Fundamental Result Update

Shakti Pumps Q1FY20 Result Update



Shakti Pumps came out with muted set of results in Q1FY20. Consolidated revenue for the quarter grew 10.3% YoY to Rs 1058 mn. Despite modest revenue growth, EBITDA suffered a decline of 19% YoY to Rs 107 mn, due to double digit increase in raw material cost (+16% YoY), employee cost (+11.9% YoY) and higher other expenses (+13.3%). EBITDA margin fell 365bps YoY to 10.1% against 13.7% in corresponding quarter last year. PAT for the quarter stood at Rs 25 mn, a decline of 62.8% YoY. The huge fall in PAT was due to lower EBITDA as well as higher interest cost (+42.9% YoY). Despite near term sluggishness in numbers, we remain positive on Shakti Pumps from longer term perspective, recent correction in stock price made the valuation attractive, which compels us to upgrade our rating to Buy.


Tags: FundamentalResult Update


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