Q&A, it stated the initial focus is execution and understanding operational challenges, rather than targeting profitability in the first phase.

Capital allocation: deleveraging done, expansion underway

The company disclosed IPO fund utilization as on March 31, 2026. Out of net proceeds, the company had fully utilized amounts earmarked for repayment of certain outstanding borrowings of ₹280.0 crore and for repayment or prepayment of subsidiary borrowings of ₹31.0 crore. It also disclosed ongoing utilization towards capex and investments for new manufacturing units, with total unutilized proceeds of ₹271.3 crore.

Balance sheet metrics improved meaningfully post IPO and debt repayment. As of March 31, 2026, total borrowings were ₹225.3 crore and net debt was ₹134.6 crore. Net debt to equity was shown at 0.08x and net debt to operating EBITDA at 0.26x.

On capex timelines, management stated the pump and motor expansion and automation program is expected to complete by Q3 FY27. For solar modules, it stated the first phase expansion of 1 GW is expected to complete by Q1 FY27, and the remaining 0.5 GW by Q3 FY27.

Takeaways

Oswal Pumps delivered a record FY26 on revenue and profit, supported by execution strength in PM KUSUM and state schemes, along with a balance sheet that has rapidly deleveraged after the IPO. The trade-off is visible in softer margins and a working capital cycle still shaped by the pace of government collections.

FY27 is positioned as a transition year. Management’s guidance points to back-ended growth linked to PM KUSUM 2.0 timing, with margins expected to moderate in the near term. At the same time, the company is building a second growth engine through rooftop, utility and C&I solar, backed by a disclosed pipeline of about 300 MW. The key monitorables remain tender momentum, execution conversion into cash, and whether diversification reduces scheme concentration over time.