Solar Industries: Management sees FY27 guidance beat; Goldman Sachs, Jefferies retain bullish stance
Solar Industries' management expects FY27 revenue to surpass its existing guidance of Rs 14,000 crore, with growth driven by domestic explosives, defence orders and overseas operations.
- Nov 5, 2026,
- Updated Nov 5, 2026 5:26 PM IST
Solar Industries India shares are likely to remain in focus after the company's management expressed confidence in exceeding its FY27 revenue and EBITDA guidance, supported by a strong defence order book, growing international business and opportunities in commercial explosives.
Global brokerage Goldman Sachs has maintained a Buy rating on the stock with a target price of Rs 26,550. The brokerage highlighted the company's strong growth prospects, particularly in defence and exports, while noting that volatility in ammonium nitrate prices remains a key risk.
The management expects FY27 revenue to surpass its existing guidance of Rs 14,000 crore, with growth driven by domestic explosives, defence orders and overseas operations. The company also remains optimistic about its EBITDA performance, backed by improving business prospects and a healthy order pipeline.
Defence order book provides strong revenue visibility
Solar Industries' total outstanding order book stood at Rs 20,178 crore, providing substantial visibility for future revenue growth. Defence orders accounted for Rs 17,568 crore, or approximately 87% of the overall backlog.
The defence business is expected to remain a key growth engine, with opportunities emerging from domestic defence indigenisation and international markets.
The management indicated that orders for the Pinaka rocket system are in the final stages, with potential order inflows estimated at around Rs 2,600 crore during FY27. The anticipated orders could further strengthen the company's defence order pipeline.
In the commercial explosives segment, the company's outstanding orders from Coal India and Singareni Collieries Company (SCCL) stood at Rs 2,610 crore, supporting revenue visibility in the domestic mining business.
Rs 12,000 crore capex plan to support expansion
Solar Industries is pursuing an ambitious capital expenditure programme to expand manufacturing capacity and strengthen its presence across defence and commercial explosives.
The company has outlined planned capex of around Rs 12,000 crore to support its long-term expansion strategy. Capital expenditure during H1 FY27 stood at Rs 873 crore, compared with Rs 1,556 crore for the entire FY26.
Its expansion priorities include defence manufacturing, indigenisation of advanced ammunition technologies, international explosives operations and capacity additions to meet growing demand.
The company is also looking to expand its overseas footprint through acquisitions, greenfield projects and deeper penetration into international mining markets.
Jefferies cuts target price
Jefferies has revised its target price on Solar Industries to Rs 26,260 from Rs 28,160, while lowering its valuation multiple to 65 times September 2028 estimated earnings from 70 times earlier. It said the revised valuation multiple factors in investor concerns surrounding the potential acquisition of Omnia and broadly reflects the stock's current FY27 earnings multiple.
Solar Industries is currently trading at around 62 times its September 2027 estimated earnings, according to the global investment bank.
Jefferies noted that the company's earnings growth trajectory remains strong, with an estimated FY26-30 earnings CAGR of around 29%, broadly in line with the 29% CAGR recorded between FY23 and FY26.
"We remain positive on Solar Industries given the 30%+ EPS CAGR and 28%+ ROE, even post its potential Omnia acquisition. Buy," said Jefferies
However, it flagged two key downside risks: slower-than-expected execution of the defence order book and the possibility of a higher acquisition price for Omnia.
Working capital improves; debt remains manageable
Solar Industries has also reported an improvement in working capital efficiency. Its working capital cycle declined to 108 days from 130 days in FY26, indicating better operational efficiency and cash-flow management.
Net debt increased to Rs 1,177 crore from Rs 867 crore in FY26. However, the net debt-to-EBITDA ratio improved to 0.29 times from 0.32 times, suggesting that the company's leverage remains comfortable relative to its operating earnings.
What lies ahead for Solar Industries
The company's growth outlook rests on multiple drivers, including defence order execution, potential Pinaka orders, expansion in international markets and rising demand for commercial explosives.
While the strong order book and planned investments provide a favourable long-term growth outlook, investors will closely monitor execution timelines, acquisition-related developments and fluctuations in ammonium nitrate prices.
With Goldman Sachs and Jefferies maintaining positive recommendations and target prices of Rs 26,550 and Rs 26,260, respectively, Solar Industries remains on the radar of investors tracking India's defence manufacturing and explosives sectors.
Solar Industries India shares are likely to remain in focus after the company's management expressed confidence in exceeding its FY27 revenue and EBITDA guidance, supported by a strong defence order book, growing international business and opportunities in commercial explosives.
Global brokerage Goldman Sachs has maintained a Buy rating on the stock with a target price of Rs 26,550. The brokerage highlighted the company's strong growth prospects, particularly in defence and exports, while noting that volatility in ammonium nitrate prices remains a key risk.
The management expects FY27 revenue to surpass its existing guidance of Rs 14,000 crore, with growth driven by domestic explosives, defence orders and overseas operations. The company also remains optimistic about its EBITDA performance, backed by improving business prospects and a healthy order pipeline.
Defence order book provides strong revenue visibility
Solar Industries' total outstanding order book stood at Rs 20,178 crore, providing substantial visibility for future revenue growth. Defence orders accounted for Rs 17,568 crore, or approximately 87% of the overall backlog.
The defence business is expected to remain a key growth engine, with opportunities emerging from domestic defence indigenisation and international markets.
The management indicated that orders for the Pinaka rocket system are in the final stages, with potential order inflows estimated at around Rs 2,600 crore during FY27. The anticipated orders could further strengthen the company's defence order pipeline.
In the commercial explosives segment, the company's outstanding orders from Coal India and Singareni Collieries Company (SCCL) stood at Rs 2,610 crore, supporting revenue visibility in the domestic mining business.
Rs 12,000 crore capex plan to support expansion
Solar Industries is pursuing an ambitious capital expenditure programme to expand manufacturing capacity and strengthen its presence across defence and commercial explosives.
The company has outlined planned capex of around Rs 12,000 crore to support its long-term expansion strategy. Capital expenditure during H1 FY27 stood at Rs 873 crore, compared with Rs 1,556 crore for the entire FY26.
Its expansion priorities include defence manufacturing, indigenisation of advanced ammunition technologies, international explosives operations and capacity additions to meet growing demand.
The company is also looking to expand its overseas footprint through acquisitions, greenfield projects and deeper penetration into international mining markets.
Jefferies cuts target price
Jefferies has revised its target price on Solar Industries to Rs 26,260 from Rs 28,160, while lowering its valuation multiple to 65 times September 2028 estimated earnings from 70 times earlier. It said the revised valuation multiple factors in investor concerns surrounding the potential acquisition of Omnia and broadly reflects the stock's current FY27 earnings multiple.
Solar Industries is currently trading at around 62 times its September 2027 estimated earnings, according to the global investment bank.
Jefferies noted that the company's earnings growth trajectory remains strong, with an estimated FY26-30 earnings CAGR of around 29%, broadly in line with the 29% CAGR recorded between FY23 and FY26.
"We remain positive on Solar Industries given the 30%+ EPS CAGR and 28%+ ROE, even post its potential Omnia acquisition. Buy," said Jefferies
However, it flagged two key downside risks: slower-than-expected execution of the defence order book and the possibility of a higher acquisition price for Omnia.
Working capital improves; debt remains manageable
Solar Industries has also reported an improvement in working capital efficiency. Its working capital cycle declined to 108 days from 130 days in FY26, indicating better operational efficiency and cash-flow management.
Net debt increased to Rs 1,177 crore from Rs 867 crore in FY26. However, the net debt-to-EBITDA ratio improved to 0.29 times from 0.32 times, suggesting that the company's leverage remains comfortable relative to its operating earnings.
What lies ahead for Solar Industries
The company's growth outlook rests on multiple drivers, including defence order execution, potential Pinaka orders, expansion in international markets and rising demand for commercial explosives.
While the strong order book and planned investments provide a favourable long-term growth outlook, investors will closely monitor execution timelines, acquisition-related developments and fluctuations in ammonium nitrate prices.
With Goldman Sachs and Jefferies maintaining positive recommendations and target prices of Rs 26,550 and Rs 26,260, respectively, Solar Industries remains on the radar of investors tracking India's defence manufacturing and explosives sectors.