Accumulate Shakti Pumps; target of Rs 465: Arihant Capital

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Arihant Capital's research report on Shakti Pumps

Shakti Pumps came out with good set of results in Q4FY19, ahead of our estimates. Consolidated revenue for the quarter grew 22.1% YoY and 4.9% QoQ to Rs 1596 mn against our estimate of Rs 1580 mn. EBITDA for Q4FY19 came at Rs 279 mn (estimate Rs 340 mn) a growth of 17.1% YoY and 2.7% QoQ. However EBITDA margin fell 74bps YoY to 17.5% for the quarter against 18.2% in corresponding quarter last year. The fall in margin was due to higher raw material (+29% YoY) and staff costs (+28.4% YoY). PAT for the quarter stood at Rs 165 mn which was ahead of our estimate of Rs 120 mn, a growth of 64.9% YoY and 31.1% QoQ. The stupendous growth of PAT on YoY basis (+64.9% YoY) was partially due to lower effective tax rate for the quarter (19.4% in Q4FY19 v/s 43.3% in Q4FY18).

Outlook

We remain positive on Shakti Pumps from longer term perspective, and have an Accumulate rating with a revised target price of Rs 465.

For all recommendations report, click here

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