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ICICI Securities Report
Solar Industries India Ltd.'s stock has been running sideways due to the delay in the award of the Pinaka order. However, we believe, Street is underestimating the potential of continuous export order inflows in defence. With an order inflows of Rs 45 billion so far in CY24, for a three–five-year duration, we believe these orders alone potentially form an annual revenue accretion of Rs 11–13 billion.
Besides, incremental earnings from domestic orders, including Pinaka, are likely to sustain defence revenues at Rs 18– 25 billion on an average and keep margins elevated over the next four years.
At this stage, our FY26E EPS is 10% higher than consensus and we believe that upward revisions are likely. Maintain Buy on Solar Industries; unchanged target price of Rs 13,250.
Key risks
Delay in awarding of Pinaka order.
Further fall in ammonium nitrate price leading to negative price-cost spread.
Slow traction in construction and infrastructure segments.
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