ICICI Direct recommended hold rating on Solar Industries India with a target price of Rs 1075 in its research report dated May 13, 2019.
ICICI Direct's research report on Solar Industries India
Solar Industries (SIL) reported steady Q4FY19 numbers. Revenue was at Rs 672.9 crore, up 17.0% YoY led by industrial explosive and defence segment. In Q4FY19, the industrial explosives space recorded robust volume growth of 9.6% YoY while realisation increased 5.4% YoY. Overall, industrial explosives segment for the quarter grew 15.5% YoY. EBITDA came in Rs 142.3 crore, up 20.4% YoY aided by a decline in other expenses. However, margins were slightly impacted by ~140 bps increase in input costs. Accordingly, PAT grew only 8.6% YoY to Rs 71.6 crore.
Overall, SIL is expected to post healthy revenue, EBITDA and PAT CAGR of 14.3%, 16.8% and 14.0%, respectively, in FY19-21E. We value the company at 28x FY21E EPS of Rs 38.4 to arrive at a target price of Rs 1075. We maintain HOLD rating on the company.
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