Why Shakti Pump Share Price Is Falling? Week Quarter on Quarter performance

Shakti Pumps shares fell over 8% on Monday after the company reported its Q1 FY26 results. The stock closed at ₹825.55 on Monday. Here’s a closer look at the reasons behind the fall:

Modest Q1 Results Disappointed Investors

• While the company reported a year-on-year revenue growth of 9.7%, rising from ₹567.56 crore in Q1 FY25 to ₹622.50 crore in Q1 FY26, the sequential performance was weaker. Revenue was down 5.1% from ₹665.32 crore in Q4 FY25.
• Similarly, the EBITDA margin declined both sequentially and year-on-year. Margins came in at 23.1% in Q1 FY26, lower than 23.9% in Q1 FY25 and 24.6% in Q4 FY25.
• Net profit stood at ₹96.8 crore, up only 4.5% year-on-year but down 12.1% compared to ₹110.2 crore in the previous quarter. This sequential drop in profitability amid high valuations did not sit well with investors.

Capex Announcements Raise Borrowing Concerns

Shakti Pump has announced a capital expenditure of ₹1,700 crore across multiple verticals:

• ₹250 crore for expanding pumps, motors, and solar structures
• ₹250 crore for EV motor and charger facility
• ₹1,200 crore for a solar cell and PV module plant in Madhya Pradesh

The board also approved increasing borrowing limits to ₹3,000 crore, subject to shareholder approval, raising investor concerns over rising leverage, especially in a quarter with subdued profit growth.

Leadership Compensation

The board has proposed doubling the Chairman’s remuneration from ₹9 crore to ₹18 crore per annum. While the company justifies this based on continued leadership, the timing has been questioned, given only modest earnings growth.

Order Book and Business Outlook Remain Positive

Despite the near-term market reaction, the company’s fundamentals remain intact:

• ₹1,350 crore order book as of August 1, 2025
• Exports have grown at a 25% CAGR over the past four years
• Shakti continues to command a 25% share in India’s government solar pump schemes

Why Shakti Pumps Share Fell: Bottom line

The sharp fall in Shakti Pumps' share price was driven by:

• The 8% fall in Shakti Pumps’ stock reflects a mix of financial and sentiment-driven triggers. Despite posting year-over-year growth, the company’s Q1 FY26 results showed a clear slowdown in momentum, with a 12% sequential decline in profits, declining EBITDA margins, and muted top-line growth.
• This underwhelming performance came at a time when the company is announcing large capital expenditure plans and seeking to raise its borrowing limits. Investors are cautious about increased leverage, especially when profit growth isn’t keeping pace.
• While the company retains a strong order book and long-term prospects, near-term concerns, including earnings quality, funding mix, and executive decisions such as the proposed remuneration hike, have contributed to the recent share price correction.

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