Shares of Oswal Pumps rose by 4 per cent before setling with 2 per cent gains on Wednesday after brokerage firm Nuvama initiated coverage on the stock with buy rating, citing strong growth prospects from India’s accelerating solarisation of agriculture and the company’s integrated manufacturing capabilities.
The stock closed 2 per cent higher at 514.45 on the BSE, hitting a high of ₹525 following a flat opening at ₹505.25.
Nuvama Institutional Equities assigned a buy call on the stock at a target price of ₹720, implying an upside of 40 per cent . The brokerage highlighted Oswal Pumps is well placed to benefit from the growing adoption of solar energy in agriculture, supported by government schemes and improving farmer economics.
Nuvama expects the company to deliver a healthy revenue, EBITDA and profit after tax CAGR of 21 per cent, 13 per cent and 11 per cent, respectively, over FY26–FY28. This growth outlook is underpinned by a high base performance in FY24–FY26 and a conservative assumption of a modest delay in the PM-KUSUM 2.0 scheme.
According to Nuvama, the solar pumps industry has emerged as a new growth avenue within Indian farming. The pumps industry, valued at ₹38,100 crore, has compounded at 17 per cent over FY19–25 and shall report a 9 per cent CAGR over FY25–30E, largely led by agriculture pumps (67 per cent of total pumps in FY25 versus 48 per cent in FY19), it said.
Solar pumps systems — largely used as agriculture pumps — were valued at ₹16,500 crore in FY25 and are likely to post an 11 per cent CAGR over FY25–30E (114 per cent over FY19–25). OPL — one of the largest players in solar pumps — shall be a significant beneficiary of this enticing opportunity.
The brokerage also pointed out that the PM-KUSUM scheme, despite facing some execution-related bumps, continues to be a long-term growth driver. Industry estimates suggest India has over 144 million farmers, of which only about 30 million currently use installed solar pumps, indicating a large untapped opportunity.
Nuvama added that even without subsidies, solar pumps are increasingly viable due to cost economics, while off-grid solarisation under PM-KUSUM Component B has been a notable success.
The brokerage further highlighted Oswal Pumps’ strong integration capabilities, with in-house manufacturing of several components, including solar modules that form a significant portion of the bill of materials. This integration allows better cost control and flexibility across government, domestic and international markets. The brokerage also noted the company’s ability to participate in rooftop solar projects and exports, adding to its growth levers.
While maintaining a positive stance, Nuvama flagged potential risks, budget a modest delay in PM-KUSUM 2.0 scheme, on a conservative basis, amid high competitive intensity. Nonetheless, it believes Oswal Pumps’ execution track record and attractive valuation make it well positioned to capitalise on India’s solar-led transformation of agriculture.