Solar Industries India Limited — Credit Ratings, 24-04-2025: Credit Rating

Revenue grew by approximately 21% for the nine months ending March 31, driven by improved realizations from declining raw material prices, particularly ammonium nitrate. This recovery follows a 12% decline in fiscal 2024. The defence segment has notably contributed to this growth, with the order book expanding to ₹7,122 crore from ₹5,129 crore year-on-year. A significant ₹6,084 crore order from the Ministry of Defence for the PINAKA Multiple Launcher Rocket System will further enhance prospects.

Net profit reached ₹875 crore, up from ₹811 crore year-on-year, reflecting a robust PAT margin increase to 14.4%. Earnings per share (EPS) increased accordingly. Increased operational efficiency, driven by a stable raw material cost structure and a greater share of defence contracts, bolstered operating margins to 26.4%.

Operational costs demonstrated effective management, with a slight reduction relative to revenue growth. The balance sheet remains strong, and cash flow is healthy with annual accruals estimated at ₹900-1,000 crore against a capex of ₹1,200 crore.

The strategic outlook appears positive, focusing on expanding the defence segment and market presence. Investor sentiment should remain positive, supporting a **buy** insight as the company is poised to capitalize on growing demand and operational strengths amid stable economic conditions.