Solar Industries stock plunges 17% in two days; here's what DAM Capital says 

Solar Industries share price: Shares of Solar Industries India Ltd have plunged 17% in two days since the defence firm said it would buy 100% of South Africa-based Omnia Holdings for Rs 12,951 crore. Solar Industries India shares slipped to an intra day low of Rs 18,480 in the current session. The stock ended at Rs 22,307 on September 11. Since then, the stock has fallen 17.15%.

On September 14, Solar Industries made an announcement about the acquisition.

Solar Industries said Solar SA Investments Proprietary Limited, its wholly owned step down subsidiary of Solar Industries India Limited will buy South African industrial-explosives and fertiliser firm Omnia Holdings Limited for Rs 12,951 crore.

Solar Industries stock fell 4% to Rs 18,480 in the current session against the previous close of Rs 19,250. Market cap of the firm stood at Rs 1.70 lakh crore.

"Solar SA Investments Proprietary Limited (“Solar SA”) will acquire all outstanding shares of Omnia in an all-cash transaction for a consideration of approximately US$1.355 billion (?12,951 crores), subject to customary closing conditions, including receipt of required regulatory approvals and approval by Omnia shareholders ("Offer")," said Solar Industries.

Omnia Holdings Limited is Headquartered in South Africa and listed on the Johannesburg Stock Exchange (JSE).

Meanwhile, brokerage Dam Capital said the deal is valued at around 7.9 times EV/EBITDA and expected to be funded largely through internal accruals and debt. The brokerage assigned a buy call on the stock with a target price of Rs 22,000.

The transaction is expected to close by mid-2027 and strengthen Solar’s global commercial explosives and mining presence. The acquisition will lead to significant operational and cost synergies expected with Solar’s existing African operations.

The brokerage said FY28 management guidance is revenue of Rs 31,500– Rs 32,000 crore, EBITDA of Rs 6,800–7,000 Cr, Earnings Before Interest and Taxes of Rs 6,200 Cr and profit before tax is greater than Rs 5,000 cr.

DAM Capital expects the acquisition as transformational, though the agriculture and chemicals business remains a key earnings monitorable. Agriculture & chemicals continue to hold strategic importance despite its impact on the overall earnings profile.

Solar Industries is an India-based manufacturer of industrial explosives for the mining and infrastructure sector. The company offers industrial explosives and defence products.