Oswal Pumps Limited issued a comprehensive response on Thursday addressing market report observations, stating that "some interpretations in a report circulating in the public domain do not fully reflect operating realities." The company provided detailed point-by-point clarifications regarding concerns about its cash flow position, receivables, and financial reporting practices.

Key Financial Performance Context

The company's financial metrics reflect the operational structure of government-led programmes, where timing mismatches between revenue recognition and cash collections are inherent to the business model:

Response to Cash Flow and Receivables Concerns

Oswal Pumps emphasized that negative operating cash flows and elevated receivables are largely attributable to its participation in government schemes, particularly the PM-KUSUM programme. The company explained that revenues are recognised upon execution and delivery, while cash collections are linked to subsidy disbursements from government authorities following prescribed verification and approval processes.

ERP System Upgrades and Audit Trail Improvements

Addressing observations about audit trail limitations, the company clarified these pertain to constraints in its older enterprise resource planning system. Oswal Pumps announced migration to a new ERP platform offering enhanced audit controls, improved traceability, and stronger internal reporting mechanisms as part of broader governance strengthening efforts.

Supply Chain Financing Classification

The company defended its classification of ₹1,336.96 million in supply chain financing under "Other Financial Liabilities," stating these are standard trade facilitation mechanisms appropriately classified according to applicable accounting practices. Management emphasized no misrepresentation of liabilities occurred, with disclosures accurately reflecting arrangement nature.

Related Party Transactions and IPO Proceeds

Oswal Pumps clarified its related party relationships, including its 38.50% equity stake in Walso Solar Solution Private Limited and non-material rent transactions with Singh Engcon Private Limited. The company raised approximately ₹8,900.00 million through its June 2025 IPO, improving net worth to over ₹12,300.00 million by September 2025, with cash and bank balances surging to over ₹4,400.00 million.

Management's Operational Reality Assessment

The company maintained that while headline numbers may appear volatile due to government-led execution cycles, they do not reflect stress in the core business. Management emphasized focus on improving systems, strengthening controls, and ensuring greater stakeholder clarity while scaling operations within the framework of government-backed programmes where extended payment cycles are inherent characteristics.

Oswal Pumps Limited has received a Letter of Empanelment from Maharashtra State Electricity Distribution Company Limited for an additional 6,500 off-grid DC solar photovoltaic water pumping systems worth approximately ₹180.00 crores. The company disclosed this significant order award on December 24, 2025, under Regulation 30 of SEBI listing obligations.

Project Specifications and Scope

The comprehensive project involves the design, manufacture, supply, transport, installation, testing and commissioning of off-grid DC solar photovoltaic water pumping systems across Maharashtra districts. The systems include multiple capacity variants to meet diverse agricultural requirements.

Implementation Timeline and Framework

The project operates under the PM KUSUM B Scheme - Magel Tyala Saur Krishi Pump Yojana, a government initiative promoting solar-powered agricultural equipment. The Letter of Empanelment remains valid for one year, with specific installation timelines for individual systems.

Technical Features and Services

The solar water pumping systems are designed for off-grid operation, providing sustainable irrigation solutions for farmers without dependence on conventional electricity. The project includes comprehensive after-sales support with repair and maintenance services along with remote monitoring systems for optimal performance tracking.

Strategic Business Impact

This order represents a significant business development for Oswal Pumps Limited, reinforcing its position in Maharashtra's renewable energy infrastructure. The project aligns with the state's commitment to sustainable agricultural practices and demonstrates the company's capability to execute large-scale solar pump installations efficiently.