Feb 17, 2017 10:49 AM IST | Source: Moneycontrol.com

Buy Solar Industries India; target of Rs 840: KR Choksey

KR Choksey is bullish on Solar Industries India has recommended buy rating on the stock with a target price of Rs 840 in its research report dated February 15, 2017.

Buy Solar Industries India; target of Rs 840: KR Choksey

KR Choksey's research report on Solar Industries India

In Q3FY17, SIIL’s top-line stood at INR 4,659 Mn which translated into a growth of 12.8% Y-O-Y and 32.8% Q-O-Q on account of stellar volume growth of domestic explosives. Cartridge explosives volume grew by 26.2% Y-O-Y and 49% Q-O-Q coupled with bulk explosives growing by 11.2% Y-O-Y and 44% Q-O-Q.

Outlook

SIIL over the last two years (FY15, FY16) has traded at an average forward PE of 26x. Given the strengthening domestic business and foray into the defense segment, we value the company at 30X FY19E earnings of INR 28 and maintain our “BUY” recommendation arriving at a target price of INR 840. At CMP of INR 722, SIIL trades at 34.4x FY17E EPS of INR 21, 29.7x FY18E EPS of INR 24.3 and 25.6x FY19E EPS of INR 28.

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