Premier Explosives Ltd. share price target

Execution recovery underway; record order book provides strong growth visibility: PEL reported its consolidated order book at 1,569 crore (4.0x FY26 revenue), providing healthy medium-term visibility. Though, FY26 revenue growth remained moderate due to delayed execution, raw material constraints and operational disruptions, management highlighted that most of these challenges have now been addressed. The Chaffs & Flares (C&F) facility has resumed production, inspection-related dispatches have started moving, and alternate raw material sources for...

Expanding capacities across defence segment with focus on increasing better-margin products: Company is in process of increasing its capacity of Katepally facility (which focuses on RDX, HMX, and rocket integration) which is expected to be commissioned by Q1FY27E. Company plans a further capex in Telangana (land expected to be allotted in the coming months), which would further increase the overall capacity. A greenfield plant in Odisha is planned in three phases (~Rs. 800 crores capex over the next ten years). However, land has not been allotted for the same. We...

Growth set to pick-up led by strong industry tailwinds About the stock: Premier Explosives (PEL) specializes in producing high-energy materials, including bulk and packaged explosives and initiating systems for mining, infrastructure & construction. Company also manufactures missile and rocket propellants, strap-on motors for satellite launches, and various defence...

About the stock: Premier Explosives (PEL) specializes in producing high-energy materials, including bulk and packaged explosives and initiating systems for mining, infrastructure & construction. Company also manufactures missile and rocket propellants, strap-on motors for satellite launches, and various defence products like chaff, infrared flares, explosive bolts, and tear gas grenades. Defence contributes ~86% of revenue. OB at Rs 989 crore as of Q1FY26 Strong product portfolio with well-built manufacturing capabilities: PEL is one of the lead manufactures in the Indian explosives and defence...

Expanding capacities across defence segment with focus on increasing better-margin products: PEL is initiating a capital expenditure program to strengthen its defence and energetic materials portfolio. The Katepally facility, which focuses on RDX, HMX, and rocket integration, is set to increase production. A greenfield plant in Odisha is planned in three phases, (~Rs. 800 crores over ten years). Phase I, which includes production of ammunition, warheads, and HTPB raw materials, will require ~Rs 100 crore. To finance these initiatives, PEL aims to raise ~Rs. 300 crores through...

Premier Q4 Results Mixed: Premier Explosives (PEL) Q4 earnings were higher than our estimates for the quarter at Rs.2.62 (Vs. Est 2.43) on the back of improved EBITDA margin of 8.6% in Q4 (158 bps) and tax write backs (Rs. 77 Mn) despite ~ 30% fall in revenue (Rs. 586 Mn) booked during Q4.

Orders Dry-up; Revenue Visibility Turns Bleak: Revenue for Q2 declined by 8.1% YoY to Rs. 535 mn on account of lower explosivesales and EPS growth was flat on YoY basis in Q2 to reach Rs. 2.2. The decline in order backlog is a major disappointment and the current order book stands at Rs. 2,719 mn which is just 1x of FY18 revenues.

Rising Costs Dent Q1 Profitability: Premier Explosives' revenue grew by 4.5% in Q1 to Rs. 569 mn, however, due to rising cost pressures net income margin was down by 270 bps and reached a meagre 1.5% in Q1.

Rising Costs Dent Q4FY18 Profitability: Premier Explosives (PRE) Q4FY18 revenue grew by 15% to Rs. 833 mn on the back of strong execution in the defence segment. Defence revenues grew by 57%followed by commercial explosives at 8.5% in Q4FY18. However, multiple factors like unfavourable pricing, higher Ammonium Nitrate (AN) prices and finance costscontributed to fall in earning for the quarter by three-fourth to Rs. 2.4.

Order Book Build-up Offers Revenue Visibility; Premier Explosives revenue grew by 21% in Q3FY18 on the back of strong execution; however, pricing pressure in the Coal India contract, delay in pass through of higher Ammonium Nitrate (AN) prices impacted profitability and earnings dropped by 37% YoY to Rs.1.5 in Q3FY18.

Picking Pace in Execution; Margins Expanding: Strong order book position - Premier explosives (Premier) order book by end of Q2FY17 reached to Rs.2370mn; of this, segmental orders for explosives reach to Rs.1610mn, defence to Rs.870mn and services to Rs.250mn.