Solar Industries India Limited — Q1 FY26 earnings call

Call held 8 Aug 2025

Management summary

Solar Industries delivered a strong start to FY26 with record EBITDA and PAT driven by international (43% growth) and defense (115% growth) segments. Domestic explosives were subdued due to milder heatwaves and early monsoon impacting coal mining. Management reiterated INR 10,000 crores FY26 revenue target with INR 3,000 crores from defense. Pinaka commercial sales expected from end of Q2/start of Q3. Currency and hyperinflation impacts reduced margins by ~1.5%.

Highlights

  • Highest ever quarterly EBITDA of INR 564 crores and PAT of INR 353 crores

  • Revenue at INR 2,154 crores, up 28% YoY

  • International business recorded highest quarterly sales of INR 826 crores, up 43% YoY

  • Defense revenue at INR 418 crores, up 115% YoY; order book ~INR 15,000 crores

  • Successful testing of Bhargavastra and Rudrastra in the quarter

  • South Africa turning around strongly driving international outperformance

  • Kazakhstan plant expected to start by October 2025

  • Net cash positive position of INR 50 crores

Key financials

  1. Revenue ₹2,154 Cr +28%YoY
  2. EBITDA ₹564 Cr +19%YoY
  3. PAT ₹353 Cr +17%YoY
  4. EBITDA Margin 26.2%
  5. International Revenue ₹826 Cr +43%YoY
  6. Defense Revenue ₹418 Cr +115%YoY
  7. Defense Order Book ₹15,000 Cr

What they filed

Q1 FY27: revenue up 70.3%, net profit up 88.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,716 1,973 2,167 2,154 2,082 +21%2,548 +29%3,053 +41%3,668 +70%
EBITDA445 527 537 535 552 +24%708 +34%826 +54%1,015 +90%
Net profit304 338 346 353 361 +19%467 +38%556 +61%666 +89%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Revenue Mix
    ₹238 Cr CIL₹348 Cr Non-CIL Institutional₹312 Cr Housing & Infra₹826 Cr International₹418 Cr Defense

Guidance & targets

Revenue

  • FY26 Total Revenue Revenue · FY26 · High confidence INR 10,000 crores
    we are still believing that we will definitely cross INR10,000 crores in this financial year

    — Manish Nuwal

Defense

  • FY26 Defense Revenue Defense · FY26 · High confidence INR 3,000 crores
    INR3,000 crores should be some defense and nondefense should add to around INR7,000 crores

    — Manish Nuwal

International

  • FY26 International Revenue International · FY26 · Medium confidence INR 3,500-4,000 crores
    we are expecting around INR4,000 crores from international market, INR3,500 crores to INR4,000 crores

    — Manish Nuwal

Margins

  • EBITDA Margin Margins · FY26 · Medium confidence ~27%
    achieving around 27% is also a big achievement as far as the overall positioning is concerned

    — Manish Nuwal

Risks & concerns

  • Domestic explosives demand impacted by weather - milder heatwaves and early monsoon

    medium

    Lower coal mining demand affected CIL and HNI segments; expects recovery post-monsoon

    Management acknowledged

  • Rising competition in loitering munitions and drone segment

    medium

    Multiple new players entering; management confident based on track record of qualification and lowest bidding

    Analyst downplayed

  • Currency fluctuations and hyperinflation in Turkey impacting margins by ~1.5%

    low

    INR 18 crores hyperinflation P&L impact plus additional forex losses; inherent in multi-country operations

    Management acknowledged

Areas of evasion (4)

  • Drone opportunity sizing
  • Country-wise revenue details
  • Volume data discontinued
  • Higher-range drone timelines

Q&A highlights

2 direct
Bhargavastra/Rudrastra Commercialization Timeline Partial
a couple of quarters where we will reach to the final qualification. And once we are through with that, we can expect the commercialization

Counter-drone and loitering munition products represent significant new revenue streams once qualified

Asked by Amit Dixit

South Africa Turnaround Driving International Growth Direct
South Africa is doing much better now compared to the couple of years back... we were eagerly waiting for this kind of performance

South Africa turnaround is the key driver of record international revenue, validating the multi-year investment thesis

Asked by Amit Dixit

FY26 Revenue Guidance Reaffirmation Direct
we are still believing that we will definitely cross INR10,000 crores... INR3,000 crores will be defense... Pinaka series should start from end of Q2 or start of Q3

Confirms ambitious FY26 targets with Pinaka as the key defense catalyst for H2

Asked by Ankur

1 min read 5 chapters

Detailed narrative

Record Quarter Led by International and Defense

Solar Industries achieved highest ever quarterly EBITDA of INR 564 crores and PAT of INR 353 crores on revenue of INR 2,154 crores (28% YoY growth). International business hit INR 826 crores (43% growth) driven by South Africa turnaround. Defense reached INR 418 crores (115% growth). Domestic explosive demand was weak due to weather impacts.

Defense Pipeline and Product Development

Defense order book stands at INR 15,000 crores including INR 6,000 crores+ Pinaka and INR 8,000 crores international. Bhargavastra and Rudrastra successfully tested. Nagastra 2 and 3 under development. 155mm shell commercial production expected in coming quarters. Pinaka commercial sales to begin end-Q2/Q3 FY26.

International Expansion

International revenue at record INR 826 crores with facilities in 9 countries and distribution across 90. South Africa performing exceptionally well after multi-year turnaround. Kazakhstan plant expected by October 2025. Saudi Arabia entry also planned. Company targets INR 3,500-4,000 crores from international for FY26.

Margin Analysis

Q1 EBITDA margin at ~26.2% vs ~27% guidance due to ~1.5% adverse impact from currency fluctuations and Turkey hyperinflation. Staff costs up 0.7% as company invests in defense capabilities. Management targets 27% for full year as defense scale-up improves mix. Net cash positive at INR 50 crores.

Capex and Growth Strategy

INR 2,500 crores capex planned for FY26 following INR 1,200 crores in FY25. INR 12,700 crores MoU with Maharashtra for defense/aerospace over 10 years. Strategic entry into higher-altitude longer-endurance drone category. Focus on becoming global ammunition supply chain partner.

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