Shakti Pumps Shares Surge 11 Percent in Trading Session Despite Drop in Quarterly Profit

Shakti Pumps shares surged as much as 11 percent in Wednesday's trading session, driven by positive market sentiments on Dalal Street rather than any internal business trigger. The stock opened at 359 rupees per share, up from its previous close of 355.80 rupees on Monday, as trading volume spiked with around 95.32 lakh shares changing hands on the NSE during the intraday session.

Financial Results

The solar pump manufacturer reported a 12 percent year-on-year rise in consolidated revenue from operations, reaching 746 crore rupees for the second quarter of financial year 2027 compared to 666.4 crore rupees in the same period last year. However, profitability took a sharp hit as consolidated profit after tax plunged 57.6 percent to 38.5 crore rupees against 90.7 crore rupees a year ago, while profit before tax fell 59.3 percent to 49.5 crore rupees. Operating profitability also faced heavy pressure, with EBITDA declining 52.9 percent to 64 crore rupees and the EBITDA margin dropping sharply to 8.6 percent from 20.4 percent.

Market Context

The broader Indian equity benchmarks opened on a strong note, with the BSE Sensex surging 1,097.33 points to 82,186.92 and the NSE Nifty 50 advancing 274.30 points to 25,317.55, supported by foreign institutional inflows, better-than-expected September-quarter earnings, and falling crude oil prices. Despite the recent one-week recovery of 10.04 percent, Shakti Pumps shares remain down 5.60 percent over the past month, 46.50 percent year-to-date, and 46.97 percent over the past year, though longer-term gains show a 124.13 percent rise over three years and 254.02 percent over five years.

Brokerage Outlook

Brokerage firm Choice Broking has assigned an 'add' rating to the stock with a target price of 410 rupees, projecting an upside potential of up to 12 percent. The firm estimates an EBITDA margin of 15 percent by financial year 2029 as captive module supply scales up and the KUSUM 2.0 scheme restores order inflows, though it remains cautious and has revised its target price from 640 rupees pending the formal announcement of a renewed KUSUM scheme.

Context

Stock prices often experience sharp intraday rallies driven by overall positive market momentum and high trading volumes, even when individual company earnings show a decline in quarterly profits. Government schemes focused on solar irrigation, such as the KUSUM initiative, play a major role in driving order pipelines and long-term revenue growth for pump manufacturers in India.