Agri Pump Makers To See 7-9 pc Revenue Growth FY25: Report

Demand for conventional and solar pumps will help agricultural pump makers see 7-9 per cent revenue growth in 2024-25, a report said on Wednesday.

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 per cent in fiscal 2025.

This will follow a likely revenue growth of 8-10 per cent in the current fiscal, it added.

"Factoring normal monsoon in FY25, revenue growth for the industry will largely be volume driven. While conventional pumps may see stable growth at 6-8 per cent, solar pump volumes will grow at a faster clip of 20 per cent year-on-year, supported by 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 per cent 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 the 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 per cent of solar pump cost.

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 next fiscal, it stated.

Steady growth in volumes of conventional pumps coupled with price of its key raw materials - pig iron, steel and copper (forming 70-75 per cent of total cost) remaining range bound will keep operating profitability healthy at 12-13 per cent this fiscal, it added.