https://x.com/caprize_invest/status/1932744583349477380?t=xHdubvBHfZp13vLxN0aXpw&s=19 OSWAL PUMPS ANALYST MEET -> Answering three critical Questions w.r.t. the Solar Pumps Sector & who will benefit? Solar Pumps & Services is a INR 12.9trn market (pumps constitute 15% opportunity size) --> more industry data in quoted thread. While the significance of KUSUM yojna is well known, there are 3 critical questions that the Oswal Pumps management answered: 1) Pricing Pressure This was the most talked point in concalls and analyst meet: Whether the pricing will sustain with increasing players? The answer is Big NO. Reason: Government wants to install 8 Cr Solar pumps, 90% of the players are pure EPC making 5 to 6% PAT, and out of remaining 10% only 2 companies are fully backward integrated. Pricing is more or less similar for all players. So, if any player tries to reduce the prices, 90% of the EPC players will struggle to make even 5% PAT margins. On the other hand entire demand cannot be catered by 2-3 players. Hence, its certain that Pricing is NOT going down. 2) Will freebies (like Laadki Behen) affect payment & execution? The answer again is a Big NO. Reason: Company mentioned that Solar Pump installation is a 40% RoI Game for the Government! And Kusum Yojna is a big cost saver for Government Working: For example, If 10KW avg power is required for a pump, governments ends up spending INR 3.5lacs of free electricity + Electricity connection expense for 2.5 years. Where as for a INR 4.5lacs pump, INR 1.15lacs is taken upfront from the farmer and 3.5 lakh is spent by government. After 2.5 years (out of useful life of 10 years) government saves approx ~10 Lakh on electricity per farmer. 3) Government's FOCUS on payment cycle To speed up the execution, Government now has clear focus on improving the payment days of vendors, which will in turn result in faster execution. OUR VIEW: As on date 7 lakh pumps are remaining from KUSUM 1, Government has to finish this in FY26. KUSUM 2 scheme planning has already started. KUSUM 2 Scheme is going to be big with component B & C to merge -> GoI has 2 Million pump installation target in FY 27. PM KUSUM is one of the most important government schemes in recent times as it promotes DCR cell (Largest utilizer of DCR panel), deposits green credits, major Savings for all stakeholders (read quoted tweet) + Election win benefits. We believe players who are backward integrated, have a good execution track record and most importantly have a strong good will at the farm level will benefit the most. Integrated companies like Shakti Pumps and Oswal Pumps (at a much reduced valuation from previously quoted 12000cr+ valuation) AND EPC players Australian Premium Solar and Sahaj Solar will benefit the most from this MEGA TREND.