- Solar Industries shares hit a 52-week high amid defence order optimism
- Stock rose 2.86% to Rs 18,989.85 on BSE, outperforming Sensex by 50% in six months
- DRDO's successful Pinaka rocket test boosted investor confidence and growth outlook
Explosives company Solar Industries shares extended their winning run on Monday, hitting a fresh 52-week high amid growing optimism over the company's defence order pipeline, recent developments in the Pinaka rocket programme, and expectations of a strong June-quarter performance.
The stock climbed as much as 2.86% to a fresh 52-week high of Rs 18,989.85 apiece on the BSE. At 10:42 am, the stock was trading 2.13% higher at Rs 18,853.45. In comparison, the BSE Sensex was down 0.61% at 77,674.
The rally has been strong over the past six months, with Solar Industries gaining 50%, considerably outperforming the benchmark BSE Sensex, which has declined 5% during the same period.
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Defence Programmes Lift Growth Outlook
Investor sentiment received a boost after the Defence Research and Development Organisation (DRDO) successfully tested the Pinaka Long Range Guided Rocket (LRGR) at the Integrated Test Range in Chandipur. The test achieved a precise strike on the designated target and validated the rocket's compatibility with the Indian Army's existing Pinaka launcher systems.
Following the successful trial, Goldman Sachs said the development strengthens the long-term opportunity for Solar Industries. The brokerage estimates the extended-range and guided Pinaka programme could create an additional Rs 4,500 crore revenue opportunity for the company, complementing its existing Rs 6,080 crore order book linked to the Pinaka system. It also expects lower costs to support wider deployment across India's air-defence network.
Another potential growth driver is Project Kusha, India's indigenous long-range air-defence missile programme. Goldman Sachs noted that DRDO has issued a request for proposal (RFP) for test canisters, indicating the programme is progressing from the design phase towards physical testing and validation.
Solar Industries is the development-cum-production partner for Project Kusha, alongside Bharat Dynamics and Bharat Electronics. The brokerage believes the company stands to benefit from future orders as the programme moves closer to its expected induction between 2028 and 2030.
Goldman Sachs maintains a 'Buy' rating on Solar Industries with a target price of Rs 19,590. The brokerage expects the company's Q1FY27 results to be the next key trigger and forecasts 69% year-on-year (YoY) EPS growth, the highest among the large-cap defence companies under its coverage.
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