Shares of Shakti Pumps gain 40% in just four days. What is fueling the rally?

Shares of Shakti Pumps (India) continued their strong momentum on Tuesday, rising 4.26% to Rs 785, marking their fourth straight day of gains. Over the past four trading sessions, the stock has risen more than 40%, fueled by a string of big order wins.

The stock’s rally comes after a number of notable order announcements in December:

December 11: Shakti Pumps has received a Letter of Empanelment from Maharashtra State Electricity Distribution Company Limited (MSEDCL) to supply 16,025 Off-Grid DC Solar Photovoltaic Water Pumping Systems (SPWPS) of 3 HP, 5 HP and 7.5 HP under the Magel Tyala Saur Krushi Pump Yojana/PM-KUSUM B Scheme. The total value of the order is approximately Rs 443.78 crore (including GST), which is to be executed within 60 days.December 12: 1) The company has secured its second order from Jharkhand. The Jharkhand Renewable Energy Development Agency has awarded Shakti Pumps a contract for 1,200 Solar Water Pumping Systems (SWPS) under Component B of the PM-KUSUM programme. The order value stands at Rs 23.98 crore (including GST), with an execution timeline of 120 days.

2) Shakti Pumps (India) Limited has received a work order from Madhya Pradesh Urja Vikas Nigam Limited for 2,033 standalone Off-Grid DC Solar Photovoltaic Water Pumping Systems (SPWPS) pumps for the entire state of Madhya Pradesh under Component-B of the PM-KUSUM programme. The total value of the 2,033 pumps is approximately Rs. 71.25 Crores (including GST), to be executed within 120 days.

These orders, spread across multiple states, underline Shakti Pumps’ strong presence in the renewable energy segment, especially in solar irrigation solutions.

The market responded positively to the strong inflow of orders, causing the stock to rise despite continued buying interest.

Technical view

On the technical front, Shakti Pumps’ 14-day Relative Strength Index (RSI) stands at 62.2. In general, an RSI below 30 indicates a stock is oversold, indicating a potential buying opportunity, while an RSI above 70 indicates a stock is overbought, indicating the stock may be due for a pullback.

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