Solar Industries stock gets 'Buy' call on defence push and global explosives growth
Solar Industries: The investment case is centred on expectations of multi-year growth for the company, says PL Capital.
- Sep 24, 2026,
- Updated Sep 24, 2026 5:09 PM IST
PL Capital has initiated coverage on Solar Industries India Ltd (SOIL) with a ‘Buy’ rating and a target price of Rs 23,124. The valuation is based on a price-to-earnings multiple of 62x Sep’28E, with an implied EV/EBITDA of 34x Sep’28E. The stock is currently trading at 58.7x and 48.2x P/E on FY28 and FY29 estimates, respectively.
Also read: Solar Industries, Astra Microwave shares: Targets as Jefferies initiates coverage
The investment case is centred on expectations of multi-year growth for the company. The factors cited include SOIL’s around 26% share in the domestic industrial explosives market, growth in defence revenue led by traction in ammunition, loitering munitions and missile systems, expansion into overseas markets across 10 countries, a wider technology base through drone systems such as Nagastra, HALE/MALE UAVs, Rudrastra and Bhargavastra, and an expected improvement in profitability through scale and operating leverage.
Revenue and adjusted PAT are estimated to grow at a CAGR of about 28% and 30% respectively over FY26-29E, supported by the faster-growing defence business, scale-up in international explosives and a favourable revenue mix.
SOIL has built a strong position in the industrial explosives market, with an established domestic franchise across bulk explosives, packaged explosives and initiating systems. Its domestic business is seen benefiting from sustained mining activity, particularly in coal and iron ore.
The company commands about 23% wallet share of Coal India’s explosives consumption. Outside India, SOIL has established a growing presence across Africa, Australia and other mining markets, giving it room to scale its explosives business in line with global mining activity.
The company began as an explosive trading business before moving into manufacturing through the establishment of its subsidiary, Economic Explosives. Originally incorporated as Solar Explosives Ltd, it was renamed Solar Industries India Ltd in February 2009, reflecting its shift into a full-stack industrial and defence energetics provider.
In the domestic market, SOIL has maintained a leading position in a highly regulated and capacity-intensive industry. Its share of the Indian explosives market has remained at about 26% in recent years, up from around 23% in FY15. This position has been supported by integrated manufacturing capabilities, strong backward integration in key raw materials, an extensive distribution network with proximity to mines, and a diversified product portfolio.
The broader explosives industry in India has also recorded sustained volume growth. Total industry volume rose from 1 million mt in FY15 to about 2.2 million mt in FY25, implying a CAGR of about 9%. Growth was led by the SME and bulk explosives segment, which expanded from 0.6 million mt to 1.5 million mt, a CAGR of 9.4%, while packaged explosives grew at a CAGR of 7.6%. The rise in bulk explosives consumption reflects the increasing scale of mining activity and greater adoption of bulk products in large open-cast mining operations.
Overall, the initiation note cites SOIL’s domestic explosives leadership, expanding global presence, growing defence business and broader technology base as the main reasons for the ‘Buy’ rating, while also pointing to strong expected growth in revenue and adjusted profit over FY26-29E.
PL Capital has initiated coverage on Solar Industries India Ltd (SOIL) with a ‘Buy’ rating and a target price of Rs 23,124. The valuation is based on a price-to-earnings multiple of 62x Sep’28E, with an implied EV/EBITDA of 34x Sep’28E. The stock is currently trading at 58.7x and 48.2x P/E on FY28 and FY29 estimates, respectively.
Also read: Solar Industries, Astra Microwave shares: Targets as Jefferies initiates coverage
The investment case is centred on expectations of multi-year growth for the company. The factors cited include SOIL’s around 26% share in the domestic industrial explosives market, growth in defence revenue led by traction in ammunition, loitering munitions and missile systems, expansion into overseas markets across 10 countries, a wider technology base through drone systems such as Nagastra, HALE/MALE UAVs, Rudrastra and Bhargavastra, and an expected improvement in profitability through scale and operating leverage.
Revenue and adjusted PAT are estimated to grow at a CAGR of about 28% and 30% respectively over FY26-29E, supported by the faster-growing defence business, scale-up in international explosives and a favourable revenue mix.
SOIL has built a strong position in the industrial explosives market, with an established domestic franchise across bulk explosives, packaged explosives and initiating systems. Its domestic business is seen benefiting from sustained mining activity, particularly in coal and iron ore.
The company commands about 23% wallet share of Coal India’s explosives consumption. Outside India, SOIL has established a growing presence across Africa, Australia and other mining markets, giving it room to scale its explosives business in line with global mining activity.
The company began as an explosive trading business before moving into manufacturing through the establishment of its subsidiary, Economic Explosives. Originally incorporated as Solar Explosives Ltd, it was renamed Solar Industries India Ltd in February 2009, reflecting its shift into a full-stack industrial and defence energetics provider.
In the domestic market, SOIL has maintained a leading position in a highly regulated and capacity-intensive industry. Its share of the Indian explosives market has remained at about 26% in recent years, up from around 23% in FY15. This position has been supported by integrated manufacturing capabilities, strong backward integration in key raw materials, an extensive distribution network with proximity to mines, and a diversified product portfolio.
The broader explosives industry in India has also recorded sustained volume growth. Total industry volume rose from 1 million mt in FY15 to about 2.2 million mt in FY25, implying a CAGR of about 9%. Growth was led by the SME and bulk explosives segment, which expanded from 0.6 million mt to 1.5 million mt, a CAGR of 9.4%, while packaged explosives grew at a CAGR of 7.6%. The rise in bulk explosives consumption reflects the increasing scale of mining activity and greater adoption of bulk products in large open-cast mining operations.
Overall, the initiation note cites SOIL’s domestic explosives leadership, expanding global presence, growing defence business and broader technology base as the main reasons for the ‘Buy’ rating, while also pointing to strong expected growth in revenue and adjusted profit over FY26-29E.