Buy Premier Explosives; target of Rs 530: Sushil Finance

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26 Aug, 2025 12:21

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Sushil Finance's report on Premier Explosives (PEL)"PEL is one of the leading companies in India, manufacturing the entire range of commercial explosives & accessories for civil requirement and is the only Indian private entity designing, developing & manufacturing solid propellants for Indian missiles viz. Akash, Astra etc. Premier has reported revenues CAGR of 10.9% over FY10-15. Explosives business reported a 7.9% CAGR,while Defence segment has reported a strong 37% CAGR during the same period, though on a small base. We expect Explosives segment to see 9% & defence segment to see 79% CAGR over FY15-17.The explosives segment is operating at ~45% capacity utlisation and hence can see strong growth without much capex if mining cycle turns around."VALUATIONS & OUTLOOK: "The business model of Premier is attaining maturity with higher contribution from defence deal and lower dependence on explosives business; hence we believe the stock is poised for a re-rating. At the CMP of Rs 307 the stock is trading at 27.3x and 18.5x its FY16E & FY17E EPS of Rs 11.2 & Rs 16.6 respectively. We have valued the stock at 32x its FY17 EPS and arrived at a target price of Rs 530, implying an upside of 73%", says Sushil Finance research report.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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