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Informist, Thursday, Feb. 6, 2025

By Alina Geogy

MUMBAI – Solar Industries Ltd. expects sales volume to grow 8-10% in 2024-25 (Apr-Mar) as against 15% anticipated earlier, the company's management said in a conference call following the announcement of earnings for the December quarter Thursday. Domestic demand has been subdued so far this financial year due to the general and state elections in many parts of the country, which was aggravated by the heavy monsoon season this year as it led to subdued demand in the mining sector, the management said.

Shares of the explosives manufacturer fell as much as 6.5% to a one-week low of INR 9,025 after the conference call concluded. The stock had been trading slightly higher earlier in the day, but turned negative later and traded down over 4% at INR 9,230.95 at 1320 IST. Despite the cut in volume guidance for the ongoing financial year, the company said its growth trajectory for the long-term remains robust, driven by strategic diversification.

The management of Solar Industries said it is confident of achieving its defence sales guidance of INR 15 billion for FY25. So far this year, the company has achieved INR 9 billion, or 60%, of the FY25 defence sales guidance, it said.

Solar Industries expects to maintain its margin levels considering factors such as better realisations of facilities in the international market and upcoming new facilities in the domestic market. The company aims to maintain earnings before interest, taxes, depreciation and amortisation margin of over 20% in the defence segment in the coming two years.

"We have received lots of orders from the international markets...but as far as the orders from the Indian defence market are concerned, we were ready for the Pinaka orders to come in, which is the biggest order in the history of CCS (Cabinet Committee on Security)," the company's management said. Solar Industries should be able to sign the deal for procurement of the Pinaka rocket launchers with the Cabinet Committee on Security at any moment, the company said. As of now, the total order book for the defence segment is INR 49.71 billion and once the order for Pinaka comes in, it will be around INR 60 billion, the company said. Then, the total order book would be over INR 110 billion, it said.

The nod from the Cabinet Committee on Security for a procurement deal with Solar Industries to supply Pinaka enhanced rockets and area denial rockets to the armed forces will drive revenue growth, open new possibilities, and further establish the company's prominence in the Indian defence sector, the management said.

Last week, the Cabinet Committee on Security cleared the purchase of ammunition worth over INR 100 billion for the Indian Army's multi-barrel rocket launcher systems, news agency ANI reported, quoting defence sources. The purchase, including Pinaka-enhanced range rockets and area denial munitions, would be divided between Solar Industries and Munitions India, as per the ANI report.

For the quarter ended December, the company posted a 55% on-year growth in consolidated net profit to INR 3.15 billion on consolidated revenue of INR 19.73 billion, which rose 38%. The company reported its highest-ever income from the defence vertical at INR 4.09 billion, up from INR 610 million a year ago. The international business of Solar Industries grew 21% on year to INR 7.58 billion in Oct-Dec.  End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Ashish Shirke

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