1 hr ago
Motilal Oswal Sees 55% Upside for Solar Industries
Solar Industries India makes explosives and equipment used for defence.
Its shares have gained 48% over six months, according to the article.
Motilal Oswal has started covering the company with a Buy rating.
The brokerage’s main estimate values each share at ₹23,000.
In a very positive situation, it sees the price reaching ₹28,800, or about 55% above the cited reference level.
In a less favorable situation, it estimates ₹17,400.
Faster completion of defence orders and better prices could help the company.
New Pinaka versions, Bhargavastra, 155 mm ammunition, and Project Kusha could increase future business.
The company is also seeking to acquire South Africa-based Omnia Holdings Limited.
Motilal Oswal initiated a ‘Buy’ rating on Solar Industries India with a base-case target of ₹23,000 per share.
The brokerage set bear- and bull-case targets of ₹17,400 and ₹28,800, respectively.
Solar Industries shares rose nearly 2% during Tuesday’s intraday trading session after the recommendation.
The company manufactures industrial explosives, military explosives, and defence systems including Pinaka and Akash rocket systems.
Motilal Oswal expects faster order execution, new defence programmes, and the proposed Omnia acquisition to support future growth.
- Who
- Solar Industries India Limited and Motilal Oswal Financial Services.
- What
- Motilal Oswal initiated a Buy rating and issued bear-, base-, and bull-case price targets for Solar Industries.
- Where
- Solar Industries is headquartered in Maharashtra, India, and is pursuing an acquisition of South Africa-based Omnia Holdings Limited.
- When
- The shares moved nearly 2% during Tuesday’s intraday trading session; the article does not provide a calendar date.
- Why
- The brokerage expects defence-order execution, higher realisations, new defence programmes, and the proposed Omnia acquisition to support growth.
Positive outlook
Cautious outlook
Defence-order execution
Positive outlook
Faster execution of the defence order book and higher realisations could help Solar Industries outperform expectations, supporting the bull-case target of ₹28,800.
Cautious outlook
Slower-than-expected execution of the defence order book and lower realisations could reduce profitability, supporting the bear-case target of ₹17,400.
Future growth drivers
Positive outlook
New Pinaka variants, Bhargavastra, 155 mm ammunition, Project Kusha, and the proposed Omnia acquisition could increase inflows and future execution.
Cautious outlook
The brokerage’s bear case assumes 15% lower profitability and a 10% lower valuation multiple because execution and realisation risks may persist.
Key facts
- Base-case rating
- Buy
- Base-case target
- ₹23,000 per share
- Bear-case target
- ₹17,400 per share
- Bull-case target
- ₹28,800 per share
- Six-month return
- 48%, according to the article
- Proposed acquisition
- Omnia Holdings Limited of South Africa
- Projected FY26–30 growth
- Motilal Oswal expects consolidated revenue and profit after tax CAGR of 43% and 34%, respectively
Quotes
Motilal Oswal Financial Services
Brokerage that initiated the Buy rating and provided Solar Industries’ valuation scenarios
“After the completion of the Omnia acquisition, we expect industrial explosives/defense mix of 78%/22% by FY29. We expect SOIL to deliver a CAGR of 43%/34% in consolidated revenue/PAT over FY26-30”
livemint.com
Sources
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