Solar Industries India Limited

Basic Materials — Specialty Chemicals · NSE

₹20,011.00+₹145.00 (+0.73%)

DalalBaazaar Score

71 / 100

🟢 Good

Verdict

NEUTRAL

Risk

Low

Driven by negative free cash flow, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: Strong business and financial position, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:03 pm

Understanding the Business

Company site ↗

The 60-second version of Solar Industries India Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Solar Industries India Limited, together with its subsidiaries, manufactures and sells industrial explosives, explosive initiating devices, and high energy materials for mining and defense applications in India and internationally.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees2,351

Annual revenue₹9,612 Cr

How does it make money?

Turns over ₹9,612 Cr a year. Of every ₹100 of sales, about ₹17 reaches shareholders as profit, with ₹29 left at the operating level before interest, tax and depreciation. Each of its 2,351 employees supports ₹4.09 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹4.09 Cr

Who are its competitors?

The closest listed comparisons in its industry are ASIAN PAINTS LIMITED, PIDILITE INDUSTRIES LTD, SRF LTD, UPL LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 29.5%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 26.7% against a peer median of 22.3% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

Peer median ROE22.3%

What is the outlook?

14 analysts covering the stock expect revenue to grow about 23.2% and earnings to grow about 24.3% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+23.2%

Est. earnings growth+24.3%

Analysts14

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +42% while net margin moved +56% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+42%

Margin effect+56%

DalalBaazaar Score

71/ 100

Good

Weighted across six categories. Every point is explained below.

✗ P/E of 90.9x is demanding — it needs sustained high growth to justify
• P/E is close to its own historical median of 107.9x
✗ P/B of 28.85x is a steep premium to book

Quality vs. Valuation

Company Quality

79/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

32/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

A good business, but the price already reflects that. The quality is real; the question is whether you are overpaying for it today.

Historical Valuation

Current P/E

90.9x

3Y Median

107.9x

40 monthly readings · mean 109.5x · range 57.6x–190.5x

Sector Median

40.4x

median of 4 sector peers

🟢Current valuation is approximately 16% below its 3y median of 107.9x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

⚠️Against its sector it trades 125% above the peer median of 40.4x.

vs. its own history

Fair

107.9x median over 40 months · -16%

vs. sector peers

Expensive

40.4x median of 4 peers · +125%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

66.3x

PEG

2.99

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 20.3% to 28.6% over 3 years.
High return on capital employed
ROCE of 29.5% is the mark of a business that converts capital into profit efficiently.
Very low debt
Debt/Equity of 0.23x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 35.0% to 29.5% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 51% over 3 years, from ₹1,195 Cr to ₹1,809 Cr.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Receivables growing faster than salesFinancial
Receivables up 125% against revenue up 42% — sales are being booked faster than they are collected.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹1,118 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 29.5% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 20.3% to 28.6%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 125% against revenue up 42%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 125% above the peer median. That premium needs a reason that persists, or it closes.
Several serious flags at once
3 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 9% a year✓ 12.4% CAGR
Latest reported year was 70.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 27%✓ 28.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹1,118 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.7x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 27%✓ 29.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 12 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

7 good · 1 neutral · 3 weak

Market Cap

₹1.81 L Cr

Large Cap

Large, widely-covered business — typically the steadiest of the bands

P/E (Trailing)

90.9x

Expensive

Expensive — verify against sector peers

P/B Ratio

28.85x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹220.06

Profitable

Profitable on a per-share basis

ROE

26.7%

Strong

Strong capital efficiency

ROCE

29.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.23x

Low

Conservative leverage

Revenue Growth (YoY)

70.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

92.7%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.05%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹1,118 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

57.2x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

25.5%

Good

Healthy core-business profitability

Net Margin

17.5%

Good

Strong bottom-line conversion

Current Ratio

2.06

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.30

Defensive

Steadier than the market

52W Range Position

76%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

19678.2 / 19997.7

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

52.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹6,770 Cr	₹5,909 Cr	₹7,360 Cr	₹9,612 Cr	+12.4%
EBITDA	₹1,371 Cr	₹1,434 Cr	₹2,017 Cr	₹2,753 Cr	+26.1%
EBITDA Margin	20.3%	24.3%	27.4%	28.6%	—
PAT (Net Profit)	₹757 Cr	₹836 Cr	₹1,209 Cr	₹1,678 Cr	+30.4%
EPS	₹83.68	₹92.38	₹133.65	₹185.39	+30.4%
ROE	29.0%	25.3%	27.4%	26.7%	—
ROCE	35.0%	30.0%	30.0%	29.5%	—
Total Debt	₹1,195 Cr	₹1,368 Cr	₹1,370 Cr	₹1,809 Cr	+14.8%
Free Cash Flow	₹177 Cr	₹846 Cr	₹1,462 Cr	-₹1,118 Cr	—

🟢 Revenue has grown at 12.4% a year over 3 years.

🟢 EBITDA has grown at 26.1% a year over 3 years.

🟢 EBITDA Margin has risen from 20.3% to 28.6% over 3 years (+8.4 pts).

🟢 PAT (Net Profit) has grown at 30.4% a year over 3 years.

🟢 EPS has grown at 30.4% a year over 3 years.

🔴 ROE has fallen from 29.0% to 26.7% over 3 years (-2.3 pts).

🔴 ROCE has fallen from 35.0% to 29.5% over 3 years (-5.5 pts).

🔴 Total Debt has grown at 14.8% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹177 Cr to -₹1,118 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹10,919 Cr

Total Liabilities

₹4,370 Cr

Cash & Equivalents

₹469 Cr

Operating Cash Flow

₹621 Cr

Capex

-₹1,739 Cr

Shareholding (proxy)

Institutional Holding

45.2%

Insider Holding

43.9%

Corporate Actions

Next Earnings

20 Nov 2026

Dividend Rate

₹11

Ex-Dividend Date

28 Jul 2026

Analyst Consensus

Recommendations

12 Buy · 3 Hold · 1 Sell

Target Price (Mean)

₹22,436.69

+12.1% vs CMP

Target Range

₹11,200 – ₹28,160

Peer Comparison

Company	P/E	ROE
ASIAN PAINTS LIMITED	46.9x	22.3%
PIDILITE INDUSTRIES LTD	57.8x	24.4%
SRF LTD	33.8x	15.4%
UPL LIMITED	21.5x	6.1%

Recent News

2 mixed4 general

Solar Industries India Share Price up today: price action

Univest, 12 Oct

Solar Industries shares gain 3% as company issues update on expansion

Business Today, 30 SeptCapacity

🟡Mixed / dependsCapacity additions can raise revenue over two to three years, but the capital spend usually pressures free cash flow first. Worth checking whether the capex is funded from operations or from borrowing.

Solar Industries India Limited Just Beat Revenue By 26%: Here's What Analysts Think Will Happen Next

Simply Wall Street, 16 AugAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Solar Industries India proposes purchase of Sivasakthi Industrial Explosives

Kalkine India, 16 Oct

Solar Industries arm to buy Sivasakthi Industrial Explosives for Rs115 crore

The Times of India, 16 Oct

Stocks to Watch Today: Tech Mahindra, IIFL Finance, Persistent, Angel One, Lotus Developers, Solar...

Moneycontrol.com, 16 Oct

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth · Profitability · Risk

WeakValuation

Points for each in the Score ↑

Good business, demanding price

The quality is real and the price already reflects it. Buying here is a bet that the business keeps compounding for long enough to grow into the multiple — which good businesses often do, but it removes the margin for error that a lower price would have given you. 3 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑