Low PE, High ROCE Pump Manufacturer Bags Bihar Rooftop Solar Projects With Revenue Potential Exceeding Rs 500 Crore; Shares Jump 9%

Indian equity benchmarks traded higher during Monday's opening session, with the benchmark Nifty 50 index gaining 326.65 points, or 1.38 per cent, to 23,949.55. Amid the broader market rally, Oswal Pumps share price jumps 8.76 per cent to Rs 433.10 after the company announced a major rooftop solar project win in Bihar.

Oswal Pumps Wins Orders Worth Over Rs 500 Crore

Oswal Pumps has secured three Letters of Award (LOAs) for the development of 63 MW of grid-connected rooftop solar projects across Bihar.

The orders have been awarded by North Bihar Power Distribution Company Limited (NBPDCL) and South Bihar Power Distribution Company Limited (SBPDCL) under the PM Surya Ghar: Muft Bijli Yojana (PMSG-MBY).

According to the company, the projects carry an aggregate installation value of approximately Rs 247 crore. In addition, the contracts offer an estimated long-term revenue opportunity of around Rs 257 crore over a 10-year period under the Renewable Energy Service Company (RESCO) model, taking the total revenue potential to more than Rs 500 crore.

Over 57,000 Consumer Installations Planned

The projects will be executed across the Motihari, Saharsa and Ara circles of Bihar and will cover approximately 57,492 consumer installations.

Under the PM Surya Ghar programme, each beneficiary household is expected to receive around 15,000 units of solar power over the contract period. The rooftop solar systems are scheduled to be commissioned within nine months from the execution of the Power Purchase Agreements, followed by 10 years of operations and maintenance services.

Oswal Pumps Comprehensive Project Scope

The scope of work includes design, engineering, procurement, manufacturing, quality assurance, transportation, installation, testing and commissioning of rooftop solar systems. The company will also undertake project financing, regulatory approvals, insurance, integration with Bihar DISCOMs' centralised monitoring system, energy supply and long-term maintenance responsibilities.

The projects have been awarded under the CAPEX plus RESCO Mode Utility-Led Aggregation (ULA) framework, making them a significant addition to the company's renewable energy portfolio.

Management Commentary

Commenting on the development, Vivek Gupta, Chairman and Managing Director of Oswal Pumps Limited, said. "This award represents a pivotal milestone for Oswal Pumps as we scale our participation in the PM Surya Ghar programme and strengthen our position in the distributed solar ecosystem. It not only underscores our execution capabilities but also marks a strategic shift towards diversifying revenue streams beyond PM Kusum. We remain committed to delivering high-quality installations and supporting India's transition towards clean, decentralised energy."

Oswal Pumps Strategic Expansion Beyond PM Kusum

The company stated that the orders mark an important strategic step in expanding its presence beyond the PM Kusum programme, where it has established a strong position in the solar pumping segment.

The long-tenure RESCO structure is expected to generate recurring annuity-style revenue streams over the project lifecycle, improving revenue visibility and business diversification.
Also Read - FII Stake Increases: This Microcap EPC Stock Bags Rs 673 Crore Order From SAIL; Share Price Jumps 9%

About Oswal Pumps

Oswal Pumps Ltd is one of India's leading manufacturers of pumps, electric motors and solar-powered pumping systems. The company caters to agriculture, residential, commercial and industrial customers through a diversified product portfolio. Despite the recent rally, Oswal Pumps continues to trade at a relatively attractive valuation with a stock PE of 12.7, significantly lower than the industry average PE of 41.1. The company also maintains a strong Return on Capital Employed (ROCE) of 38.2 per cent

In recent years, Oswal Pumps has significantly expanded its presence in the renewable energy sector through solar pumping solutions and government-backed solar infrastructure programmes. The company has emerged as a key beneficiary of India's clean energy transition and rural electrification initiatives.

What are your views on Oswal Pumps' entry into large-scale rooftop solar projects under the PM Surya Ghar scheme? Share your thoughts in the comments below.
Disclaimer: This article is for informational purposes only and does not constitute investment advice.