Solar Industries Bags Rs 994 Crore Defence Order – Share Surge As Company Aims To Recover From Last Year’s Setbacks

Ajit Kushwaha

Solar Industries Limited, one of India’s biggest companies that makes industrial explosives, said on Monday, January 8, 2024, that it had received export orders worth Rs 994 crore from a customer outside of India for goods that will be used in defense. Over the next three years, the packages will be sent out.

Solar Industries Continues Its Upward Trajectory After Facing Challenges in 2023

The new defense order is good news for Solar Industries, which is trying to get back on track after some hiccups last year.

In October 2023, there was an explosion at the company’s Nagpur plant where explosives were made, killing 9 and hurting 7. People were worried about whether the safety rules were being followed after the terrible event.

But Solar Industries quickly took steps to fix the problem. To stop this from happening again, the company put in place new safety rules and upgraded its tools.

These steps seem to have calmed down shareholders, as Solar Industries’ stock has mostly returned from the 20% drop that happened after the explosion.

Solar Aims To Leverage Its Expertise Gained Over 3 Decades In Operation

The new order for 2024 gives Solar Industries a chance to use the skills it has built up over more than 25 years of business.

When businessman Satyanarayan Nuwal started Solar Industries in 1995, it was just a selling company that sold industrial explosives. It quickly changed its focus to manufacturing and became one of the biggest suppliers to India’s coal mining business.

Solar Industries is well-positioned to take advantage of the growing defense industry thanks to the many years of experience they have gained in the specialized weapons field.

Defense sales are only going to go up since the Indian government is speeding up the modernization and buying of military equipment in India. Solar’s new order to send goods abroad could be the start of bigger things.

Solar Industries Share Surges On Positive Growth Outlook

Solar Industries’ stock price went up by almost 1% to Rs 6,770 per share around 1:45 pm on Monday, January 8th, after the company got good news about a defense order. The stock fell 2% on Friday, which was one of the few times it ever went down.

On the other hand, Solar Industries stock has gone up three of the last five business days. This upward trend fits with a more optimistic view of the business’s growth chances. Along with the defense order, Solar Industries is also making its position as the market leader in coal mine explosives even stronger.

Coal India Limited, which is owned by the government, gave the company its biggest order ever in October 2022. It was worth Rs 1,853 crore. The two-year deal gives Solar a clear picture of its earnings while it expands into new, highly profitable areas.

Solar Industries stock may keep going up because it has a long way to go in terms of growth. The company has been steadily getting better after a setback last year, and it is also making progress in new areas, which makes it an appealing option.

Outlook: Solar Industries Well-Primed To Tap into India’s Defence Manufacturing Boom

This is a good time for Solar Industries to get their latest overseas order. Under the “Make in India” initiative, India wants to increase the production of defense goods in the country.

Companies like Solar that have experience in this area are in a good situation to help with this. India’s defense industry could be worth $70 billion by 2030, according to projections.

For Solar Industries, this demand can be met well by their specialized explosives production skills. The company is already getting ready to take advantage of the defense boom. With its most recent order for 2024, Solar has shown that it can also meet standards for exporting to other countries.

As the buying of defense equipment speeds up, Solar Industries looks ready to take advantage of chances both at home and abroad. By properly completing the defense orders it already has, Solar can show that it can do more of these kinds of jobs.

Solar Industries stock may keep going up until 2024 because it has a strong long-term growth path. The company is in a good position to give value to investors thanks to its steady recovery, new orders, and refocused focus on defense.

Solar wants to sell explosives to more than just the coal and mining industries. The fact that it has many ways to make money is a good sign.

Solar Industries India Financials

Income History of Last 4 Years

PeriodMar 2023Mar 2022Mar 2021Mar 2020
Total Revenue6,922.533,947.612,515.632,237.30
Selling/ General/ Admin Expenses Total1,018.17722.01518.80478.13
Depreciation/ Amortization128.26109.3193.6985.09
Other Operating Expenses Total62.2552.7150.5346.21
Total Operating Expense5,681.373,262.312,091.791,887.24
Operating Income1,241.16685.30423.84350.06
Net Income Before Taxes1,101.58607.42397.10335.80
Net Income757.19441.28276.35267.43
Diluted Normalized EPS90.9648.1033.4231.16
Data Source: Livemint | *All figures in crores except per share values

Balance Sheet History of Last 4 Years

PeriodMar 2023Mar 2022Mar 2021Mar 2020
Total Assets5,036.253,724.303,029.712,532.32
Total Liabilities2,425.911,810.021,450.301,152.23
Total Equity2,610.341,914.281,579.411,380.09
Tangible Book Valueper Share Common Eq281.68204.91168.29146.22
Data Source: Livemint | *All figures in crores except per share values

Cashflow History of Last 4 Years

PeriodMar 2023Mar 2022Mar 2021Mar 2020
Cashfrom Operating Activities632.84297.80356.68324.81
Cashfrom Investing Activities-518.98-303.05-250.74-214.30
Cashfrom Financing Activities118.16-45.40-26.07-31.56
Net Changein Cash160.37-85.2677.3731.56
Data Source: Livemint | *All figures in crores except per share values
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By Ajit Kushwaha Writer
Ajit Kushwaha is a stock market investor and business owner of a chips manufacturing company in Hazaribagh, Jharkhand. He holds a Bsc. from Vinobha Bhave University and leverages over 5 years of share market experience in managing investments and his snack food business.
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