Shakti Pumps India Ltd Management Discussions

GLOBAL ECONOMY

The global economy in CY 2025 and 2026 remained broadly stable, supported by resilient demand and gradual policy normalisation across several markets. At the same time, geopolitical developments, trade realignments and evolving supply chain dynamics continued to influence economic and business activity worldwide.

Global Economic Landscape

The global economy continued to navigate a period of transition marked by evolving trade dynamics, geopolitical developments and the ongoing normalisation of economic activity across regions. Despite these shifts, growth remained relatively resilient, supported by moderating inflation, stable labour markets and improving financial conditions in several major economies. Emerging markets continued to play an important role in sustaining global economic momentum, while policy measures undertaken by governments and central banks helped support investment and consumption. Overall, the global economic environment remained stable, demonstrating adaptability amid a changing geopolitical and economic landscape.

Regional Growth Dynamics

Global growth held broadly steady in 2025 even as its composition shifted. World output is estimated at 3.4% for 2025, modestly ahead of the 3.3% recorded in 2024, as resilient demand in advanced economies offset a continued, gradual cooling in China. Looking ahead, growth is projected to soften to 3.1% in 2026 before edging back up to 3.2% in 2027, as the lagged effects of high real interest rates and weaker industrial activity weigh more visibly on advanced economies.

Risks and Outlook

The global growth trajectory through 2027 remains below pre-pandemic historical averages, with the balance of risks tilted to the downside. Escalating trade policy uncertainty, the protracted Middle East conflict, and the deepening fragmentation of the global economic order evidenced by tightening export controls on critical minerals and accelerating supply chain diversification continue to inject near-term volatility into financial markets and investment decisions.

That said, a gradual improvement in global financial conditions is expected as central banks across advanced economies ease monetary policy further where disinflation has been durably achieved. Stabilisation in trade relations and contained geopolitical disruption remain the key preconditions for the global economy to sustain even its current modest growth path.

INDIAN ECONOMY

During FY 2025-26, India further strengthened its position among the worlds leading economies, emerging as the sixth-largest economy globally in nominal GDP terms. This achievement underscores the countrys sustained economic momentum, supported by consistent policy measures, ongoing structural reforms, large-scale infrastructure development and strong domestic demand. Backed by stable macroeconomic conditions and a young, expanding workforce, India remains well positioned to increase its influence in the global economic landscape.

The economy demonstrated robust performance during the year, with real GDP growth accelerating to 7.7%, up from 7.1% in FY 2024-25. Nominal GDP expanded by 8.9% to reach Rs. 346.36 lakh crore. Growth was driven by rising consumer spending, continued capital expenditure by both the government and private sector and solid contributions from the manufacturing, industrial, and services segments. The widespread nature of this growth reflects the increasing depth, resilience and diversification of the

Indian economy.

7.70%	8.90%	4
Real GDP Growth \u2014 FY 2025\u201326	Nominal GDP Growth \u2014 FY 2025\u201326	Global Economy Rank by Nominal GDP

Ministry of Statistics & Programme Implementation (MoSPI), Provisional Estimates of Annual GDP 2025-26, June 2026.

Sectoral Performance

During FY 2025-26, the Indian economy recorded strong broad-based growth, with both industrial and services sectors playing a pivotal role in sustaining economic momentum. Manufacturing activity remained robust during FY 2025-26, recording growth of 10.7% in real GVA terms, supported by robust manufacturing activity, infrastructure expansion, and construction-led investment. Manufacturing remained a key growth driver, benefiting from capacity expansion, improved industrial infrastructure, and policy-led reforms aimed at strengthening domestic production capabilities The services sector continued to be the primary driver of economic activity, delivering a GVA growth of 9.3% in FY 2025-26, compared with 7.9% in the preceding fiscal year. Growth was particularly strong in trade, logistics, communication, and related services, which registered the highest expansion among service segments at 10.1%. Robust services exports, expanding employment opportunities, and improving urban consumption trends further reinforced sectoral performance. The continued advancement of the services ecosystem is expected to support demand generation across real estate, infrastructure, and other consumption-led industries, thereby contributing to sustained economic development.

Inflation Trends and Monetary Policy Landscape

Indias macroeconomic framework remained robust during FY 2025 26, supported by a stable inflation environment and prudent monetary management. Headline Consumer Price Index (CPI) inflation averaged 3.48% in April 2026, remaining well within the Reserve Bank of Indias target range. The easing of food and energy prices played a key role in containing inflationary pressures, thereby supporting household budgets and reinforcing overall economic stability. confidence and spending patterns, particularly in discretionary A more benign inflation back drop positively categories. The improving price outlook also provided the central bank with greater flexibility to support economic activity through monetary measures. Accordingly, the Reserve Bank of India adopted a growth-supportive policy stance, lowering the repo rate to 5.25% and reducing the Cash Reserve Ratio (CRR) to 3.0% during the fiscal year. These actions enhanced systemic liquidity and facilitated improved credit availability across the economy.

The combined effect of moderated inflation, favourable interest rates, and ample liquidity has strengthened the overall economic environment. Improved access to financing for both businesses and consumers is expected to encourage investment, stimulate consumption demand, and support sustained economic expansion. These developments have also contributed to a more conducive operating and funding landscape across sectors.

While headline inflation remained benign at the macro level, cost pressures the Company experienced firming at the operational level, particularly during the third and fourth quarters of FY 2025-26. Prices of key raw materials, including stainless steel and copper, rose during this period, compounded by elevated logistics costs stemming from prevailing geopolitical tensions. This input cost inflation, together with lower realisations under the Magel Tyala

Scheme, weighed on the Company s profitability. The

Company continues to pursue backward integration and strategic procurement initiatives to mitigate the impact of such raw material price volatility going forward.

3.48%	5.25%
CPI Inflation, April 2026	RBI Repo Rate (February 2026) s of this Karnataka programme,
3.00%
Cash Reserve Ratio (CRR)

Outlook

Indias strong economic growth, increasing focus on sustainable agriculture, and continued investments in renewable energy and water infrastructure are expected to create favourable opportunities for Shakti Pumps (India) Limited. Growing adoption of solar-powered irrigation systems and energy-efficient pumping solutions, supported by various government initiatives, is likely to drive demand across key markets.

With its strong product portfolio, integrated manufacturing capabilities, and established market presence, the Company is well positioned to capitalize on these opportunities and sustain its growth trajectory in the years ahead.

Acceptance of solar pumps continues to widen across India, anchored by PM-KUSUM and complemented by a growing number of state-level solar irrigation programmes. Beyond its traditional strongholds, the Company has steadily expanded into newer geographies, including receiving its maiden order from Karnataka during the year for Rs.4,760 Mn. The Company s maiden order win from Karnataka exemplifies how state participation is expanding in the PM-KUSUM Scheme as well as state-led programmes. Shakti Pumps has been one of the firstandlargest demonstrating how the Company s geographic diversification strategy is translating directly into order book growth. This broadening of the addressable state base, alongside continued momentum under PM-KUSUM and state-run schemes, provides Shakti Pumps with a more diversified and resilient order pipeline going forward.

The Companys retail solar pump business is also gaining meaningful traction, supported by an expanding network of 100+ exclusive outlets and zero-interest financing tie-ups that improve affordability for farmers and households. Retail and cash sales contributed approximately Rs. 774 Mn in FY 2025-26, providing Shakti Pumps with a revenue stream that is less dependent on government tender cycles, carries stronger margins, and builds direct, long-term relationships with end-consumers - a channel the Company intends to continue scaling in the years ahead.

The Company is also diversifying into adjacent, high-growth segments: Solar Rooftop (90+ dealers under PM Surya Ghar), Solar DCR Cells & Modules (a 2.2 GW backward-integration facility expected to improve margins, given DCR cells form 40-50% of pump-set costs), and Electric Vehicles (motors, controllers and chargers via Shakti EV Mobility). Together, these are expected to reduce dependence on any single scheme and open new, higher-margin growth avenues.

INDUSTRY OVERVIEW

Pump Industry

The pump industry represents one of the most fundamental pillars of global industrial infrastructure and economic development. Pumps are indispensable mechanical systems designed to transport liquids, gases, slurries, and semi-fluids by converting mechanical energy into hydraulic energy. Their applications span virtually every major sector of the economy, making the industry critical to industrial operations, urban infrastructure, energy systems, agriculture, and public utilities. From municipal water supply and wastewater treatment to oil & gas, chemicals, pharmaceuticals, mining, power generation, construction, and food processing, pumps serve as the backbone of fluid handling systems worldwide.

Driven by rapid urbanization, industrial expansion, technological advancement, and increasing emphasis on energy efficiency and sustainability, evolved into a highly sophisticated and strategically important global sector.

Global Pump Industry

The global pump industry represents a critical segment of the industrial and infrastructure ecosystem, driven by increasing demand across water & wastewater treatment, oil & gas, power generation, chemicals, agriculture, construction, and HVAC applications. According to Global Market Insights, the global pumps market was valued at approximately USD 57.6 billion in 2025 and is projected to reach nearly USD 92.5 billion by 2035, growing at a CAGR of around 4.9%. The market growth is primarily supported by rising urbanization, industrialization, infrastructure modernization, and increasing investments in water management systems. Centrifugal pumps continue to dominate the market owing to their extensive usage across industrial and municipal applications, while electrically driven pumps account for the majority share due to increasing adoption of energy-efficient and automated systems.

Technological advancement is emerging as a major transformation driver within the industry, with manufacturers increasingly focusing on smart pumps, IoT-enabled monitoring, predictive maintenance, AI-based diagnostics, and energy-efficient pumping solutions. Asia-Pacific remains the largest and fastest-growing regional market, led by China and India, supported by strong manufacturing activity, infrastructure development, and government investments the pumpindustryhas in water and irrigation projects. In parallel, growing demand from semiconductor manufacturing, renewable energy, wastewater treatment, and data center infrastructure is further strengthening long-term industry prospects. Despite challenges such as raw material price volatility and intense market competition, the global pump industry is expected to maintain steady growth, supported by sustainability initiatives and expanding industrial demand. https://www.gminsights.com/industry-analysis/pumps-market

Indian Pump Industry

The Indian industrial pump market is on a steady expansion trajectory, supported by accelerating industrialization, large-scale public infrastructure investment, and a structural shift toward energy-efficient and automated fluid-handling systems. According to Verified Market Research (December 2025), the market was valued at USD 2.35 billion in 2024 and is projected to reach USD 4.04 billion by 2032, growing at a CAGR of 7% over the forecast period.

Parameter	Data Point
Study Period	2021 \u2013 2032
Base Year Market Size (2024)	USD 2.35 Billion
Market Size (2026E)	USD 2.69 Billion
Market Size (2032F)	USD 4.04 Billion
Forecast CAGR (2026\u20132032)	7%
Market Concentration	Medium

The PAT scheme under the National Mission for Enhanced Energy Efficiency is accelerating adoption of energy-efficient pumps, emissions by 140 million tons by 2030. Pharmaceutical manufacturing with broader efficiency measures projected to cut CO 2 hubs, particularly Bengaluru, are emerging as a high-value demand pocket, with Karnataka targeting a tripling of pharma exports to USD 5 billion by 2025.

CPI based inflation and Food inflation

Energy efficiency and smart pumping solutions are shaping the industry landscape in FY 2025 26, with IoT-enabled systems, automation, and predictive maintenance witnessing increasing adoption across water utilities, refineries, and industrial facilities.

Centrifugal pumps continue to dominate the market owing to their wide-ranging applications in water treatment, chemicals, and power generation, while positive displacement pumps are gaining traction in pharmaceutical and food processing sectors that require high-precision fluid handling.

The 2025 26 environment is constructive: water infrastructure spending is at an inflection point, pharmaceutical and chemical capex is robust, and regulatory tailwinds firmly favour energy-efficient solutions. Players able to combine smart, IoT-ready product lines with cost-competitive domestic manufacturing are best positioned to capture share in what is expected to be a USD 2.69 billion market by 2026.

SUBMERSIBLE PUMPS

Submersible pumps play a vital role in water extraction, irrigation, municipal water supply, industrial operations, and wastewater management. Designed to operate while fully submerged in water, these pumps offer high efficiency, reliability, and lower energy consumption compared to conventional pumping systems. Growing demand for efficient water management solutions, expanding agricultural activities, rapid urbanization, and increasing investments in infrastructure development continue to drive the adoption of submersible pumps across domestic and international markets. Additionally, the rising focus on sustainable water usage and energy-efficient technologies is further supporting long-term growth prospects for the industry.

Global Submersible Pumps

The global submersible pump industry is experiencing steady growth, supported by increasing investments in water & wastewater management, agricultural irrigation, industrial infrastructure, mining, oil & gas, and urban development projects. According to Grand View Research, the global submersible pumps market was valued at approximately USD 13.3 billion in 2025 and is projected to reach nearly USD 19.4 billion by 2033, expanding at a CAGR of 5.1% during the forecast period from 2026 to 2033. https://www.grandviewresearch.com/industry-analysis/submersible-pumps-market-report

The market growth is being driven primarily by rising investments in water infrastructure, rapid urbanization, increasing agricultural irrigation requirements, industrialisation & mining activities and growing adoption of energy-efficient pumping technologies. Water & wastewater management continues to represent the largest application segment globally, while Asia-Pacific dominates the market due to strong demand from China, India, and Southeast Asia. Borewell submersible pumps account for the largest product share owing to their extensive use in agriculture and municipal water supply systems. In addition, technological advancements such as IoT-enabled smart pumps, predictive maintenance systems, high-efficiency motors, and solar-integrated pumping solutions are transforming the competitive landscape of the industry.

https://www.datainsightsmarket.com/reports/submersible-pump-1510279

Indian Submersible Pump

The India submersible pumps market is witnessing steady growth driven by increasing agricultural irrigation demand, rapid urbanization, and rising investments in water and wastewater infrastructure. According to IMARC Group, the India submersible water pumps market was valued at USD 441.26 million in 2024 and is projected to reach USD 652.94 million by 2033, growing at a CAGR of 4.45% during 2025 2033. In addition, the broader India water pumps market reached nearly USD 2.07 billion in 2025 and is expected to reach USD 3.01 billion by 2034.

https://www.imarcgroup.com/india-water-pumps-market

SOLAR PUMPS

Solar pumps have emerged as a sustainable and cost-effective solution for water pumping requirements across agriculture, rural water supply, and other off-grid applications. Powered by solar energy, these systems reduce dependence on conventional electricity and fossil fuels while providing reliable access to water in remote and underserved areas. Growing emphasis on renewable energy adoption, water conservation, and climate-resilient agricultural practices has accelerated the deployment of solar pumping solutions globally. In India, supportive government initiatives and increasing investments in clean energy infrastructure continue to drive market growth, positioning solar pumps as a key component of the countrys sustainable development and agricultural modernization efforts.

Global Solar Pumps

The global solar pump market has entered a robust growth phase in 2025-26, supported by declining photovoltaic (PV) system costs, favourable government policies across emerging economies, and a structural shift away from diesel-driven irrigation.

The global solar pump market was valued at USD 2.95 billion in 2025 and is projected to grow from USD 3.16 billion in 2026 to nearly USD 5.68 billion by 2035, registering a CAGR of 6.77% during the forecast period from 2026 to 2035.

Indian Solar Pumps

Solar pumps are gaining significant traction across rural and off-grid regions conventional electricity and diesel-powered irrigation systems.

According to Market Research Future, the India solar pump market was valued at USD 432.0 million in 2024 and is projected to reach approximately USD 933.12 million by 2035, expanding at a CAGR of 7.25% during the forecast period from 2025 to 2035. The market growth is primarily driven by increasing government subsidies, rising awareness regarding clean energy adoption, and growing demand for cost-effective irrigation solutions.

Government programs such as PM-KUSUM are playing a critical role in accelerating solar pump installations across agricultural regions by providing financial assistance and promoting decentralized solar energy generation. The agricultural sector continues to account for the largest share of demand, as farmers increasingly adopt solar-powered pumping systems to address rising energy costs and unreliable grid connectivity.

Key Growth Drivers

Government Support and Subsidy Programs

PM-KUSUM and other government initiatives are accelerating the deployment of solar-powered irrigation pumps across rural India Financial incentives and subsidies are reducing the upfront installation cost for farmers Government focus on renewable energy adoption is creating favorable market conditions

Growing Agricultural Irrigation Demand

Increasing dependence on groundwater irrigation is driving demand for reliable pumping solutions

Solar pumps help farmers address power shortages and ensure uninterrupted water supply

Rising need to improve agricultural productivity is supporting market expansion

Shift Toward Clean and Cost-Effective Energy

Farmers are increasingly replacing diesel-powered pumps with solar-powered alternatives to reduce operating costs Declining solar PV panel prices are improving the affordability of solar pump systems Growing awareness of sustainable farming practices is encouraging clean energy adoption

Expansion of Rural Electrification and Off-Grid Solutions

Solar pumps provide a viable solution in regions with limited or unreliable grid connectivity

Rising investments in rural infrastructure are supporting market penetration Off-grid solar irrigation systems are gaining popularity in remote agricultural areas

Technological Advancements and Product Innovation

Manufacturers are introducing energy efficient and high - performance solar pumping systems Integrationofsmartmonitoringandautomationfeaturesisimprovingoperational Enhanced durability and lower maintenance requirements are increasing customer adoption

GOVERNMENT SCHEMES & PROGRAMS SUPPORTING SOLAR PUMPS IN INDIA

PM-KUSUM Scheme

Supports the installation of standalone solar agricultural pumps through Central Government subsidies of 30%of the project cost.

Promotes replacement of existing diesel pumps with standalone solar pumps and the solarisation of existing grid-connected agricultural pumps, reducing dependence on conventional power sources and diesel. Enables farmers to set up grid-connected solar power plants of up to 2 MW on barren or fallow land, creating an additional source of income through the sale of electricity to DISCOMs.

Accelerates the adoption of solar-powered irrigation infrastructure, supporting sustainable agriculture and rural energy transition.

https://pmkusum.mnre.gov.in/#/landing

Atmanirbhar Bharat & Make in India

Encourages domestic manufacturing and localisation of critical industrial products.

Strengthens opportunities for indigenous manufacturers in government-led projects and procurement.

Supports Indias vision of self-reliance in renewable energy and agricultural infrastructure.

National Solar Mission

Supports Indias target of achieving 500 GW of non-fossil fuel energy capacity by 2030.

Accelerates deployment of solar-powered infrastructure across agricultural and rural sectors.

Creates a long-term demand ecosystem for solar pumps and integrated solar water management solutions.

PM KUSUM

Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) is a flagship initiative of the Ministry of New and Renewable Energy (MNRE), Government of India. Launched in 2019, the scheme is designed to empower farmers through sustainable solar energy adoption, reduce the farm sectors dependence on fossil fuels, and ensure energy and water security for agriculture across India.

Component A - Decentralized Ground/Stilt-Mounted Grid-Connected Solar Plants

This component promotes the installation of decentralized solar power plants ranging from 500 kW to 2 MW on barren or fallow land by farmers, cooperatives, and panchayats. The generated power is sold to DISCOMs under long-term PPAs, creating an additional income stream for rural stakeholders. Against a target of 10,000 MW, approximately 1,437.77 MW had been installed as of May 2026.

Component B - Standalone Solar Powered Agriculture Pumps

Under Component B of the PM-KUSUM scheme, the Government of India is promoting the installation of 13.07 lakh standalone solar-powered agricultural pumps of up to 10 HP capacity in off-grid and underserved rural areas to provide farmers with reliable, clean, and cost-effective irrigation solutions. To encourage widespread adoption, the scheme offers an attractive financial assistance structure. Farmers receive a 30% Central Financial Assistance (CFA) and at least 30% subsidy from State Governments, reducing the farmers contribution to a maximum of 40%. Through institutional financing, farmers may be required to pay only 10% upfront, with the remaining share financed through bank loans. For special category states including the North-Eastern States, Jammu & Kashmir, Himachal Pradesh, Uttarakhand, Lakshadweep, and Andaman & Nicobar Islands, the Central subsidy increases to 50%, further improving affordability. The scheme plays a crucial role in enhancing agricultural productivity by enabling uninterrupted daytime irrigation, reducing fuel costs, and promoting sustainable farming practices. As of May 2026, more than 11 lakh standalone solar pumps had been installed under Component B, demonstrating strong implementation momentum while leaving substantial growth potential against the overall target.

By reducing dependence on conventional energy sources and enabling sustainable irrigation practices, Component B is playing a pivotal role in advancing energy-efficient agriculture while creating significant growth opportunities for solar pumping solution providers.

Component B

13,07,190

Sanctioned Nos

11,24,074

Installed Nos

Component B Pump Specifications

PARAMETER	DETAILS
Pump capacity range	1 HP to 25 HP
Solar array size	1.2 kW to 22.5 kW
Pump type	Surface or submersible (depending on water source)
Water discharge	42,000-12,00,000 litres per day (varies by pump HP and head)
CFA coverage	30% central + state share (varies with minimum 30%in state)

Technical specification dated 22-March-2023 and Comprehensive implementation guidelines dated 17-January-2024, both issued by MNRE

Component C - Solarisation of Grid-Connected Agriculture Pumps

Component C promotes the solarisation of existing grid-connected agricultural pumps, enabling farmers to use solar energy for irrigation while earning additional income by selling surplus power to the grid. The initiative supports energy independence, reduces reliance on conventional electricity, and accelerates the adoption of sustainable solar-powered irrigation solutions across Indias agricultural sector.

PM-KUSUM Component C (Feeder-Level Solarisation)

Component C (FLS) of the PM-KUSUM scheme aims to solarise agricultural feeders by setting up decentralized solar power plants that supply clean energy directly to agriculture-dominated distribution feeders. The initiative is designed to provide farmers with reliable daytime electricity for irrigation, reduce the subsidy burden on DISCOMs, and lower dependence on conventional power sources. With a target of solarising 35 lakh grid-connected agricultural pumps, including through feeder-level solarisation, the scheme is accelerating the deployment of rural solar infrastructure while strengthening the adoption of sustainable and energy-efficient irrigation systems across Indias agricultural landscape.

Component C (FLS)

35,36,602

Sanctioned

15,89,432

Solarised

As on date

https://pmkusum.mnre.gov.in/#/landing

MAGEL TYALA SAUR KRUSHI PUMP YOJANA (MTSKPY)

The Magel Tyala Saur Krushi Pump Yojana is a flagship initiative of the Government of Maharashtra aimed at accelerating the adoption of solar-powered irrigation systems and providing reliable daytime power to farmers. The scheme seeks to install 10 lakh off-grid solar agricultural pumps over five years, making it one of the largest solar irrigation programmes in the country. By reducing dependence on grid electricity and diesel-powered pumps, the initiative is enhancing irrigation access, improving farm productivity, and supporting sustainable agricultural practices.

Key Highlights

10 Lakh Solar Pumps	1.52 Lakh+ Solar Pumps Installed
Targeted installation across Maharashtra over five years	Deployed under the scheme as of FY26
Rs. 1,105 Crore	45,911 Solar Pumps Installed in 30 Days
State subsidy sanctioned for FY26 to accelerate solar pump installations	Guinness World Record achieved by Maharashtra for the highest number of solar agricultural pump installations in a month highest contribution of 8846 nos. of installation by Shakti Pumps
10 Lakh+ Acres
Expected to benefit through improved irrigation access and energy-efficient farming

-5cr-solar-pumps-subsidy/articleshow/127827522.cms https://timesofindia.indiatimes.com/city/aurangabad/msedcl-sets-world-record-for-installing-maximum-solar-agricultural-pumps-in-a-month/articleshow/125794129.cms https://energy.maharashtra.gov.in/en/scheme/magel-tyala-saur-krishi-pump-yojana/

INDIA SOLAR ROOFTOP INDUSTRY

Indias rooftop solar sector is witnessing unprecedented growth, driven by supportive government policies, rising electricity tariffs, increasing consumer awareness, and the growing adoption of clean energy solutions. The launch of the PM Surya Ghar: Muft Bijli Yojana has further accelerated residential rooftop solar installations, transforming the segment into one of the fastest-growing pillars of Indias renewable energy ecosystem.

17.95GW	214.25GW
Installed Capacity 2025	Projected Capacity 2035
28.4% CAGR	25.73 GW
2026-35	Cumulative Rooftop March 2026

Growth Drivers

Strong policy support through PM Surya Ghar and state-level rooftop solar incentives.

Rising electricity costs, encouraging residential, commercial, and industrial consumers to adopt solar energy. Growing focus on energy independence, sustainability, and decarbonisation.

Expanding net-metering frameworks and improved financing options supporting faster adoption.

Suitable Rooftop Solar Plant Capacity for households

Average Monthly Electricity Consumption (units)	0-150	150-300	>300
Suitable Rooftop Solar Plant Capacity	1-2 kw	2-3 kw	Above 3 kw

PMSURYAGHAR:MUFTBIJLI

Launched in February 2024, PM Surya Ghar: Muft Bijli Yojana is the worlds largest rooftop solar programme, aimed at enabling 1 crore households to install rooftop solar systems and reduce their electricity expenses. The scheme provides substantial Central Financial Assistance (CFA) for residential rooftop solar installations and is expected to add up to 30 GW of rooftop solar capacity, while generating significant employment opportunities across the renewable of distributed solar energy, the initiative is strengthening Indias clean energy transition, reducing dependence on conventional power sources, and creating a robust demand ecosystem for solar modules, inverters, mounting structures, and allied solar infrastructure solutions.

Key Highlights

1 Crore households targeted for rooftop solar adoption

Up to 300 units of free electricity per month for beneficiary households

Expected addition of 30 GW rooftop solar capacity

Central Financial Assistance (CFA) to support residential rooftop solar installations

Supports Indias renewable energy goals while promoting energy self-sufficiency and reduced carbon emissions

Shakti Pumps Position for Inverter Solutions

SunShakti Grid-Tie Inverter is a high-performance solar inverter series available single phase up to 6 kW and 3 phase up to 20 kW delivering up to 98% peak efficiency for maximum energy harvesting. Our solar inverters fully comply with BEEs star labeling norms of minimum efficiency inline to Gazette Notification issued by Ministry of Power, and also meet & comply the conditions of Class-1 Local Supplier as mentioned in Make-In-India order dated 19-July-2024 issued by DPIIT, Ministry of Commerce And Industry.

Designed for Indian climatic conditions. Its IP67-rated enclosure, intelligent digital controls, remote monitoring, and comprehensive protection features provide a durable, reliable, and efficient solution for rooftop solar installations.

DOMESTIC CONTENT REQUIREMENT (DCR) MODULE

At the heart of Indias solar push is a critical compliance layer the Domestic Content Requirement (DCR). Mandated by MNRE, DCR requires that solar PV cells and modules used in government-backed projects be domestically manufactured, directly supporting Indias Atmanirbhar Bharat goals. To enforce this, NISE (National Institute of Solar Energy) runs the DCR Verification Portal, a centralized platform that traces every panel from cellproductiontofinalmodule assembly and issues tamper-proof DCR certificates verifiable by any stakeholder.

The portal links directly to the ALMM (Approved List of Models and Manufacturers) Solar PV modules that comply are both ALMM-list I as well as list II and DCR-certified are eligible for schemes like PM Surya Ghar. With over 31.88 GW of modules registered, 4.65 million DCR certificates issued, and 42,000+ companies onboarded, the system has quietly become the compliance backbone of Indias rooftop and utility solar supply chain. For EPCs, resellers, and project developers, DCR compliance is no longer optional - its the entry ticket.

https://solardcrportal.nise.res.in/

Objective

Enforce domestic manufacturing compliance across Indias solar PV supply chain Ensure cells and modules in government-backed projects are genuinely Made in India Eliminate risk of imported components being misrepresented as domestic

Bring end-to-end traceability from cell production to final module deployment

Support Indias Atmanirbhar Bharat and 300 GW renewable energy target by 2030

Key Mandates

Solar cells and modules must be domestically manufactured for all government-supported solar projects - modules must be made from cells listed on ALMM List-II, which are by definition domestically manufactured Reslink Energy

From June 1, 2026, solar modules used in government-linked projects, PM Surya Ghar, PM KUSUM, open access, C&I segment and net-metered installations must use cells from ALMM List-II Kondaas Automation

Purely private C&I installations with no subsidy or government scheme connection are currently exempt - but should be monitored for future applicability

Shakti Pumps Positioning in the DCR Segment

Shakti Pumps has strategically positioned itself as a key beneficiary of India s DCR policy by investing Rs.12,000 Mn to establish a 2.2 GW solar DCR cell and PV module manufacturing facility in Pithampur, Madhya Pradesh, through its wholly owned subsidiary Shakti Energy Solutions Limited.

DCR cells account for approximately 40-50% of the total cost of a solar pump set, making in-house cell manufacturing a decisive competitive advantage under schemes such as PM-KUSUM, Magel Tyala Saur Krushi Pump Yojana, and Pradhan Mantri Krishak Mitra Surya Yojana, all of which mandate the use of domestically manufactured components. With 0.5 GW of DCR module capacity expected to be commissioned soon the Company is transitioning from being a buyer of compliant cells to a vertically integrated manufacturer - improving cost control, ensuring supply security, and strengthening its eligibility and competitiveness across government-linked solar programmes. This backward integration reinforces

Shakti Pumps alignment with India s Atmanirbhar Bharat objectives while protecting margins in an environment where DCR-compliant cell supply remains constrained relative to demand.

ELECTRIC VEHICLE SEGMENT

Indias electric vehicle (EV) industry continued its strong growth trajectory in FY25-26, supported by favourable government policies, expanding charging infrastructure, increasing model availability, and growing consumer acceptance of sustainable mobility solutions. The industry witnessed record sales across vehicle categories, reinforcing Indias position as one of the worlds fastest-growing EV markets.

Key Industry Highlights

24.5 Lakh+ EVs Sold	8.5% EV Penetration
Record EV registrations in FY25-26, reflecting 25% year-on-year growth	Share of EVs in total vehicle registrations increased from 7.7% in FY25
14 Lakh+ Electric Two-Wheelers Sold	2 Lakh Electric Passenger Vehicles
Accounting for nearly 57% of total EV sales	Passenger EV sales surged by over 80% year-on-year
29,000+ Public Charging Stations	30% EV Penetration Target
Installed across India as of December 2025	Government target for new vehicle sales by 2030

Key Growth Drivers

Government support through PM E-DRIVE, state EV policies, and GST incentives.

Rapid expansion of charging infrastructure and battery ecosystem.

Rising consumer preference for sustainable and cost-efficient mobility

Increasing participation from leading automotive manufacturers across vehicle segments.

https://www.autocarpro.in/analysis-sales/record-14-million-electric-2ws-sold-in-fy2026-command-57-share-of-india-ev-market-131938, https://www. evinfrastructurenews.com/ev-policies/india-s-ev-uptake-hits-8-5-in-fy2025-26-two-wheelers-drive-growth-jmk, https://www.business-standard.com/industry/ auto/ev-sales-surge-in-fy26-on-strong-q4-push-vahan-data-126040101172_1.html, https://www.ibef.org/industry/electric-vehicle?utm

Shakti Pumps Positioning in the EV Ecosystem

Leveraging its expertise in high-efficiency motors, power electronics, controllers, and integrated manufacturing, Shakti Pumps is strategically positioned to participate in Indias evolving electric mobility ecosystem. The Companys strong capabilities in energy-efficient motor technologies, variable frequency drives (VFDs), and electronic control systems provide a foundation for addressing emerging opportunities across EV components and allied applications. As India accelerates EV adoption and charging infrastructure deployment, Shakti Pumps is well-placed to capitalize on the growing demand for advanced electrical and power management solutions while leveraging its manufacturing scale, engineering expertise, and proven track record in sustainable technology-driven businesses.

COMPANY OVERVIEW

Shakti Pumps (India) Limited is a leading manufacturer of energy-efficient pumping solutions and one of Indias foremost players in the solar pumping industry. Established in 1982, the Company has built a strong reputation for innovation, engineering excellence, and sustainable technologies, serving customers across agriculture, water management, industrial, residential, and renewable energy sectors.

Over four decades, Shakti Pumps has evolved into a fully integrated clean-tech enterprise with in-house manufacturing capabilities spanning pumps, motors, controllers, VFDs, inverters, and solar mounting structures. Backed by a diversified business model, strong R&D capabilities, and a global footprint across 100+ countries, the Company continues to play a pivotal role in advancing sustainable irrigation and renewable energy adoption. With a growing presence in emerging segments such as EV motors & controllers, solar rooftop, and solar module manufacturing, Shakti Pumps remains well-positioned to capitalize on Indias energy transition and agricultural modernization journey.

40+ YEARS	100+ COUNTRIES
Industry Experience	Global Experience
~25% MARKET SHARE	15
PM-KUSUM Solar Pump Scheme	Patents Granted

DIVERSIFIED SECTORS

Shakti Pumps operates across multiple business sectors solar, agriculture, commercial, domestic, industrial, sewage & drainage, retail and exports each contributing to a well-balanced and resilient revenue mix. In FY 2025-26, the Company s strategic emphasis was on accelerating solar pump execution, deepening the retail channel, scaling export order fulfilment and laying the groundwork for DCR cell and module manufacturing. Collectively, these sectors generated a record consolidated revenue of Rs.26,976

Mn, reflecting the breadth and depth of Shakti s market positioning across India s

20% YOY GROWTH	Rs. 26,976 MN
Solar Pump Installations	Record Consolidated Revenue
GROWING EXPORT PRESENCE	DCR CELL & MODULE MANUFACTURING
Expanding Global Footprint	Building Future-Ready Capabilities

Solar Sector

FY 2025-26 was a landmark year for Shakti Pumps in the solar segment. Solar pump installations grew 20% year-on-year for the full year, The Company held approximately 25% market share under the PM-KUSUM scheme, making it one of the single largest beneficiaries among solar pump manufacturers in India.

The Companys focus on innovation, product reliability, backward integration, and operational efficiency continues to strengthen its competitive positioning. By offering end-to-end solar pumping solutions, including pumps, motors, controllers, structures, and system integration, Shakti Pumps remains well placed to capitalise on the growing adoption of renewable energy-powered water management solutions.

Agriculture Sector

The agriculture segment remained the backbone of Shakti Pumps domestic revenue in FY 2025-26, driven by continued execution under government-sponsored solar irrigation schemes. The Company executed large-scale orders under the Magel Tyala Saur Krushi Pump Yojana in Maharashtra and the Pradhan Mantri Krishak Mitra Surya Yojana in Madhya Pradesh, which is steadily expanding in scale and is expected to unlock substantial order opportunities in FY27.

Commercial Sector

In the commercial segment, Shakti Pumps maintained a steady presence supplying high-pressure, multistage and booster pump systems to hotels, corporate office complexes, shopping centres and large commercial establishments. The segment benefited from continued urban real estate activity and the ongoing expansion of Grade A commercial infrastructure across major Indian cities.

With India s commercial construction pipeline remaining robust particularly in Tier-1 cities and emerging Tier-2 markets demand for reliable, energy-efficient pressure management solutions continued to grow. Shakti s product certifications including CE and ISO, alongside its proven service network of 400+ service centres, supported customer confidence and repeat procurement in this segment during the year.

Domestic Sector

The domestic sector witnessed steady growth in FY 2025-26, underpinned by India s expanding residential housing market and rising consumer awareness around energy-efficientwater management. Shakti Pumps retail push

- including the opening of 100+ exclusive outlets and the Plug N Play pump range that eliminates the need for a separate control box

- resonated strongly with urban and semi-urban homeowners seeking ease of installation and reliability. The Company s association with financial institutions to offer zero-interest instalment financing further lowered barriers to purchase for first-time buyers.

Industrial Sector

The industrial segment contributed Rs.362 Mn in revenue in FY 2025-26, with Shakti Pumps serving a range of end-use applications including process cooling, fire suppression, fluid transfer and industrial wastewater management across manufacturing plants, infrastructure sites and utility facilities. The segment also reflects the Company s OEM relationships with leading conglomerates including L&T, Mahindra, REIL, Adani and Tata Power.

While the Company is strategically reducing its reliance on low-margin OEM supply in favour of higher-value branded sales, the industrial segment continues to provide base-load revenue, enhance brand credibility and expand

Shakti s presence in end-markets beyond agriculture a meaningful diversification as India s industrial capex cycle accelerates.

Sewage & Drainage Sector

Shakti Pumps continued to support India s urban sanitation and civic water infrastructure in FY 2025-26 through the supply of sewage and drainage pump systems. These were deployed across applications ranging from residential basement dewatering and parking area drainage to municipal wastewater treatment plants and stormwater management systems.

The Company s waste water pump range constructed with 100% AISI 304 stainless steel bodies, vortex impeller technology and IP-rated enclosures - is engineered for dependable, low-maintenance operation in corrosive environments. With India s Smart Cities Mission and AMRUT 2.0 driving continued investment in urban water and sanitation infrastructure, this segment is expected to see growing tender activity in the years ahead.

Retail Sector

The retail segment emerged as one of the most strategically important growth levers for Shakti Pumps in FY 2025-

26. Unlike government scheme revenues, which are subject to tender timelines and budget release cycles, retail sales generate immediate cash inflows, carry stronger margins and build direct long-term relationships with end-consumers. In FY26, the Company generated approximately Rs.774 Mn in retail cash sales - a meaningful and growing contribution to the overall revenue mix.

During the year, Shakti Pumps expanded its exclusive outlet network to 100+ locations, onboarded 90+ new dealers for its Solar Rooftop business, and continued offering zero-interest financing partnerships to make solar and submersible pump ownership accessible to small farmers and households. The Company s focus on deepening the retail channel is a deliberate strategy to build a more diversified, resilient revenue base less correlated with government spending cycles.

Exports Business

The exports segment delivered Rs.4,110 Mn in revenue in FY 2025-26, maintaining a 21% CAGR over FY23-26 and accounting for approximately 15% of overall Company revenue.

During the year, the Company made steady progress in executing the USD 35.30 million contract from the Government of Uganda for solar-powered water pumping systems. The project contributed to strengthening the Company s export order book and expanding its international footprint, demonstrating the versatility and global applicability of its product portfolio.

The Company s participation in the International Solar Alliance (ISA) continues to open doors to multi-country tendering opportunities, with aggregated ISA demand spanning over 2,70,000 solar pumps across 22 countries and more than 1 GW of rooftop solar across 11 countries. With its integrated manufacturing base, international certifications and growing service network, Shakti Pumps is well positioned to convert this pipeline into structured order flows in the coming years.

Domestic Content Requirement (DCR) Cell and Module

The Government of Indias DCR policy mandates the use of indigenously manufactured solar cells and modules across all government-supported schemes including PM-KUSUM, PM Surya Ghar and CPSU making domestic cell and module production a non-negotiable compliance requirement for any player operating in the government solar space. For Shakti Pumps, where DCR cells account for 40-50% of the total cost of a solar pump set, this policy has a direct bearing on both competitiveness and margins. In FY 2025-26, the Company took an important strategic decision- committing Rs.12,000 Mn to establish a 2.2 GW solar DCR cell and PV module manufacturing facility at Pithampur, Madhya Pradesh, under its wholly owned subsidiary Shakti Energy Solutions Limited, on 113 acres of MPIDC-sanctioned land. The first phase of 0.5 GW module capacity is on track for commissioning. With MNREs ALMM List-II mandate now effective June 2026 making domestically manufactured cells compulsory across all government projects, net-metered and open access installations with no further relaxations - this investment positions Shakti Pumps as a vertically integrated solar energy solutions provider with a structural, durable advantage in Indias fast-expanding domestic solar manufacturing ecosystem.

FINANCIAL PERFORMANCE

Revenue from Operations grew to Rs.26,976 million in FY26, compared to Rs.25,163 million in FY25, reflecting a year-on-year growth of 7.2%. This growth was underpinned by a significant ramp-up in solar pump installations, which increased by 20% YoY in FY26, with Q4 FY26 alone recording a 51% YoY increase, after the Company consciously moderated execution in Q3 FY26 to address elevated receivable levels and manage the overall balance sheet strength. The Company also delivered its highest-ever quarterly revenue of Rs.8,578 million in Q4 FY26, demonstrating strong execution momentum.

Working Capital Management

During the year, the Company adopted a disciplined execution approach with strong emphasis on collections, working capital optimization, and financial stability. Average debtor days stood at 173 days in FY26 compared to 152 days in FY25. However, the company made significant progress in collections inQ4FY26, reducing Rs.4,200 Mn to Rs.12,757 Mn as of March 31, 2026, and generated operating cash flow of Rs.1,241 Mn for the full year - marking a clear improvement over Rs.205 Mn in FY25.

Key Ratios

Key Ratios	FY 2025-26	FY 2024-25
EBITDA Margin (%)	15.60%	24.00%
PAT Margin (%)	9.50%	16.20%
Debt Equity Ratio	0.30	0.10
Return on Assets	17.90%	43.90%
Return on Equity	17.92%	42.61%
Current Ratio	2.12	2.27
Debtors Turnover	2.32	2.93
Inventory Turnover	6.76	7.87
Interest Coverage Ratio	7.10	13.60

Human Resources

People remain at the heart of Shakti Pumps growth journey, serving as a key enabler of innovation, operational excellence, and long-term value creation. The Company continues to foster a performance-driven and inclusive work culture that empowers employees to contribute meaningfully to organizational success. Through focused investments in capability building, technical training, leadership development, and employee engagement initiatives, Shakti Pumps is strengthening its talent pool and enhancing workforce productivity.

The Company remains committed to creating a safe, collaborative, and growth-oriented workplace that encourages continuous learning and professional development. Employee well-being, workplace safety, and skill enhancement continue to be integral to its human resource strategy. By nurturing a motivated and future-ready workforce, Shakti Pumps is well-positioned to support its expanding business operations and capitalize on emerging opportunities in the renewable energy and water management sectors.

Risk & Concern

Risk	Description	Mitigation Strategy
Policy & Scheme Dependency Risk	A significant portion of the Companys solar pumping business is driven by government-led initiatives such as PM-KUSUM and state-level solar irrigation programmes. Any delay in implementation, modification, or discontinuation of such schemes may impact business growth.	Expanding presence across retail, industrial and export markets; diversifying participation across multiple state programmes; strengthening engagement with policymakers and nodal DISCOM to enhance market visibility.
Working Capital & Receivables Risk	Large-scale government projects typically involve extended payment cycles, which may exert pressure on liquidity and working capital requirements.	Enhancing receivables management processes, improving collection efficiencies, maintaining prudent working capital discipline, and increasing contribution from faster-cash- conversion business segments.
Raw Material Price Volatility	Volatility in the prices of key inputs such as stainless steel, copper, electronic components and solar equipment may impact operating margins and profitability.	Leveraging backward integration, entering into strategic procurement arrangements, optimizing product design, and driving operational efficiencies to mitigate cost pressures.
Export Market Risks	The Companys international operations expose it to currency fluctuations, geopolitical uncertainties, trade policy changes, and regional economic disruptions.	Maintaining a diversified footprint, implementing prudent hedging practices, and strengthening local partnerships and distribution networks across key export markets.
Technology Obsolescence Risk	Rapid advancements in solar, power electronics, and electric mobility technologies may shorten product lifecycles and increase competitive intensity.	Sustained investments in research and development, collaboration with leading academic and technical institutions, intellectual property creation, and continuous innovation in next-generation energy-efficient and smart solutions.

Internal Control System

The Company has a well-structured internal control system financial reporting, safeguard assets place to ensure accurate and maintain operational efficiency and compliance. During FY 2025 26, the Company further strengthened its controls through enhanced automation, ERP integration and periodic internal audits across key functions such as procurement, inventory, manufacturing and finance. The internal audit function operates independently and reports to the Audit Committee, ensuring transparency and timely corrective actions. Based on regular reviews and assessments, the Company believes its internal control systems are adequate and commensurate with the scale and complexity of its operations.

Cautionary Statement

The statements in the Board of Directors and Management Discussion & Analysis describing the Company s objectives, projections, estimates, expectations, or predictions may be forward-looking statements within the meaning of applicable securities laws and regulations. These statements are based on certain assumptions and expectations of future events, many of which are beyond the control of Shakti Pumps (India) Limited. Actual results, performance, or achievements could differ materially from those expressed or implied due to various factors such as changes in government policies, economic developments, global market conditions, climatic conditions, raw material prices and interest rate fluctuations. The Company assumes no obligation to update or revise any forward-looking statements, whether because of new information, future events, or otherwise.