Shares of Solar Industries Ltd have delivered multibagger returns in the last three years. The defence sector stock, which closed at Rs 1,301 on March 19, 2021 hit a record high of Rs 8980.45 in the previous session on BSE.
An amount of Rs 1 lakh invested in Solar Industries India stock three years ago would have turned into Rs 6.73 lakh today. In comparison, Sensex has risen 47 per cent during the period. The defence sector stock fell to a 52-week low of Rs 3456.95 on July 11, 2023.
In the current session, Solar Industries shares fell 2.65% to Rs 8575.90 against the previous close of Rs 8860.60 on BSE.
Market cap of the firm fell to Rs 78,110 crore in early deals today. Total 3,520 shares of the firm changed hands amounting to a turnover of Rs 3.90 crore on BSE. The stock had a beta of 0.4, indicating very low volatility in the last one year.
ICICI Securities has maintained a target price of Rs 9050.
“Solar Industries (SOIL) has received an export order – worth INR 4.45 bn to be executed over two years – for products to be used in defence application. Key points: 1) Second major defence export order in Q4FY24. 2) We see the defence order book at Rs 2400 crore with the proportion of exports at 60-65%, as on date. 3) Duration of execution of exports contract is 2-3 years. We estimate the revenue from defence sector to be almost 18-20% of overall FY25 onwards (FY23: 5.7%). Hence, EBITDA margin may also improve to above 25% by FY26E. Further, we expect Solar Industries to win the Pinaka order in the near term. Baking in improved margins and the potential for further defence orders, we raise our valuation multiple to 55x (earlier 50x); accordingly, our target price works out to Rs 9,050 (earlier Rs 8,130). Retain BUY,” said ICICI Securities.
On March 11, the company said it won export orders worth Rs 455 crore for supply of products over next two years for use in defence products. The two-year contract is for the supply of products for use in defence products. The company did not mention the name of the client from which it won the orders.
In terms of technicals, the relative strength index (RSI) of Solar Industries stands at 73.4, signaling the stock is trading neither in the overbought and nor in the oversold zone. Solar Industries shares are trading higher than the 5 day, 10 day, 50 day, 100 day and 200 day moving averages.
Solar Industries posted a marginal fall in Q3 net profit at Rs 203.3 crore against Rs 204.6 crore in the December 2022 quarter.
Revenue fell to Rs 1,440 crore in the December 2023 quarter against Rs 1819 crore in the December 2022 quarter.
About Solar Industries
Solar Industries is an India-based manufacturer of industrial explosives for the mining and infrastructure sector. The company offers industrial explosives and defence products.