Shares of Shakti Pumps (India) (SPIL) hit a 52-week low amid growth concerns due to rising raw material costs and losses on account of forgery.
The company’s accountant Raghav Rajput manipulated the accounts of the company and transferred crores in his personal account and played online gambling and lost all the amount.Police has observed manipulation in the accounts of the company by it’s accountant Raghav Rajput. As per media reports, He stole the money from the Shakti Pumps company account. Pithampur police have arrested the accused and produced him in the judicial court and the court sent him to jail.
The company’s dependence on steel, copper and aluminium and others accounted for about 76 per cent of the 9MFY22 (April-December) revenues (FY21: 71 per cent). With Russia Ukraine crisis and rising commodity prices, an adverse impact on the margins is a concern. The company is in a highly competitive market and other players like Kirloskar Brothers, KSB Pumps and local small manufacturers are aggressively marketing their range too. In this scenario, majority of cost escalation cannot be passed through due to the fixed-price nature of contracts.
The company also does not have any hedging contracts on MCX, NCDEX or other global exchanges in place. It relies on natural hedge, the rating agency India Ratings & Research (Ind-Ra) in rating rationale on February 4, 2022.
Shakti Pumps CMD was quoted saying that a big player like Shakti Pumps is not able to expand to remote states. The government needs to rework the pricing policy of solar-powered irrigation pumps for wider implementation of the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM). The solution to this problem is to either bid at commercial rate or give a specific quantity for Micro, Small & Medium Enterprises (MSMEs). However, industry experts say that this is a tall ask and will take time.
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