Morgan Stanley has retained its ‘Overweight’ rating on Solar Industries with a price target of ₹20,270, implying virtually no upside from Thursday’s closing price of ₹20,325.
The brokerage said the company delivered an earnings beat, with revenue, EBITDA and adjusted PAT growing 70%, 88% and 93%, respectively.
Revenue growth exceeded expectations across all key segments. Defence revenue grew 123%, versus Morgan Stanley’s estimate of 70%, while international explosives grew 65% against an estimated 35% and domestic explosives grew 52% versus an estimated 19%.
Gross margin expanded 110 basis points to 49.2%, while EBITDA margin increased 265 basis points to 27.5%. Morgan Stanley attributed the margin improvement to a favourable defence mix, stronger profitability in international explosives and inventory gains.
The company’s order book stood at around ₹21,350 crore, including more than ₹18,000 crore from the defence business.
For FY27, Morgan Stanley expects revenue of around ₹14,000 crore, with planned capital expenditure of ₹2,050 crore. The company has already spent around ₹450 crore in capex during Q1.
In contrast, Kotak Institutional Equities has retained its ‘Sell’ rating on Solar Industries, with a price target of ₹11,200. This implies a downside of around 45% from Thursday’s close.
Kotak acknowledged the strong Q1 performance, with PAT beating its estimate by 18%, driven by better execution and profitability.
Revenue rose 70% YoY to around ₹3,670 crore, led by strong growth in defence, international explosives and domestic explosives. EBITDA margin expanded around 170 basis points YoY to 27.9%, according to the brokerage.
While the ₹21,400-crore order book provides strong medium-term visibility, particularly for the defence business, Kotak has raised its FY27-29 EPS estimates by 2-6% to factor in stronger execution during the quarter.
Solar Ind Q1 performance
Solar Industries reported a 92.7% YoY jump in net profit to ₹652.6 crore from ₹338.7 crore. Revenue increased 71.2% to ₹3,688.2 crore, while EBITDA surged 93.6% to ₹1,035.2 crore.
EBITDA margin expanded to 28.1% from 24.8% in the year-ago quarter.
The company has set a ₹14,000-crore revenue target for FY27.
Manish Nuwal, Managing Director and CEO, said the company delivered its highest-ever quarterly revenue, EBITDA, PBT and PAT in Q1FY27.
Nuwal said the company remains on track to achieve its ₹14,000-crore FY27 revenue guidance, supported by an order book of more than ₹21,350 crore. The company plans to invest ₹2,050 crore in capex during the year, with ₹450 crore already deployed in Q1.
Solar Industries India shares ended 8.52% higher at ₹20,325 on Thursday and have gained more than 67% so far in 2026.
