Solar Industries : The global industrial explosives industry anticipates annual growth, projecting a value surpassing US$ 16 billion by 2028. According to Mint, the Indian explosive industry is growing rapidly with annual usage at 500,000 tonnes, and is expected to reach $159.2 million by 2028.

The explosive industry’s robust growth can be attributed to a significant surge in demand, particularly driven by the mining, construction, and infrastructure sectors. Explosives play a pivotal role in these industries, becoming indispensable for various developmental projects. 

Furthermore, the sector’s expansion into defense and space missions has further fueled its upward trajectory. The increasing reliance on explosive technologies in these critical sectors contributes substantially to the overall growth of the industry. With the growing prospects in explosives manufacturing, let’s zoom in on one particular company in the field—Solar Industries India Ltd.

Solar Industries is a leading manufacturer of bulk explosives, packaged explosives, and initiating systems and its current total order book as of Q3 of FY24 stands at Rs. 4,802 crore. The company’s stock gave a stellar return of 200% in the last two years. Let’s understand more about the business of Solar Industries.

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Solar Industries India Ltd.

Business Overview

Founded in 1995, Solar Industries India Limited has evolved from a local manufacturing player to a global player in the industrial explosives sector. They have established one of the world’s most integrated facilities for ammunition. The company is the first Indian company to surpass an annual production of 300,000 metric tons of explosives.

In the fiscal year 2009-10, Solar Industries India Limited expanded its operations into the defense sector. The company diversified its manufacturing capabilities to include high-energy explosives, delivery systems, ammunition filling, and pyros fuses within the defense industry. Additionally, Solar Industries India Limited has extended its manufacturing presence to international locations, including Nigeria, Zambia, Ghana, South Africa, Turkey, Tanzania, and Indonesia.

The company’s customer base includes big companies like Coal India Limited, Vedanta Group, Tata Group, Steel Authority of India Larsen & Toubro (L&T), GMR Infrastructure, Reliance Infrastructure, Adani Group, National Highways Authority of India (NHAI), etc
The company’s total export turnover was Rs 2,561 crore in FY23, a 114% increase from Rs 1,197 crore in FY22. Let’s have a look at the products the company sells and their performance in FY2

Product wise performance

The Company is engaged in the manufacturing of a complete range of industrial explosives, explosive initiating devices, and high-energy materials for defense applications. Let’s get a brief on their core products

Industrial Explosives

Solar Industries is among the largest manufacturers of industrial explosives in India with over 4 decades of expertise in the domain. Industrial explosives comprise detonators, cast boosters, and bulk explosives used in mining and infrastructure projects.

With over 6 manufacturing units equipped with advanced automated technology, Solar is a widely recognized name among public and private mining companies in the country.

Explosives-Initiating Devices

Solar Industries specializes in explosives-initiating devices used to trigger detonation sequences like electronic/non-electric detonators, and delays which find wide application across industries.

With a strong R&D focus, Solar has introduced several patented products like Smart Shot PlusTM non-electric trunkline delay detonators offering programmable and weather-resistant delays for enhanced blasting efficiency. Its extensive range caters to requirements across mining, road construction, hydroelectric projects, and seismic exploration activities.

Defense Products

In light of India’s rising defense capabilities, Solar Industries has forayed into manufacturing specialized products for the defense sector including aerial bombs, hand grenades, warheads, torpedoes, and explosive cartridges. The company has recently partnered with DRDO to produce Pinaka multi-barrel rocket launchers

ProductsFY23FY22
Explosives78%76%
Initiating Systems13.00%15.00%
Defense9.00%9.00%

Explosives is Solar’s largest product line contributing 75-80% of total revenues. This segment has seen a slight expansion in share from 76% to 78% between FY22 and FY23. Initiating Systems which would comprise items enabling detonation sequence has declined from 15% revenue share in FY22 to 13% in FY23. Defense products revenue contribution has remained stable at 9% over this period. Let’s look at the financials of the company:

Solar Industries – Financials

FY2023FY2022FY2021FY2020
Revenue (₹ Crore)6,9233,9482,5162,237
Net Profit (₹ Crore)811455288279
ROE25.1919.1516.3420.89
ROCE35%25%19%19%


Solar Industries has witnessed vigorous revenue growth in each of the past 3 years, with an increase from INR 2,237 crore in FY20 to over INR 6,900 crore in FY23 indicating substantial expansion across its explosives and defense products. Solar Industries has performed excellently over the last 4 years reflected by a 3x Revenue growth and 2x Profit growth

Net Profit has also witnessed consistent growth during this period, more than doubling from INR 279 crore in FY20 to over INR 811 crore in FY23 showing strong margin performance. Return of Capital Employed (ROCE) has also increased markedly from 19% in FY20 to 35% in FY23 highlighting efficient capital utilization to drive profitability.

Key growth drivers of the company

Market Dominance

Solar Industries India Limited holds a robust market share of approximately 24% in the explosives industry, establishing itself as one of the largest manufacturers and exporters of explosives and initiating systems in India.

Strong Order Book

The company’s order book, which indicates revenue visibility, is strong at Rs. 4,802 crore as of December, 2023. This includes orders from Coal India Limited (CIL) and Singareni Collieries Company Limited (SCCL), and Defence.

World-Class Manufacturing

The company’s manufacturing unit in Nagpur stands out as the world’s largest single-location cartridge plant. This state-of-the-art facility positions Solar Industries as a key player with the capability to produce a complete range of products and develop customized solutions.

Raw Material Integration

Solar Industries maintains a strategic advantage by internally manufacturing the majority of its raw materials, excluding ammonium nitrate. This approach results in cost savings, ensures quality control, and contributes to a stable operating margin ranging between 18-21% over the past five fiscal years through 2023.

Proximity to Mining Regions

The bulk explosive manufacturing units are strategically located within a 50-60-kilometer radius of major mining regions. This proximity enhances operational efficiency and allows the company to pass on any fluctuations in raw material prices to customers through a price escalation clause in contracts.

Future outlook

Solar Industries aims to expand globally by growing its presence in new overseas markets which will substantially contribute to overall international revenue.  The company plans to undertake innovative projects like high-mobility rocket systems and counter-drone technologies to drive growth. It has also invested strategically in space and UAV startups Skyroot and ZMotion.

Leveraging from recent technology transfers for specialized defense products like Pinaka rockets and BrahMos propellants, Solar expects sustainable order flows over coming years from lead defense players. Enlarging its product portfolio has made Solar the preferred supplier across several key categories.

Strict product approval processes, timely delivery, and confidentiality along with repeated trial testing during development make the company reliable for clients.  Solar is also setting up new units in Australia, Thailand, and Indonesia to boost manufacturing capacities. Partnerships with organizations like the Indian Space Research Organisation for space launch vehicles strengthen Solar’s long-term prospects. 

Overall, the focus is on expanding the defense product range to widen addressable business opportunities.
In summary, Solar Industries aims to drive further growth through increased global expansion, new-age defense partnerships, enhancing product bouquet, and boosting client trust by meeting stringent approval and delivery standards.

With this, we come to the end of this article. Hope you enjoyed reading it and found it insightful. Tell us your thoughts in the comment section below!

Written by Akshita Maloo

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