Shares of Solar Industries India surged over 2 percent to Rs 11,720 per share on September 25 after it received NCLT's approval for merger of Rajasthan Explosives and Chemicals with its wholly-owned subsidiary Emul Tek.
Solar Industries is engaged in manufacturing of bulk and cartridge explosives, detonators, detonating cords and components, which find its applications in mining, infrastructure and construction industries.
So far this year, the stock of this explosive maker soared over 70 percent, outpacing benchmark Nifty 50's 19 percent surge. Earlier, it had touched 52-week high of Rs 13,300 per share on July 11, 2024.
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Recently, credit ratings agency CRISIL Ratings reaffirmed its rating on long-term bank loan facilities to "AA+ or stable" as well as non-convertible debentures to "AA+ or stable." The rating continues to reflect the company’s robust position in the domestic and overseas markets in the explosives and detonators industry, sound operating efficiency and healthy financial risk profile.
CRISIL further stated that the company's liquidity is likely to remain strong, driven by cash accrual of Rs 900-1,000 crore per annum against annual capital expenditure of Rs 800 crore. Furthermore, net gearing is expected at less than 0.5 time on the back of prudent funding of capex.
In the June quarter, the company's revenue rose 0.75 percent on-year to Rs 1,719 crore and net profit increased by 45 percent YoY to Rs 286 crore.
Currently, around 4 brokerages cover Solar Industries stock, with 2 recommending a strong "buy" while 2 suggested a "hold" rating.
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