Multibagger defence stock with 901% returns can log revenue CAGR of 25%, says Elara; shares price target
The multibagger stock, which zoomed 236% in three years and 901% in five years, is down 9% in the last six months.
- Mar 26, 2026,
- Updated Mar 26, 2026 9:53 AM IST
Shares of Solar Industries have lost their momentum the short term on the US tariff issue and the ongoing US-Israel and Iran war. The multibagger stock, which zoomed 236% in three years and 901% in five years, is down 9% in the last six months. In two weeks, the stock slipped 11.18%, making investors worry about the prospects of the explosives and the defence industry stock.
However, brokerage Elara Capital has initiated coverage on Solar Industries with a buy call stating the defence major is likely to clock a revenue CAGR of 25% and an earnings CAGR of 28% during FY25 -28E.
Solar Industries stock price target stands at Rs 15,450, a 23% upside to the previous close, according to Elara.
Describing its bullish stance on the Solar Industries stock, the brokerage said the firm has evolved from a dominant industrial explosives franchise into a vertically integrated defence manufacturer.
"SOIL is well positioned to capture on high entry -barrier segments, such as propellants, warheads and rocket integration, ammunition, military drones & unmanned aerial vehicles (UAV ), counter -drone systems (CDS), and anti-tank guided missiles (ATGM )," said Elara.
Meaanwhile, Solar industries stock ended 2.63% higher at Rs 12,890 on Wednesday against the previous close of Rs 12,559.9. Market cap of the explosives firm rose to Rs 1.16 lakh crore. Total 0.19 lakh shares of the firm changed hands amounting to a turnover of Rs 24.48 crore.
Elara cites robust defence growth, international explosives expansion, and alignment with the government’s defence indigenization drive via the private sector behind its bullish stance on the defence major.
"We expect an earnings CAGR of 28% during FY25 -28E with an average ROE and ROCE of 30% & 38%, respectively, during FY26 -28E. Key risks include execution delays in large defence platforms and slowdown in mining activity," added Elara.
The company currently has an order backlog of Rs 21,000 crore. The brokerage expects defence revenue to reach Rs 8000 crore by FY 29E; defense contribution is likely to rise from 18% in FY25 to ~ 50% by FY30E. The company plans Rs 2,200 crore in capital expenditure during FY26 -28E.
In the third quarter of this fiscal, net profit rose 41.7% year-on-year to Rs 446.3 crore compared with Rs 315 crore in the corresponding quarter last year.
Revenue rose 29.2% to Rs 2,548.3 crore from Rs 1,973 crore a year ago.
EBITDA rose 34.5% year-on-year to Rs 708 crore in the last quarter against Rs 526.4 crore in Q3 last year. EBITDA margin remained largely stable at 27.8% compared with 26.7% in the year-ago period.
SOIL is a dominant leader in the industrial explosives and defence sector with a 24% market share in its industry. The company offers industrial explosives and defence products.
Shares of Solar Industries have lost their momentum the short term on the US tariff issue and the ongoing US-Israel and Iran war. The multibagger stock, which zoomed 236% in three years and 901% in five years, is down 9% in the last six months. In two weeks, the stock slipped 11.18%, making investors worry about the prospects of the explosives and the defence industry stock.
However, brokerage Elara Capital has initiated coverage on Solar Industries with a buy call stating the defence major is likely to clock a revenue CAGR of 25% and an earnings CAGR of 28% during FY25 -28E.
Solar Industries stock price target stands at Rs 15,450, a 23% upside to the previous close, according to Elara.
Describing its bullish stance on the Solar Industries stock, the brokerage said the firm has evolved from a dominant industrial explosives franchise into a vertically integrated defence manufacturer.
"SOIL is well positioned to capture on high entry -barrier segments, such as propellants, warheads and rocket integration, ammunition, military drones & unmanned aerial vehicles (UAV ), counter -drone systems (CDS), and anti-tank guided missiles (ATGM )," said Elara.
Meaanwhile, Solar industries stock ended 2.63% higher at Rs 12,890 on Wednesday against the previous close of Rs 12,559.9. Market cap of the explosives firm rose to Rs 1.16 lakh crore. Total 0.19 lakh shares of the firm changed hands amounting to a turnover of Rs 24.48 crore.
Elara cites robust defence growth, international explosives expansion, and alignment with the government’s defence indigenization drive via the private sector behind its bullish stance on the defence major.
"We expect an earnings CAGR of 28% during FY25 -28E with an average ROE and ROCE of 30% & 38%, respectively, during FY26 -28E. Key risks include execution delays in large defence platforms and slowdown in mining activity," added Elara.
The company currently has an order backlog of Rs 21,000 crore. The brokerage expects defence revenue to reach Rs 8000 crore by FY 29E; defense contribution is likely to rise from 18% in FY25 to ~ 50% by FY30E. The company plans Rs 2,200 crore in capital expenditure during FY26 -28E.
In the third quarter of this fiscal, net profit rose 41.7% year-on-year to Rs 446.3 crore compared with Rs 315 crore in the corresponding quarter last year.
Revenue rose 29.2% to Rs 2,548.3 crore from Rs 1,973 crore a year ago.
EBITDA rose 34.5% year-on-year to Rs 708 crore in the last quarter against Rs 526.4 crore in Q3 last year. EBITDA margin remained largely stable at 27.8% compared with 26.7% in the year-ago period.
SOIL is a dominant leader in the industrial explosives and defence sector with a 24% market share in its industry. The company offers industrial explosives and defence products.