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SOLARINDS - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.0
| Stock Code | SOLARINDS | Market Cap | 1,24,035 Cr. | Current Price | 13,703 ₹ | High / Low | 17,820 ₹ |
| Stock P/E | 116 | Book Value | 387 ₹ | Dividend Yield | 0.07 % | ROCE | 37.3 % |
| ROE | 29.7 % | Face Value | 2.00 ₹ | DMA 50 | 13,660 ₹ | DMA 200 | 13,362 ₹ |
| Chg in FII Hold | -0.37 % | Chg in DII Hold | 0.01 % | PAT Qtr | 329 Cr. | PAT Prev Qtr | 235 Cr. |
| RSI | 46.1 | MACD | 221 | Volume | 2,00,918 | Avg Vol 1Wk | 1,89,518 |
| Low price | 9,888 ₹ | High price | 17,820 ₹ | PEG Ratio | 2.55 | Debt to equity | 0.05 |
| 52w Index | 48.1 % | Qtr Profit Var | 61.2 % | EPS | 118 ₹ | Industry PE | 24.5 |
📊 Financial Overview
- Revenue & Profit Growth: Quarterly PAT rose from ₹235 Cr. to ₹329 Cr. (61.2% growth YoY).
- Margins: ROE at 29.7% and ROCE at 37.3% → excellent efficiency.
- Debt: Debt-to-equity ratio of 0.05 → virtually debt-free.
- Cash Flow: Strong, supported by consistent profitability.
- Return Metrics: EPS at ₹118, robust earnings power.
💹 Valuation Indicators
- P/E Ratio: 116 vs Industry PE of 24.5 → highly overvalued.
- P/B Ratio: Price ₹13,703 / Book Value ₹387 ≈ 35.4.
- PEG Ratio: 2.55 → expensive relative to growth.
- Intrinsic Value: Current valuation stretched, limited margin of safety despite strong fundamentals.
🏢 Business Model & Competitive Advantage
- Operates in explosives and defense manufacturing, with strong demand from mining and defense sectors.
- Competitive advantage lies in specialized products, global presence, and government contracts.
- Debt-free balance sheet enhances resilience.
- Challenges include valuation risk and cyclical demand in mining sector.
📈 Entry Zone Recommendation
- Technicals: RSI at 46.1 (neutral), MACD positive, price near 50DMA (13,660) and 200DMA (13,362).
- Entry Zone: Attractive accumulation near ₹13,200–13,500 for long-term investors.
- Holding Guidance: Suitable for long-term holding given strong fundamentals, but valuation risk persists.
✅ Positive
- Strong ROE (29.7%) and ROCE (37.3%).
- Debt-to-equity ratio very low (0.05).
- Quarterly PAT growth of 61.2% YoY.
⚠️ Limitation
- High P/E (116) compared to industry average (24.5).
- High P/B ratio (35.4).
- Dividend yield very low at 0.07%.
📉 Company Negative News
- FII holdings decreased (-0.37%).
- Stock corrected from ₹17,820 to ₹13,703.
📈 Company Positive News
- Quarterly PAT improved to ₹329 Cr.
- DII confidence increased slightly (+0.01%).
- MACD positive, showing bullish technical momentum.
🌐 Industry
- Explosives and defense industry benefits from infrastructure and defense spending.
- Industry PE at 24.5 indicates sector trades at lower valuations compared to SOLARINDS.
- Government contracts and global demand support long-term opportunities.
🔎 Conclusion
- SOLARINDS shows excellent fundamentals with strong profitability and debt-free balance sheet.
- Valuations are stretched, limiting near-term upside.
- Best considered for long-term investors with entry near ₹13,200–13,500; holding depends on sustained earnings growth and industry demand recovery.