Market is smarter than us …we are focusing on Q4 results and it seems market has started discounting Kusum 3.0.
As per latest Concal ,this time management commentary is a bit conservative and they are not committing on any numbers.
I had exited all my positions in Nov 21, however was tracking the Company and KUSUM scheme.
Kusum 3.0 is very big oppurtunity and it can completely rerate the Company and upward potential is 3x to 4x. However, we need to wait and see the same reflecting in numbers.
One good thing is that Company is conscious of taking project and is not only after topline growth. It undertakes projects where there are better margins and realisation. The Company had forgone the Haryana order of Rs 500 Cr last year as the margins had squeezed due to higher Raw material prices.
As per Q4 investor presentation:
“It gives me great pleasure to announce that the Solar Energy Corporation of India Limited (SECI) has sanctioned the issuance of new tenders for approximately 8.57 lakh solar pumps under the PM-Kusum scheme III, and Shakti Pumps has qualified in 21 states to provide Off Grid Solar Photovoltaic Water Pumping Systems. As the bidding process has concluded, we expect orders to be received from various states in the next 1 month. The major states,
including Maharashtra, Haryana, Rajasthan, Madhya Pradesh, and Punjab, make up 80% of the total requirement mentioned under the current tenders in the KUSUM scheme. As we are one of the largest solar pump manufacturers in India with a market share of around 30-35% in these major tendering states, we are optimistic about securing substantial orders, which will help us in the robust recovery of our Solar EPC business. Our in-house manufacturing, technological capability, experience, and strong product recall give us an advantage over our competitors.
Company and management is good however there is always an element of risk and uncertainty in B2G business.
Initiated tracking position today and will allocate further depending on the developments of Kusum Scheme and number reported by Comapny.
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