Buy Solar Industries India; target of Rs 23,124: Prabhudas Lilladher

As per the latest business developments, Prabhudas Lilladher's research report on Solar Industries India

We initiate coverage on Solar Industries India Ltd (SOIL) with ‘BUY’ rating at TP of INR23,124, valuing the stock at PE of 62x Sep’28E (implied EV/EBITDA of 34x Sep’28E). We believe SOIL is well placed to deliver multi-year expansion, supported by 1) its ~26% market share in domestic industrial explosives, underpinned by an integrated manufacturing footprint and long-standing customer relationships; 2) firm expansion in Defence topline fuelled by increasing traction across ammunition, loitering munitions and missile systems; 3) expansion into overseas markets (across 10 countries), providing a meaningful avenue for diversification and scale; 4) leap in its technological capabilities with the development of full spectrum of drone systems (Nagastra, HALE/MALE UAVs, Rudrastra, Bhargavastra); and 5) improvement in profitability through scale and operating leverage.

We estimate topline/adj PAT CAGR of ~28%/~30% over FY26–29E, fuelled by fastest-growing Defence business, scale-up in international explosives, and favorable topline mix. The stock is at present trading at 58.7x/48.2x P/E on FY28/FY29E. Initiate with ‘BUY’.

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Solar Industries India – 2409026 – prabhu