ICICI Direct has given Hold recommendation for Solar Industries India with a target price of Rs. 1190 in its research report issued on Feb 12, 2021

ICICI Direct’s research report on Solar Industries India

Solar Industries (SIL) reported a commendable performance in Q3FY21 led by strong performance in exports & overseas business and housing infra segments. Revenue for the quarter was at Rs 645.9 crore, up 15.1% YoY. Explosives volume stayed flat YoY at 86265 MT. Further, realisation also remained flat at Rs 32304 crore. Overall explosives segment posted a revenue of Rs 279 crore. Accessories segment registered an improvement of 24% YoY to Rs 92 crore. Defence segment revenue came in at Rs 22.92 crore, down 11% YoY. Defence segment revenue came in at Rs 22.92 crore, down 11% YoY. Overall contribution of sales improved in exports & housing infra segments Gross margins contracted ~84 bps YoY on account of higher input costs. EBIDTA came in at Rs 132.2 crore, up 16.7 % YoY with a margin of 20.5% vs. 20.2% YoY. PAT (post minority interest) was at Rs 78 crore in Q3FY21 vs. Rs 61.98 crore in Q3FY20.

Outlook

We value the company at 30x FY23E EPS of Rs 39.7 to arrive at a target price of Rs 1190 (earlier Rs 995). We maintain HOLD rating.

 

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