Shakti Pumps shares rebound sharply, but stock remains down 46% YTD; what lies ahead?

Shares of Shakti Pumps (India) Ltd surged 16.52 per cent to hit a high of Rs 414.80 in Wednesday's trade. The stock was last seen trading 12.01 per cent higher at Rs 398.75. Despite the sharp rebound, the counter remains down 46.06 per cent year-to-date (YTD).

Choice Institutional Equities noted that the delay in the announcement of the PM-KUSUM 2.0 scheme has led to a significant de-rating of the stock.

"We maintain a cautious outlook for the sector driven by a paucity of orders and state-only scheme implementation. Q2 FY27 PAT was broadly in line with our estimate of Rs 40 crore," the domestic brokerage stated.

The brokerage highlighted persistent margin pressure amid rising costs and low realisations. It has revised its estimates, factoring in a delayed launch and ramp-up of the KUSUM 2.0 scheme.

"Consequently, we cut our revenue forecast by ~10 per cent and 11.5 per cent for FY28E and FY29E, respectively. Further rationalisation of EBITDA margin leads to an overall cut of ~25 per cent each in PAT for FY27E and FY28E," Choice added.

"We now estimate EBITDA margin of 15 per cent in FY29E as captive module supply scales up and KUSUM 2.0 restores order inflow. Our forecast builds Revenue/EBITDA/PAT CAGR of 14.6 per cent/13 per cent/13.3 per cent over FY26–FY29E, respectively," it also said.

Choice maintained its cautious stance on the stock, citing the pending announcement of a renewed KUSUM scheme. It cut its target price to Rs 410 per share from Rs 640 earlier, while retaining its 'ADD' rating.

From a technical perspective, AR Ramachandran, Sebi-registered research analyst at Tips2trades, said Shakti Pumps' stock was bullish on daily charts, with strong support at Rs 375.

"Only a daily close above the resistance of Rs 415 could trigger an upmove towards Rs 447 level in the near term," he added.