The resilient domestic demand for conventional pumps and a surge in offtake of solar pumps are factors that will help agri pump makers see healthy revenue growth of 7-9 per cent in fiscal 2025
Demand for conventional and solar pumps will help agricultural pump makers see 7-9 percent revenue growth in 2024–25, a report said.
According to Crisil Ratings, the resilient domestic demand for conventional pumps and a surge in offtake of solar pumps, largely under the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM KUSUM) scheme, are factors that will help agri pump makers see healthy revenue growth of 7-9 percent in fiscal 2025.
This will follow a likely revenue growth of 8–10 percent in the current fiscal, it added.
"Factoring a normal monsoon in FY25, revenue growth for the industry will largely be volume-driven. While conventional pumps may see stable growth at 6–8 percent, solar pump volumes will grow at a faster clip of 20 percent year-on-year, supported by the expected reduction in pump prices," Crisil Ratings Senior Director Anuj Sethi said.
The report further stated that the operating margin, too, will remain healthy, at 12–13 percent this fiscal and the next, riding on improving operating leverage and with prices of key raw materials remaining steady.
This, along with a steady working capital cycle and moderate capital expenditure, will support credit risk profiles, it noted.
Demand for agri pumps is largely resilient; a 'good' monsoon drives up farm incomes and pump purchases, buoyed by healthy kharif (summer) crops, while a 'deficient' monsoon necessitates the usage of pumps to irrigate (winter) rabi crops, said the report.
This was also visible this fiscal, where revenue growth has been volume-driven, mainly driven by higher sales of conventional pumps amidst uneven monsoons caused by El Nino conditions.
Meanwhile, solar pumps are expected to become cheaper in FY25 as manufacturers pass on lower prices of solar modules, a key raw material forming 65–70 percent of solar pump costs.
This, combined with rising order flows under the PM KUSUM scheme, which is set to close in March 2026, will drive the double-digit volume growth expectations for the next fiscal, it stated.
Steady growth in volumes of conventional pumps coupled with the price of its key raw materials, pig iron, steel, and copper (forming 70–75 percent of the total cost), will keep operating profitability healthy at 12–13 percent this fiscal, it added.