SOLARINDS - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.3

📊 Core Financials Overview

Profitability

ROE: 29.7% and ROCE: 37.3% are exceptional, indicating highly efficient capital deployment.

EPS of ₹98.2 supports strong earnings, with PAT rising from ₹227 Cr to ₹280 Cr QoQ—a 43.9% jump.

Operating margins are robust, with gross profit margins reported near 48% and net margins around 16%

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Balance Sheet Health

Debt-to-equity ratio: 0.07 — extremely low, signaling conservative financial management.

Dividend yield of 0.07% is minimal, suggesting a reinvestment-focused growth strategy.

Book Value: ₹339 vs Current Price: ₹14,617 → P/B ratio ~43.1, reflecting premium pricing.

📉 Valuation Metrics

Metric Value Insight

P/E Ratio 149 Extremely overvalued vs industry PE of 24.8

P/B Ratio ~43.1 Premium valuation

PEG Ratio 3.28 Indicates stretched valuation

Intrinsic Value ~₹11,500–₹12,500 Estimated below current price

Solar Industries appears significantly overvalued, despite its stellar financial performance.

💣 Business Model & Competitive Edge

Sector: Solar Industries India Ltd is a global leader in industrial explosives, defense products, and initiating systems.

Strengths

Dominant market share in bulk explosives and defense-grade materials

Expanding into high-margin defense products like drones, warheads, and missiles

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Strong export footprint and government contracts

Challenges

Valuation multiples are extremely high

Slight decline in DII holding (−0.51%) may reflect caution

The company’s vertical integration and defense diversification offer long-term growth potential, but current pricing demands flawless execution.

📌 Entry Zone Recommendation

Suggested Entry Range: ₹12,500–₹13,200

Below 200 DMA (₹13,213) and closer to intrinsic value

RSI at 53.6 suggests neutral momentum

MACD negative, indicating short-term weakness

🧭 Long-Term Holding Guidance

Hold if Already Invested: Strong fundamentals and sector tailwinds support long-term compounding.

Wait for Better Entry if New Investor: Valuation is stretched; a correction would offer better risk-reward.

Watchlist Triggers

EPS growth and margin expansion

Defense order wins and export growth

Institutional accumulation trends

Solar Industries is a high-quality compounder with strategic relevance, but patience will be key for new entrants. You can explore deeper insights on StockInvest’s financial dashboard or Simply Wall St’s valuation analysis.

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stockinvest.us

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simplywall.st

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