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Check Before You Invest : Shakti Pumps (India) Ltd

BSE: 531431 NSE: SHAKTIPUMP ISIN: INE908D01010
  |   Sector:  Capital Goods & Industrial Consumables   |   Industry:  Compressors / Pumps

Snapshot

Q.1 Which industry/sub-sector does Shakti Pumps (India) Ltd belong to?
Shakti Pumps (India) Ltd belongs to the Capital Goods & Industrial Consumables sector, operating specifically within the Compressors / Pumps segment.
Q.2 Is Shakti Pumps (India) Ltd a good quality company?
Shakti Pumps (India) Ltd is a good quality company, based on a consistently good multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Shakti Pumps (India) Ltd undervalued or overvalued?
Shakti Pumps (India) Ltd appears Somewhat overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 25.46 25.10
Price to Book 3.92 4.54
Price to Sales 2.35 2.41
EV to EBITDA 14.66 15.68
Q.4 Is Shakti Pumps (India) Ltd a good buy now?
Shakti Pumps (India) Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Shakti Pumps (India) Ltd?
Shakti Pumps (India) Ltd revenue growth is 91.9% for FY-2025, which is above its 5-year CAGR of 47.35%, indicating faster growth.

Q.2 Gross Profit margin of Shakti Pumps (India) Ltd?
Shakti Pumps (India) Ltd Gross profit margin which is the profit after deduction of direct costs, is 22.1% for FY-2025, which is above its 5-year median of 12.4%, indicating increasing margins.

Q.3 Operating Profit Margin of Shakti Pumps (India) Ltd?
Shakti Pumps (India) Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 22.67% for FY-2025, which is above its 5-year median of 13.64% indicating increasing margins.

Q.4 Net Profit Margin of Shakti Pumps (India) Ltd?
Shakti Pumps (India) Ltd Net Profit Margin is 15.88% for FY-2025, is above its 5-year median of 6.9%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 22.1 12.4
Operating Profit Margin (%) 22.67 13.64
Net Profit Margin (%) 15.88 6.9

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Shakti Pumps (India) Ltd?
Shakti Pumps (India) Ltd Return on Asset is 23.43%, which is above its 5-year historical median of 10.83%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Shakti Pumps (India) Ltd?
Shakti Pumps (India) Ltd Return on capital employed is 58.46% for FY-2025, which is above its 5-year historical median of 27.25%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 13.5%, indicating value creation.

Q.7 Return on Equity (ROE) of Shakti Pumps (India) Ltd?
Shakti Pumps (India) Ltd Return on equity is 45.31% for FY-2025, which is above its 5-year historical median of 22.55%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Shakti Pumps (India) Ltd?
Shakti Pumps (India) Ltd Cash conversion cycle is 83 days, in line with its 5-year historical median of 83 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 1.48 1.48
ROE (%) 45.31 22.55
ROCE (%) 58.46 27.25
Cash Conversion Cycle 83 days 83 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Shakti Pumps (India) Ltd?
Shakti Pumps (India) Ltd Debt-to-Equity ratio is 0.12, which is above the industry average of 0.07, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Shakti Pumps (India) Ltd?
Shakti Pumps (India) Ltd Debt to cash flow from operations is 4.97, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Shakti Pumps (India) Ltd?

Q.1 Promoter shareholding and pledge status of Shakti Pumps (India) Ltd?
Promoters hold 50.35% of the Shakti Pumps (India) Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Shakti Pumps (India) Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Shakti Pumps (India) Ltd vs industry peers?
Shakti Pumps (India) Ltd revenue CAGR is 47.35%, compared to the industry median CAGR of 14.24%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 91.9 14.2
Gross Profit Growth (%) 210.8 18.9
Operating Profit Growth (%) 206.6 20.5
Net Profit Growth (%) 236.8 20.9
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.48 1
ROE (%) 45.31 15
ROCE (%) 58.46 19.99
Cash Conversion Cycle (days) 82.67 92

Valuation & price assessment

Q.1 Stock return of Shakti Pumps (India) Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 34.4% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
34.4% 34.4% 78.5% -40%
Q.2 Valuation ratios of Shakti Pumps (India) Ltd vs historical?
The current P/E ratio of 25.46 is in line with than its historical median of 25.10, indicating that the stock is trading near its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 25.46 25.10 37.40
Price to Book 3.92 4.54 5.31
Price to Sales 2.35 2.41 3.28
EV to EBITDA 14.66 15.68 22.66

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