Solar Industries Q1 Results Review - Volatility Bottoming Out; Pinaka Order Awaited: ICICI Securities

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ICICI Securities Report

Solar Industries India Ltd.’s Q1 FY24 Ebitda was up 14% YoY (down 9.6% QoQ) at Rs 3.2 billion. Key points:

Explosives segment realisation declined, tracking ammonium nitrate prices;
explosives volume was up 12.6% YoY, lower than the guidance of 15-20% mainly due to impact of unseasonal rains on housing and infra segment;
defence revenue rose 148% YoY to a record Rs 1.5 billion; and
despite hyperinflation and forex related provisions of Rs 40 million, Ebitda margin was at 19.2%, slightly lower than the guidance of 20-22%.

Going ahead, management expects volatility in commodity prices to have bottomed out, volume growth in H2 FY24 and sustained traction in defence business.

We maintain 'Buy' on Solar Industries at an unchanged target price of Rs 4,700 on 40 times FY25E earnings per share.

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ICICI Securities Solar Indutries Q1FY24 Results Review.pdf

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