Buy Solar Industries; target of Rs 17200: ICICI Securities

ICICI Securities's research report on Solar Industries

Solar Industries India Limited (SOIL)’s Q2FY26 EBITDA of INR 5.5bn rose 24%/3% YoY/QoQ; though, slightly lower than consensus estimate of INR 5.7bn. SOIL’s defence revenue crossed the INR 5bn mark for the first time and management sounds confident of achieving its INR 30bn revenue guidance for FY26 (H2 to be stronger as Pinaka deliveries begin). Order book (OB) improved to INR 171bn, including defence’s OB of >INR 155bn (export OB of >INR 80bn). Management maintains its revenue (INR 100bn) and EBITDA margin (26% or above) guidance for FY26, while some capex may be deferred to next year. However, overall capex of INR 125bn over the next five years remains intact, as SOIL is working on multiple defence projects. We maintain BUY and our target price of INR 17,200, based on 55x FY28E EPS.

Outlook

We maintain our BUY rating as well as target price of INR 17,200 (55x FY28E EPS).