SOLARINDS - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 4.5

📊 Core Financial Analysis

Profitability & Returns

EPS: ₹134 — excellent earnings for a ₹14,471 stock.

ROE: 32.6% & ROCE: 38.1% — exceptional return metrics, indicating superior capital efficiency.

PAT Qtr: ₹322 Cr vs ₹315 Cr — consistent profitability with YoY growth of 37.1%, showing strong momentum.

Debt & Leverage

Debt-to-Equity: 0.22 — low leverage, very healthy for a manufacturing business.

Dividend Yield: 0.07% — minimal, but reflects reinvestment into high-growth operations.

Book Value: ₹485 — trading at ~29.8x book, justified only by premium growth and high ROE.

💰 Valuation Metrics

Metric Value Insight

P/E Ratio 104 Extremely overvalued vs industry PE of 23.1

P/B Ratio ~29.8 Very high, but supported by elite return metrics

PEG Ratio 2.51 Indicates overvaluation relative to growth, though growth is strong

Intrinsic Value ~₹10,500–₹12,000 Current price is above fair value, suggesting limited near-term upside

🏢 Business Model & Competitive Edge

Solar Industries India Ltd. is a global leader in

Industrial explosives

Defense ammunition

Propellants and specialized chemicals

Competitive advantages

Defense sector exposure with long-term contracts

Global footprint across 50+ countries

Strong R&D and backward integration

Business is non-cyclical, with high entry barriers and government backing.

📉 Technical & Sentiment Indicators

RSI: 24.3 — deeply oversold, potential for technical rebound.

MACD: -496 — strong bearish momentum.

Volume above average — indicates active interest, possibly panic selling or accumulation.

DMA 50 & 200 above current price — short-term weakness, long-term trend intact.

FII buying, DII selling — mixed institutional sentiment.

🧠 Investment Guidance

🔍 Entry Zone (If Undervalued)

Ideal Buy Range: ₹12,000–₹13,000

RSI suggests oversold conditions.

Valuation still rich, but justified by elite fundamentals.

📈 Long-Term Holding View

Strong Buy & Hold for long-term investors

World-class ROE/ROCE and consistent earnings.

Strategic defense exposure and global scale.

Valuation is high, but quality justifies premium.

Would you like a breakdown of Solar Industries’ defense order book or a comparison with peers like Bharat Dynamics or Premier Explosives to assess strategic positioning?

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