Oswal Pumps Q1FY27: consolidated PAT down 43% YoY as margins compress well below guidance

Oswal Pumps' consolidated (primary basis) Q1 FY27 print: PAT ₹54.1 Cr (owners' share ₹53.8 Cr) on revenue ₹473.6 Cr, down 42.8% YoY and 41.5% QoQ — far steeper than the 7.9% YoY / 7.1% QoQ revenue decline. OPM compressed to ~15.7% from 27.4% a year ago and 23.3% last quarter; NPM fell to 11.2% from 18.4% YoY. Basic EPS was ₹4.86 versus ₹8.55 both YoY and QoQ. There were no exceptional items this quarter (Q4FY26 carried a one-off labour-code provision), so this compression sits entirely in core operations — a weak quarter on profitability even though the revenue dip itself was anticipated.

Cost of materials rose to 60.6% of revenue from 53.2% a year ago even as revenue fell, and employee costs (+16.9% YoY), depreciation (+49.9% YoY) and other expenses (+26.6% YoY) all grew against a shrinking topline — classic operating deleverage as new capacity funded by IPO proceeds (₹93.8 Cr utilised for the Karnal manufacturing expansion) is absorbed on a smaller revenue base. Finance costs fell to ₹8.4 Cr from ₹13.0 Cr YoY on debt repaid from IPO proceeds, a partial offset that wasn't enough to hold margins.

The stock went into the print at ₹326.1, down 20.5% over the past month of trading.

CFO resigned June 20, 2026, during the quarter — Walso Solar Solution became a consolidated subsidiary from June 8 after Oswal raised its stake to 51%, adding ₹25.5 Cr revenue / ₹0.2 Cr PAT for the stub period.

Against Street, Choice Broking had modelled PAT of ~₹70.6 Cr on revenue ₹478.7 Cr with OPM ~23.3% (BusinessToday, July 2, 2026); actual PAT of ₹54.1 Cr is roughly 23% below that, and OPM undershot by nearly 760bps — a clear miss. Against management's own FY27 guidance from the Q4FY26 concall (20-25% overall growth, H1 revenue dip expected from PM-KUSUM 2.0 timing, 22-23% EBITDA margin and 15-16% PAT margin bands for FY27), the topline decline is broadly on script, but both margin bands were missed this quarter (15.7% and 11.2% respectively) — revenue tracked the plan, profitability did not. Standalone (secondary, parent-only) tells a starker story: standalone PAT fell 70.7% YoY (₹21.7 Cr vs ₹74.0 Cr) on a 22.4% revenue decline (₹344.1 Cr vs ₹443.6 Cr), both far worse than the consolidated read — consistent with manufacturing and profit increasingly sitting at the subsidiary level (Oswal Solar Energy, the IPO-funded new-capacity entity, and the newly-consolidated Walso Solar Solution). The quarter also saw a CFO resignation (June 20) and a 63 MW rooftop solar win in Bihar (June 14), the latter tied to management's stated diversification into rooftop/C&I segments.