Synopsis: The shares of a defence company specializing in the manufacturing of industrial explosives, initiating systems, and defence products have gained attention due to its global presence and diversified offerings across sectors, and a massive orderbook pipeline. In this article, we will explore whether Solar Industries’ order book is powered more by Defence or Mining Explosives.
With a market capitalization of Rs. 1,20,981.13 Crores on Tuesday, the shares of the company jumped upto 0.1 percent, reaching a high of Rs. 13393.00 compared to its previous close of Rs. 13379.25.
Solar Industries at Glance
Solar Industries India Limited is a leading global manufacturer specialising in commercial explosives, blasting solutions, and ammunition for both industrial and defence applications. Incorporated in 1995 and based in Nagpur, Maharashtra, the company has evolved from developing explosive devices for the Indian market to delivering cutting-edge products for industries such as mining, construction, seismic exploration, tunnelling, and hydro projects
The company operates two main verticals: industrial and thermal. The industrial segment features products like SuperPower 90, Solargel, and EcoPower, which are widely used in mining and construction.
The thermal division is oriented toward military and defence solutions, producing items such as drones (UAS), ammunition, military explosives, rockets, missiles, and warheads. Solar Industries holds the distinction of being India’s first private supplier of advanced explosives like HMX and RDX to the defence sector, supporting major projects including Pinaka and BrahMos.
Solar Industries India has 27 manufacturing plants in India spread over Maharashtra, Rajasthan, Tamil Nadu, Jharkhand, and West Bengal. Additionally, it has 9 international plants in countries like Nigeria, Turkey, Thailand, and Australia, and its products can be found in more than 90 countries all over the world.
Revenue Mix (Customer-wise)
In Q2FY26, Solar’s total revenue stood at Rs. 2,082 Cr, reflecting a strong 21% year-on-year growth compared to Rs. 1,716 Cr in Q2FY25. The largest contributor continued to be the International segment, which grew from Rs. 799 Cr in Q2FY25 to Rs. 963 Cr in Q2FY26, registering a 21% YoY rise.
Defence showed the sharpest increase from Rs. 322 Cr in Q2FY25 to Rs. 506 Cr in Q2FY26, delivering a 57% growth. The Housing & Infra segment declined from Rs. 191 Cr in Q2FY25 to Rs. 171 Cr in Q2FY26.
The Non-CIL & Institutional segment improved steadily from Rs. 224 Cr in Q2FY25 to Rs. 271 Cr in Q2FY26, a 21% growth, while CIL witnessed a slight decline from Rs. 169 Cr in Q2FY25 to Rs. 156 Cr in Q2FY26, falling by 8%. The Others category increased modestly from Rs. 11 Cr to Rs. 15 Cr, reflecting 36% growth but with a very small overall contribution.
Overall, Q2FY26 performance was driven by strong growth in the International and Defence segments, which together contributed more to the revenues, compensating for the weakness in CIL and the relative slowdown in Housing & Infra.
Order Book Status
The order book status of Solar Industries, which stands at over Rs. 17,100 crore, is clearly powered more by Defence rather than Mining Explosives. Out of the total, Defence contributes over Rs. 15,500 crores, accounting for nearly 90 percent of the order book, while CIL & SCCL together contribute over Rs. 1,600 crore, or about 10 percent.
The company’s defence order book stands at Rs. 15,500 crores, with nearly Rs. 8,000 crores coming from international markets. Management expects additional orders due to global shortages of ammunition and energetic materials, which could further drive demand.
The Commercial sales of the Pinaka multi-barrel rocket system are set to begin in Q3, with initial ramp-up challenges being addressed. The company has already participated in guided Pinaka rocket projects and expects to secure commercial orders within the next one or two quarters. These developments are anticipated to further boost revenue in the coming periods.
Along with it, Trial production of 155mm artillery shells has begun, with supplies set to start for technical qualification. Commercial production is expected to commence in Q4. The company’s strategy is to develop a complete round of 155mm shells, and they are actively working toward that goal.
Expansion Plans
In Q2, the company posted record international revenue of Rs. 960 crores, a 21% YoY increase. This growth was driven by successful turnarounds in regions like South Africa and strong performances in Turkey, Ghana, Nigeria, and Tanzania. The company is also expanding into new markets, including Australia, Kazakhstan, and Saudi Arabia, with operations expected to start within the next 6 to 12 months.
Capex
In H1 FY26, the company spent Rs. 760 crores on capex, lower than the original guidance of Rs. 2,500 crores for the year, mainly due to challenges from heavy monsoons. The final capex figure for FY26 will be shared at year-end.
Looking long-term, the company has signed an MoU with the Maharashtra government for a Rs. 12,700 crores capex commitment over the next 10 years, which includes defence-related investments.
Revenue Outlook
The company remains optimistic about reaching its FY26 revenue target and believes the top line could surpass Rs. 10,000 crores. Management is confident in achieving its FY26 guidance, maintaining a positive outlook for the year.
Financials & Others
The company’s revenue rose by 21.35 percent from Rs. 1,716 crore to Rs. 2,082 crore in Q2FY25-26. Meanwhile, the Net profit rose from Rs. 304 crore to Rs. 361 crore during the same period.
The company has demonstrated strong financial performance with a 36.2% compound annual growth rate (CAGR) in profits over the past five years. Its Return on Capital Employed (ROCE) stands at 38.1%, indicating efficient use of capital to generate returns, while its Return on Equity (ROE) is 32.6% over the last three years, reflecting solid profitability for shareholders.
Additionally, the company maintains a low debt-to-equity ratio of 0.17, showing effective debt management and a reduced reliance on borrowed funds. This combination of high profitability, strong returns, and prudent debt reduction positions the company for continued growth and stability.
Written by Sridhar J
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