Company reported poor Q1FY21 due to subdued economic activity in the global as well as domestic market. Explosives sales volume declined by 24.0% YoY to 70,287 MT (vs 92,531 MT in Q1FY20) while realization declined by 7.0% YoY to INR 34,238/MT (vs INR 36,969/MT). Exports and overseas revenue contribution in Q1FY21 rose to 42.2% of revenue (vs ~31.5% in Q1FY20) and saw a growth of 6.0% YoY (+19.2% QoQ). Housing and Infra declined by 49.3% YoY (-34.1% QoQ, 22% of revenue), revenue from Coal India declined 10.4% YoY (-7.5% QoQ, 20% of revenue), Institutional revenue declined ~32.2% YoY (-30.7% QoQ, 10% of revenue), defense revenue declined 7.1% YoY (-11.4% QoQ, 5% of...

Solar Industries India (SIIL) reported consolidated revenue of Rs4.9bn in 1QFY21, down 21% YoY. Though sales were affected due to severe lockdowns in April and May 2020, June sales were better on YoY basis. Sales to Coal India fell 10% YoY to Rs985mn due to 12% YoY decline in coal production as mining and construction activities were muted. Housing & Infrastructure segment sales fell 49% YoY to Rs1.1bn due to labour unavailability. Sales of domestic explosives fell 30% YoY to Rs2.4bn due to 24% YoY dip in volume (at 70,287MT) and 7% YoY fall in realisation (at Rs34,238/MT). Exports & Overseas markets grew 6% YoY to Rs2.1bn, led by better sales in Ghana. Gross margin grew 250bps YoY to 45.1% owing to lower raw materials...

Global cues & slow industrial activity due to prolonged rain continue to affect volume; lower realizations due to subdued commodity prices: The management highlighted that unusually heavy monsoon & extended rainfall during the quarter impacted mining and infrastructure demand badly. There was also a general slowdown in the Indian as well as global economies, which affected demand in India, Zambia & Turkey. Company also had to face extension in delivery of Defense products from customer's end while expected new orders were further delayed. On account of this, the company's explosives sales volume declined during the quarter by 10.0% YoY to 94,927 MT while realization declined by 15% YoY due to global fall in...

Temporary blip in growth, 4Q margin an aberration NBIE Values your patronage- Vote for The Team in the Asia Money poll 2020. Click Here Solar Industries India (SIIL) reported consolidated revenue of Rs5.5bn in 4QFY20, down 19% YoY, as sales worth Rs1bn were deferred due to lockdown. The topline was 7% above our estimate but 15% below consensus. In the domestic market, growth was impacted by heavy monsoons extending in Jan 2020 and lockdown restrictions, affecting mining and construction activities. Thus, Housing & Infrastructure segment sales fell 30% YoY to Rs1.6bn while sales to...

Companies like Larsen & Toubro and KEC with exposure to Middle East and North Africa (MENA) region are expected to get moderately impacted by the recent more than 30% fall in crude oil prices to US$35/barrel. This is expected to impact overall orders/awarding from MENA region. Companies like Elgi Equipments, AIA Engineering, Thermax, Engineers India and Kalpataru Power with exposure to international geographies like Europe, Middle East, China for sales or essential raw material may get impacted. Accordingly, we have tried to factor in the additional risk and revised our...

Background: Established in 1995, Solar Industries is the largest manufacturer of industrial explosives and explosive initiating systems in India and has the world's largest manufacturing facility for packaged explosives. With a licensed explosives capacity of over 290,000 MT/annum, the company has ~28% market share in India. Solar, with a 70% market share in exports from India, exports to 51 countries around the world. Economic Explosives, a 100% subsidiary, manufactures detonators. Solar has manufacturing facilities spread across 25 locations and eight states in India. In recent years expanded its manufacturing base to Nigeria,...

Solar Industries India (SIIL) reported consolidated revenue of Rs5.6bn in 3QFY20, down 14% YoY and 13%/18% below our/consensus estimate. In the domestic market, growth was impacted by heavy unseasonal rains, affecting mining, construction and well-sinking activities. Thus, Housing & Infrastructure segment fell 20% YoY to Rs1.3bn while sales to Coal India (CIL) declined 27% YoY to Rs900mn. Sales of explosives fell 21% YoY to Rs2.8bn due to 10% YoY dip in volume (at 86,386MT) and 13% YoY fall in realisation (at Rs32,203/MT) as ammonium nitrate prices fell 8% QoQ. In Exports & Overseas markets, political uncertainties across the globe led to 8% YoY decline in revenue to Rs2.2bn. Gross margin jumped 380bps YoY to 46.4% (led by...

The weak performance in Q3FY20 was largely the result of extended monsoons, which led to the disruption in mining and infrastructure activities. This impacted the sale of packaged explosives in the eastern, central and northern regions. Demand for packaged explosives is expected to remain weak in the near term. On the other hand, Coal India's production was hindered by flooded mines. However, December and January saw an uptick in mining activities giving some respite for Q4FY20. Decline in prices of ammonium nitrate by ~8% coupled with a change in product mix (17% YoY...

Sector: Chemicals /Small Cap | Earnings Update 2QFY20 Background: Established in 1995, Solar Industries is the largest manufacturer of industrial explosives and explosive initiating systems in India and has the world's largest manufacturing facility for packaged explosives. With a licensed explosives capacity of over 290,000 MT/annum, the company has ~28% market share in India. Solar, with a 70% market share in exports from India, exports to 51 countries around the world. Economic Explosives, a 100% subsidiary, manufactures detonators. Solar has manufacturing facilities spread across 25 locations and eight states in India. In recent years expanded its manufacturing base to Nigeria, Zambia, South...

Solar Industries India (SIIL) reported consolidated revenue of Rs5.1bn in 2QFY20, down 3% YoY and 14%/10% below our/consensus estimates. Topline growth was affected by prolonged monsoon and global economic slowdown resulting from trade conflict. Housing & Infrastructure segment grew 7% YoY to Rs1.1bn, while institutional sales were up 4% YoY at Rs655mn. Defence sales were softer at Rs447mn, while exports and overseas revenue declined by 8% YoY to Rs2bn, impacted by Rs75mn translation loss from the overseas business and lower sales in Turkey and Zambia. CIL sales declined 10% YoY to Rs753mn, owing to subdued mining activity due to rains. Sales of explosives fell 3% YoY to Rs2.2bn due to 6% YoY decline...

Solar Industries India (SIIL) reported consolidated revenue of Rs5.1bn in 2QFY20, down 3% YoY and 14%/10% below our/consensus estimates. Topline growth was affected by prolonged monsoon and global economic slowdown resulting from trade conflict. Housing & Infrastructure segment grew 7% YoY to Rs1.1bn, while institutional sales were up 4% YoY at Rs655mn. Defence sales were softer at Rs447mn, while exports and overseas revenue declined by 8% YoY to Rs2bn, impacted by Rs75mn translation loss from the overseas business and lower sales in Turkey and Zambia. CIL sales declined 10% YoY to Rs753mn, owing to subdued mining activity due to rains. Sales of explosives fell 3% YoY to Rs2.2bn due to 6% YoY decline...

Sector: Chemicals /Small Cap | Earnings Update 1QFY20 Background: Established in 1995, Solar Industries is the largest manufacturer of industrial explosives and explosive initiating systems in India and has the world's largest manufacturing facility for packaged explosives. With a licensed explosives capacity of over 290,000 MT/annum, the company has ~28% market share in India. Solar, with a 70% market share in exports from India, exports to 51 countries around the world. Economic Explosives, a 100% subsidiary, manufactures detonators. Solar has manufacturing facilities spread across 25 locations and eight states in India. In recent years expanded its manufacturing base to Nigeria, Zambia, South Africa, Turkey, Ghana and Australia. SIIL has also interests in the coal mines (in Chattisgarh) through two JVs....

Solar Industries India (SIIL) reported consolidated revenue of Rs6.2bn in 1QFY20, flat YoY and 11% below our estimate. The topline was driven by Housing & Infrastructure segment (up 30% YoY at Rs2.1bn despite a high base) and Coal India (up 19% YoY at Rs1.1bn). Defence segment's sales were softer at Rs252mn, while exports and overseas revenue declined by 18% YoY to Rs2bn, impacted by Rs355mn translation loss from the overseas business and lower sales in Turkey and Zambia. Sales of explosives grew by 9% YoY to Rs3.4bn, driven by 2% YoY volume growth (at 92,531MT) and 7% YoY rise in realisation (at Rs36,969/MT). EBITDA fell 3% YoY to Rs1.2bn, translating into 80bps YoY decline in operating margin to 20.1%, marginally...

Operational performance below expectation, impacted by weak overseas business: 1QFY20 consol. revenue remained flat YoY at INR6.2b (v/s our est. of INR7.2b), impacted by 18% YoY decline in exports and overseas business (INR350m translational loss in the overseas business). EBIDTA declined 2.8% YoY to INR1.3b (below our est. of INR1.5b). Margin declined 80bp YoY to 20.5% (below our est. of 21.3%) due to (a) raw material price (ammonium nitrate) increase not being completely passed on to the end consumer, and (b) forex loss of INR90m being impacted due to INR appreciation. Adj. net profit grew 5%...

For FY19, topline in the industrial explosive space grew 21.2% YoY to | 1273 crore. Volumes grew 8.8% YoY while realisations grew robustly by 11.3% YoY. Q1FY20 has seen softened demand from coal mining companies due to lower overburden removal. Over the next few quarters, the management expects demand to stabilise for the year. Driven by push for infrastructure sector by the government, road construction and housing are also expected to do well, going ahead. On the whole, improved offtake from key clients like Coal India and SCCL are expected to drive industrial explosives growth...

Solar Industries India (SIIL) reported consolidated revenues of Rs6.7bn in 4QFY19 (highest-ever quarterly sales), up 17% YoY and 6% above our estimate. The top-line growth was driven by housing and infrastructure segment (up 43% YoY at Rs2.3bn) as well as sales to Coal India (up 19% YoY at Rs1.3bn). Defence segment's sales were healthy at Rs573mn, while exports and overseas revenues declined 16% YoY to Rs1.7bn impacted by softer sales in Turkey and Zambia. Sales of explosives grew 15% YoY to Rs3.8bn driven by 10% YoY volume growth (105,244MT) and 5% YoY rise in realisation (Rs36,324/MT). EBITDA grew 20% YoY to Rs1.4bn, translating to a 60bps YoY rise in operating margin to 21.1%, in line with our estimate. PAT grew 9% YoY to Rs716mn, 6% above our...

Explosives, defence continues to clock solid performance In FY19, topline in industrial explosives space grew 21.2% YoY to | 1273 crore. Volumes grew 8.8% YoY while realisations grew robustly by 11.3% YoY. Going ahead, the management commentary suggests this segment will pick up due to increased offtake from its key clients like Coal India and SCCL. Packaged (cartridge) explosives are also likely to continue their accelerated trajectory with strong demand from infrastructure and mining customers. Defence execution has materially picked up with FY19 revenues at | 170...

Operational performance in line with expectations: 4QFY19 consol. revenue increased 17.0% YoY to INR6.7b (v/s our estimate of INR6.8b), supported by growth in volume (10%) and realization (5%). EBIDTA grew 21% YoY to INR1.4b (in-line with our estimate of INR1.4b). Margin improved 60bp YoY to 21.1% (marginally below our estimate of 21.3%) due to (a) raw material price (ammonium nitrate) increase not being completely passed on to the end consumer, and (b) forex loss of INR17m being impacted due to INR appreciation. Adj. net profit grew 18% YoY to INR776m (ahead of our estimate...

Sector: Chemicals /Small Cap | Earnings Update 4QFY19 Background: Established in 1995, Solar Industries is the largest manufacturer of industrial explosives and explosive initiating systems in India and has the world's largest manufacturing facility for packaged explosives. With a licensed explosives capacity of over 290,000 MT/annum, the company has ~28% market share in India. Solar, with a 70% market share in exports from India, exports to 51 countries around the world. Economic Explosives, a 100% subsidiary, manufactures detonators. Solar has manufacturing facilities spread across 25 locations and eight states in India. In recent years expanded its manufacturing base to Nigeria, Zambia, South...

1. Founded in 1955 by Shri Satyanarayan Nandlal Nuwal. 2. Solar Group is a leading company with the global marketplace in the explosive business. With an...