Shares of Solar Industries India Ltd have turned into a multibagger in the last three years. The defence sector stock, which closed at Rs 982.35 on August 3, 2020 was trading at Rs 3794 in the current session, delivering 286% returns during the period. In comparison, Sensex has risen 74% in three years. For the quarter ended June 2023, the Solar Industries reported its highest ever defence revenue crossing Rs 154 crore.
The defence firm reported a 10% rise in profit at Rs 202 crore in the June 2023 quarter against Rs 183 crore profit in the corresponding quarter of previous fiscal. Sales of Solar Industries rose 4% to Rs 1682 crore in Q1 against Rs 1616 crore in the June 2022 quarter. EBITDA climbed 14% to Rs 331 crore in Q1 against Rs 292 crore in the June 2022 quarter.
ALSO READ: This defence stock doubled investor wealth in a month; buy, sell or hold?
Profit before tax rose 10% to Rs 272 crore in the June 2023 quarter against Rs 247 crore profit in the corresponding quarter of previous fiscal.
Basic EPS stood at Rs 21.82 in Q1 compared to Rs 18.81 for Q1FY22, reflecting a growth of 22.80%.
Solar Industries shares were trading flat at Rs 3809 on BSE today. Solar Industries stock has gained 27.79 per cent in a year and fallen 14 per cent in 2023. Solar Industries stock has climbed 115 per cent in two years. However, the Solar Industries stock is trading 16.33% lower to its record high of Rs 4535.95 on January 3, 2023. It fell to a 52-week low of Rs 2824 on August 4, 2022.
ALSO READ: IRFC shares hit record high, rise for third session; buy, sell or hold?
Total 515 shares of the firm changed hands amounting to a turnover of Rs 19.57 lakh on BSE. Market cap of the firm stood at Rs 34,475 crore.
In terms of technicals, the relative strength index (RSI) of Solar Industries stands at 53.1, signaling it's trading neither in the overbought zone nor in the oversold zone. Solar Industries stock has a one-year beta of 0.6, indicating very low volatility during the period.
After Q1 earnings, SMIFS Research has assigned a buy call to the Solar Industries India stock with a target of Rs 4,500. Stop Loss should be fixed at Rs 3,300.
ALSO READ: Rs 19 to Rs 126: This railway stock turned into a multibagger in a year; can it touch Rs 200 mark?
“After a minor retracement from its recent highs, Solar Industries is seen reverting back exactly from its 50 EMA. Leading indicator stochastic is seen rising steadily after making double bottom in the oversold zone. The RSI is seen turning around from the previous bottom, suggesting pullback towards Rs 4,500 level. Based on this, one can ‘Buy’ Solar Industries on dips in the price range of Rs 3,800-3,600 for the target of Rs 4,500,” said SMIFS Research.
Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher said, "The stock has been moving sideways and has resistance near the 200 period MA average of Rs 3900 levels and would need a decisive breach above this barrier to anticipate for further upward move. The near term support is at around Rs 3700 zone and has been moving within this range."
Abhijeet from Tips2trades said, “Solar Industries is bearish on the daily charts with good resistance at Rs 3913. A daily close below the support of Rs 3750 could lead to a target of Rs 3515 in the near term."
Phillip Capital initiated coverage on the Solar Industries stock with a buy call. It expects the stock to touch Rs 4,318 in a year.
“Solar Industries (SOIL) is a dominant player in industrial explosives, controlling a significant one fourth of this market in India. We value SOIL at 35 times Sept’25 EPS (40% premium to average PE), to factor in its deepening foray into defence, which can disproportionately contribute to PAT, due to its superior margin profile. We believe premium valuations will sustain, as SOIL has displayed traits of being a winner with the least cyclicity, despite catering to a cyclical sector, and we also expect its moat to sustain, as no near competitor can match its scale and capabilities. We initiate with a BUY rating and a target of Rs 4,318, valuing it at 35x Sept’25 EPS,” the brokerage said.
Solar Industries is an India-based manufacturer of industrial explosives for the mining and infrastructure sector. The company offers industrial explosives and defence products.
Also read: Adani Enterprises, Adani Power shares in focus after Q1 results
Also read: Tata Power shares recover 29% from 52-week low; can they hit Rs 300 mark?