Solar Inds - Power Packed Performance on its way!

Solar Inds Ltd - CMP 873

1) Industrial explosives sector is expected to grow at 10% volume growth over the next 3 years but company expects to grow at 15% volume growth. The company plans to increase its explosives manufacturing capacity from 4.4 lakh MT currently to 7 lakh MT by 2020. We expect the company to have volume growth close to 17-18%.
2) Company now has orders of Rs.180crs in defense and deliveries has already started and expects Rs.100 crs in current year. Long term target for defense remains at INR 500crs+ by 2020.
3) Total capex of approx Rs. 900crs over next 3 years with plans to setup manufacturing capacity in Australia, Ghana and 3 other countries. Company now envisions to grow overseas sales to Rs. 1000crs+ by 2020 from current INR 350crs.
4) South Africa Division utilization by year end would be at 70% and expects Rs. 60crs revenue in current year and expects to achieve total overseas revenue of Rs. 600crs in the current year.
5) The company is bidding for 8 critical RFPs and RFQs by Government of India out of which company expects to get order for 3 products.
6) Delay in procedural issues from Government side has led to slower execution of defense products. However, North Korea tensions along with India and China standoff at Doklam has led to pick up in order enquiries. Company expects healthy traction in defense segment by Q3 FY18 onwards.
7) Promoters have increased their stake from 72.98 to 73.15 recently.
8) We expect this company to atleast double from here in the next 15-18 months.

This is not an investment advice. Readers should consult their financial advisor before making any investments. Happy & SleepEasy Investing. Disc.: Invested

Excerpts from KRChoksey Institutional Report.