Solar Industries India Ltd. share price target

1 August 2018 20.9%, missing our estimate of 21.9%. Operating margin was impacted by INR120m forex loss, adjusting for which operating margin was healthy at Performance beat was driven by better-than-expected performance from the overseas and exports business segment. supported by all segments except the institutional segment (14% of sales; +2% YoY). Sales from CIL registered 26% YoY growth, supported by increase in production of coal, infrastructure segment contributed 33% YoY growth, and overseas segment registered 32.5% YoY growth. Explosives segment (bulk + cartridge) registered revenue growth of 17% YoY, supported by volume growth of 8.7%. During the quarter realization improved by 7.5% on YoY basis. business was INR280m (v/s INR4.5m in 1QFY18), driven by pickup in execution of orders in hand. SOIL expects revenue contribution to reach INR2b in FY19 as compared to INR378m in FY18. Defense order backlog stands at INR2.

Consol. revenue rose 30% YoY to INR5.8b (est. of INR5.0b) in 4QFY18. EBIDTA grew 28.5% YoY to INR1.2b (est. of INR951m), with the EBIDTA margin of 20.5% (-30bps YoY) ahead of our estimate of 19.1%. Adj. net profit rose 21.1% YoY to INR678m (est. of INR547m). Performance beat was driven by a better-than-expected performance from the overseas and exports business segment. For FY18, revenue stood at INR19.2b (+21.3% YoY), operating profit at INR4.1b (+27.1% YoY) and adj. PAT at INR2.3b (+17.3% YoY).

Operational performance below expectations: Consol. revenue rose 10% YoY to INR4.6b (est. of INR5.6b) in 3QFY18. EBIDTA grew 35% YoY to INR0.9b (est. of INR1.3b), with the margin improving 420bp YoY to 22.4%, helped by strong...

Solar Industries Ltd (SIIL) reported weak Q3FY18 numbers on account of muted domestic performance. Revenues came in at | 465.7 crore, up 7.5% YoY (our estimates | 487.8 crore). The company witnessed weak revenue growth due to volume de-growth of 5.7% in the bulk segment and realization decline of 7.4% and 7.7% in both bulk and cartridge segment respectively. The only silver lining was strong...

Incorporated in 1996, Solar Industries India (SIIL) is the largest manufacturer and exporter of industrial explosives and explosive initiating systems in India. Bulk & packaged (cartridge) explosives and initiating systems fall under the umbrella of industrial explosives while its defence portfolio boasts of a wide range of products like propellants for rockets, pyros, fuses, military explosives, flares, riot control devices and many more. Initiating systems comprises of detonators, detonating fuses and cast...

Solar Industries India Ltd. (SIIL) is the dominant player

Solar Industries (SIL) reported strong Q2FY18 numbers wherein revenues came in at | 408.4 crore, up 21.6% YoY (our estimate: | 365.2 crore). The company witnessed strong revenue growth due to strong volume growth of 18.3% and 26.2% in bulk and cartridge segment, respectively. Bulk & cartridge segment contributed 60-65% to the topline. However, realisations in both segments, bulk and cartridge witnessed a decline of 8% & 2%, respectively (after adjusting for excise duty and other taxes). The overseas segment also...

Sector: Chemicals /Small Cap | Earnings Update 2QFY18 Background: Established in 1984, Solar Industries is the largest manufacturer of industrial explosives and explosive initiating systems in India. 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 19 countries in Africa and South East Asia. 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 and Turkey. SIIL has also interests in the coal...

Operational performance meaningfully ahead of estimates: Consol. revenue increased 30% YoY to INR4.1b (est. of INR3.6b) in 2QFY18. EBIDTA grew 30% YoY to INR0.9b (est. of INR595m), with the margin stable YoY at 22.0%, supported by strong growth in the overseas business. Adj. net profit rose 23% YoY to INR483m (est. of INR304m). aided by strong growth in overseas segment: Consol. revenue was driven by strong growth in the overseas segment (+85% YoY). On the domestic front, housing and infrastructure segment sales grew 45% YoY. However, the quarter...

Background Established in 1984, Solar Industries is the largest manufacturer of industrial explosives and explosive initiating systems in India. 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 19 countries in Africa and South East Asia. Economic Explosives, a 100% subsidiary, manufactures detonators. Solar has manufacturing facilities spread across 16 locations and eight states in India. In recent years expanded its manufacturing base to Nigeria, Zambia and Turkey. SIIL has also interests in the coal mines (in Chattisgarh) through two JVs. Solar is...