Defence stock to buy: Antique sees 32% upside in Solar Industries
Solar Industries: Antique Stock Broking said the defence order book stood at Rs 16,600 crore, with defence revenues expected to touch Rs 3,000 crore in FY26.
- Dec 29, 2025,
- Updated Dec 29, 2025 9:59 AM IST
Antique Stock Broking, which met the management of Solar Industries India to assess current industry trends, retained its 'Buy' rating on the stock with an unchanged target price of Rs 16,600 apiece. The target suggests 32 per cent potential upside over Monday's intraday price of Rs 12,532 apiece.
The domestic brokerage, which visited the company’s explosives and defence facilities in Nagpur, said demand from the coal sector has been impacted by an extended monsoon, though it is now recovering. It noted that the company management reiterated its revenue guidance of Rs 10,000 crore for FY26, while the defence order book stood at Rs 16,600 crore, with defence revenues expected to touch Rs 3,000 crore in FY26.
Antique said the Solar Industries management envisaged a revenue compound annual growth rate of about 15 per cent over the next three to four years, led by overseas and defence businesses.
The brokerage said Solar Industries is likely to continue witnessing strong growth momentum across segments, with margins expected to remain stable over the next 12-24 months. It estimated sales and profit after tax to grow at 28 per cent and 31 per cent, respectively, over FY25-28, compared with 18 per cent and 23 per cent CAGR over FY15-25. Return on equity and pre-tax return on capital employed stood at 31 per cent and 37 per cent in FY25.
Antique maintained its earnings estimates and retained a Buy, based on 55 times FY28E earnings. The brokerage said the domestic business, which accounted for 43 per cent of FY25 revenue, is led by coal, housing and infrastructure. The segment was impacted by excessive and prolonged rainfall in the first half of FY26. Coal mining contributed nearly 13 per cent of consolidated revenue.
Coal production rose 2.06 per cent year on year in November 2025, though it declined 1.43 per cent year on year during April-November 2025.
The index of industrial production for mining remained negative at 1.9 per cent during April–October 2025. However, the management expected a recovery, and Antique forecast domestic sales CAGR of 10 per cent over FY25-28.
The overseas business, contributing 38 per cent of FY25 revenue, continued to benefit from expansion into new geographies. Solar Industries had overseas manufacturing presence across Africa, Southeast Asia and Turkey.
The growth momentum remained healthy in South Africa, Turkey, Ghana, Nigeria and Tanzania. The company planned to start operations in Zimbabwe and Kazakhstan and aimed to enter Saudi Arabia.
Antique said overseas revenue had grown at a 22.5 per cent CAGR over FY16–25 and is expected to sustain robust growth, driven by ramp-up at existing locations and entry into new markets.
The defence segment, accounting for 18 per cent of FY25 revenue, continued to gain momentum. The segment included high-energy materials, composite propellants, ammunition, rockets, warheads and missiles.
The defence order book stood at Rs 16,600 crore, led by the addition of a Rs 6,000 crore order for Pinaka Mk1 rockets. With more Pinaka variants expected, including longer-range and guided versions, Antique said Solar Industries is well-placed to secure incremental orders. The brokerage estimated defence revenue CAGR of 64 per cent over FY25-28.
Antique said Solar Industries, as a market leader in a highly regulated explosives industry with high entry barriers, remained well-positioned for sustained growth. It estimated Ebitda and net profit CAGR of 20 per cent and 27 per cent, respectively, over FY25–28E. Key risks included a prolonged slowdown in industrial activity and adverse currency movements.
Antique Stock Broking, which met the management of Solar Industries India to assess current industry trends, retained its 'Buy' rating on the stock with an unchanged target price of Rs 16,600 apiece. The target suggests 32 per cent potential upside over Monday's intraday price of Rs 12,532 apiece.
The domestic brokerage, which visited the company’s explosives and defence facilities in Nagpur, said demand from the coal sector has been impacted by an extended monsoon, though it is now recovering. It noted that the company management reiterated its revenue guidance of Rs 10,000 crore for FY26, while the defence order book stood at Rs 16,600 crore, with defence revenues expected to touch Rs 3,000 crore in FY26.
Antique said the Solar Industries management envisaged a revenue compound annual growth rate of about 15 per cent over the next three to four years, led by overseas and defence businesses.
The brokerage said Solar Industries is likely to continue witnessing strong growth momentum across segments, with margins expected to remain stable over the next 12-24 months. It estimated sales and profit after tax to grow at 28 per cent and 31 per cent, respectively, over FY25-28, compared with 18 per cent and 23 per cent CAGR over FY15-25. Return on equity and pre-tax return on capital employed stood at 31 per cent and 37 per cent in FY25.
Antique maintained its earnings estimates and retained a Buy, based on 55 times FY28E earnings. The brokerage said the domestic business, which accounted for 43 per cent of FY25 revenue, is led by coal, housing and infrastructure. The segment was impacted by excessive and prolonged rainfall in the first half of FY26. Coal mining contributed nearly 13 per cent of consolidated revenue.
Coal production rose 2.06 per cent year on year in November 2025, though it declined 1.43 per cent year on year during April-November 2025.
The index of industrial production for mining remained negative at 1.9 per cent during April–October 2025. However, the management expected a recovery, and Antique forecast domestic sales CAGR of 10 per cent over FY25-28.
The overseas business, contributing 38 per cent of FY25 revenue, continued to benefit from expansion into new geographies. Solar Industries had overseas manufacturing presence across Africa, Southeast Asia and Turkey.
The growth momentum remained healthy in South Africa, Turkey, Ghana, Nigeria and Tanzania. The company planned to start operations in Zimbabwe and Kazakhstan and aimed to enter Saudi Arabia.
Antique said overseas revenue had grown at a 22.5 per cent CAGR over FY16–25 and is expected to sustain robust growth, driven by ramp-up at existing locations and entry into new markets.
The defence segment, accounting for 18 per cent of FY25 revenue, continued to gain momentum. The segment included high-energy materials, composite propellants, ammunition, rockets, warheads and missiles.
The defence order book stood at Rs 16,600 crore, led by the addition of a Rs 6,000 crore order for Pinaka Mk1 rockets. With more Pinaka variants expected, including longer-range and guided versions, Antique said Solar Industries is well-placed to secure incremental orders. The brokerage estimated defence revenue CAGR of 64 per cent over FY25-28.
Antique said Solar Industries, as a market leader in a highly regulated explosives industry with high entry barriers, remained well-positioned for sustained growth. It estimated Ebitda and net profit CAGR of 20 per cent and 27 per cent, respectively, over FY25–28E. Key risks included a prolonged slowdown in industrial activity and adverse currency movements.