Dec 01, 2016 12:14 PM IST IST | Source: Moneycontrol.com
Hold Solar Industries; target of Rs 682: Axis Direct
Axis Direct recommended hold rating on Solar Industries with a target price of Rs 682 in its research report dated November 29, 2016.
Axis Direct's research report on Solar Industries
Solar Ind.s reported a net sales of Rs 326 Cr (↓2% YoY, ↓23% QoQ) in Q2FY17, an EBIDTA of Rs 66 Cr (↓2% YoY, ↓24.3% QoQ) and PAT after Minority Interest of Rs 36.9 Cr. (↑4% YoY, ↓21.6% QoQ); the EBITDA margins expanded by 3bps on annual basis to 20.0%. Being monsoon season, the mining activities had suffered due to incessant rains in major parts of the country. The overburden removal (which requires large quantities of explosives) by CIL had dropped by 11% in Q2FY17.
Higher spends in infrastructure creation will lead to rise in demand for cartridge explosives. Solar Inds being a large supplier of cartridge explosives would be a BIG beneficiary of the enhanced activities in infrastructure development & construction activities in the country. Overseas production facilities along with exports are also contributing to the performance of the company. The mining activities have resumed thus helping the sales of the bulk explosives. We, hence, retain HOLD on the stock with target price to Rs 682.
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