The Hindu Business Line : Shakti Pumps jumps on order flows

SHAKTI Pumps' market valuation is seeking higher levels on increasing flow of orders and capacity expansion plan. The stock on Monday closed up 1.60 per cent at Rs 145.80. The counter has gained 7.76 per cent in the last one week and 32.67 per cent in the past one month.

Mr Dinesh Patidar, Managing Director, told Business Line that it has recently bagged an export order worth $3 million from a Swiss company.

"The order would be executed in four quarters starting from next month. In each quarter, we would have to supply 2,600 stainless steel submersible pumps to the Swiss importer for the European market," he said.

Mr Patidar also confirmed that the company has planned a 10-fold increase in its capacity. The plan entails a new fully-automated unit at its Indore plant at a cost of Rs 50 crore.

"The funding has not been planned yet. We are considering the possibility of raising money through equity issue via preferential allotment route. We intend to begin trial production by next April. We would soon set the process of preparation in motion," he added.

The company, which follows the July-June financial year, has an order book backlog of around Rs 15 crore for the October-December quarter of 2005-06 against the first quarter to September 31, 2005 figure of around Rs 10 crore.

The company is also executing this fiscal an order worth $3 million from Vervent Inc, one of the large trading outfits in the US.

Mr Patidar said the company had been focusing more on exports for better margins and gradually reducing its dependence on outsourced motors.

For the financial year to June 30, 2005, Shakti had reported a net profit of Rs 1.58 crore against Rs 1.19 crore in 2003-04 on total sales of Rs 47.73 crore (Rs 47.48 crore).

In the domestic market, the company expects substantial orders from Gujarat, Madhya Pradesh and Andhra Pradesh this fiscal.

The promoters' holding is a little over 50 per cent in the company.

According to Mr Rajesh Agarwal of CD Equisearch, though valuation of the stock looks stretched, the growth trajectory it is seeking to achieve may increase revenue and earnings in the future.

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