PL Capital believes Solar Industries is well placed to deliver multi-year growth, supported by, its ~26% market share in domestic industrial explosives, underpinned by an integrated manufacturing footprint and long-standing customer relationships; strong growth in defence revenue driven by increasing traction across ammunition, loitering munitions and missile systems.
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PL Capital Report
Shares of Solar Industries India Ltd. may remain in focus as domestic brokerage firm PL Capital initiate coverage with ‘BUY' rating, setting a target price of Rs 23,124, valuing the stock at price-to-earnings of 62 times Sep'28E, implied EV/EBITDA of 34x Sep'28E.
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The target price implies a potential upside of 17% from the reports current market price of Rs 19,730.
The brokerage believes Solar Industries is well placed to deliver multi-year growth, supported by-
- its ~26% market share in domestic industrial explosives, underpinned by an integrated manufacturing footprint and long-standing customer relationships;
- strong growth in defence revenue driven by increasing traction across ammunition, loitering munitions and missile systems;
- expansion into overseas markets (across 10 countries), providing a meaningful avenue for diversification and scale;
- leap in its technological capabilities with the development of full spectrum of drone systems (Nagastra, HALE/MALE UAVs, Rudrastra, Bhargavastra); and
- improvement in profitability through scale and operating leverage.
PL Capital estimates revenue/adjusted profit aftera tax compound annual growth rate of ~28%/~30% over FY26–29E, driven by fastest-growing defence business, scale-up in international explosives, and favorable revenue mix.
The stock is currently trading at 58.7x/48.2x P/E on FY28/FY29E.
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