Solar Industries India Ltd. share price target

Industrial explosives segment (54.1% of topline) reported growth of 43% YoY. Overseas and exports segment (37% of topline) grew 42.3% YoY to | 239 crore. Revenues from the defence segment were...

Solar Industries (SIL) reported Q2FY19 numbers that were above our estimates. Revenues came in at | 520.9 crore, up 27.5% YoY (our estimates | 496.3 crore). This was due to strong growth in overseas and exports' markets. The same grew 28% YoY to | 219.6 crore. Overseas and exports', which normally contribute ~30% to topline, contributed 42.1% to the topline in Q2FY19 Industrial explosives segment has reported 10% YoY growth (1% volume growth and 9% realisation growth) for the quarter. Revenues...

Sector: Chemicals /Small Cap | Earnings Update 1QFY19 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...

Solar Industries (SIL) reported Q1FY19 numbers that were above our estimates. Revenues came in strong at | 614.7 crore, up 31.7% YoY (our estimate: | 541 crore). This was due strong growth in overseas and exports' markets. The same grew 32% YoY to | 237 crore. Overseas and exports'. This segment has contributed 38.7% to the topline in Q1FY19 (against 25-30% contribution in earlier years). The...

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).

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...

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...

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...