Oswal Pumps Q2 FY27 profit falls 60% as margins shrink

Oswal Pumps reported a sharp decline in profitability for the second quarter of fiscal 2027. Consolidated net profit fell 60.3% year-on-year to Rs 38.16 crore, while profit before tax dropped 62.5% to Rs 47.39 crore.

The company’s consolidated revenue slipped 6.2% year-on-year to Rs 506.30 crore.

Margin compression

Oswal Pumps’ cost of materials consumed jumped to Rs 394.49 crore in Q2 FY27, up from Rs 304.87 crore in the same quarter last year.

Metric	Q2 FY27	Q2 FY26
Total Expenses	Rs 464.37 crore	Rs 420.06 crore
Cost of Materials	Rs 394.49 crore	Rs 304.87 crore
Purchases of Stock-in-Trade	Rs 62.65 crore	Rs 39.91 crore
PBT Margin	~9.4%	23.4%
EBITDA Margin	~12.4%	~25%

Cash flow and liquidity

Operating cash flow deteriorated sharply in the first half of fiscal 2027, turning to a negative Rs 275.42 crore compared to a negative Rs 92.49 crore in the same period last year. This outflow was driven primarily by working capital requirements, with trade and other receivables absorbing Rs 277.97 crore and inventory increasing by Rs 130.69 crore. These factors drained liquidity even as the company recorded a profit for the period of Rs 92.30 crore, down approximately 52% year-on-year.

The strain on liquidity is visible in the balance sheet position at the end of September. Cash and cash equivalents fell to Rs 4.94 crore, a steep decline from Rs 90.70 crore previously. However, the company maintained a buffer of Rs 287.85 crore in bank balances at the same time.

Balance sheet shifts

The balance sheet of Oswal Pumps saw substantial growth during the first half of fiscal 2027. By the end of September, consolidated inventory had climbed to Rs 376.08 crore, a significant increase from Rs 221.08 crore recorded at the end of March 2026. Over this same timeframe, receivables swelled to Rs 1,319.48 crore, up from Rs 1,128 crore. Consolidated borrowings also surged, reaching approximately Rs 535.92 crore compared to Rs 225.34 crore at the close of FY26.

Capital work-in-progress expanded from Rs 43.56 crore at the end of March to Rs 112.97 crore. These financial changes coincided with a 6.9% sequential jump in revenue, which hit Rs 506.30 crore in Q2 FY27, up from Rs 473.56 crore in Q1 FY27. It remains ambiguous whether the current margin compression is a temporary blip or a sustained trend.

Solar expansion context

• On 8 June 2026, Walso Solar Solution transitioned into a wholly owned subsidiary.
• In an announcement dated 14 October, Luminity disclosed that Oswal Pumps intends to build a 1.2 GW TOPCon solar cell manufacturing plant through its subsidiary, Oswal Solar Energy Pvt Ltd (earlier report).
• The project’s financing structure comprises Rs 296 crore in debt alongside Rs 159.85 crore drawn from unutilised IPO proceeds.
• This facility is engineered to satisfy roughly 75% of Oswal Solar Energy Pvt Ltd’s aggregate cell demand.

Net profit for Q2 FY27 declined by 29.3% relative to the Rs 53.96 crore recorded in the preceding quarter.