SynopsisMotilal Oswal has initiated coverage on Solar Industries with a Buy rating and a target price of Rs 23,000, citing strong growth prospects across explosives and defence. The brokerage expects revenue and profit to grow at 43% and 34% CAGR, respectively, through FY30.

comMotilal Oswal sees multiple growth levers supporting Solar Industries’ next phase of expansion. Domestic brokerage firm Motilal Oswal has initiated coverage on Solar Industries with a Buy rating and a target price of Rs 23,000 (24% upside), citing multiple growth levers in the years ahead.

In today's session, the stock rose 3% to its day's high of Rs 19,775 apiece. Motilal Oswal expects Solar Industries India (SOIL) to deliver a 43% CAGR in consolidated revenue and 34% CAGR in PAT over FY26-30.

The brokerage expects growth in the industrial explosives segment to settle at mid-teens after FY28, while the defence segment is expected to sustain a higher growth rate. 1.

“The company enjoys a strong wallet share of 20-23% with Coal India and is also gaining wallet share with private miners. Solar has already established a growing international footprint through exports and overseas manufacturing operations.

It recently acquired South Africa-based Omnia to further enhance its positioning in several international markets,” analysts said in a note. 2.

Adding new revenue streams - Solar Industries has significantly expanded its defence product portfolio beyond its traditional offerings of HMX, TMT and RDX. The company has diversified into warheads and rockets, including the Pinaka system, and is now entering the drones and UAV segment with products such as Nagastra, for which it has already received orders, and Rudrastra.

SOIL is also conducting test trials of its counter-drone product, Bhargavastra. 3.

Likely order inflow in defence - Motilal expects the defence segment to benefit from multiple growth drivers, including additional Pinaka regiments, guided Pinaka, replenishment rockets and export demand; future variants such as Nagastra-2 and Nagastra-3; potential Bhargavastra orders following successful trials; domestic and export orders for 155mm ammunition; and the development of a 125kg air bomb for NATO and Russian aircraft. The company also plans to enter the proximity fuze segment and expand into high-performance UAVs, UAS and C-UAS for surveillance and defence against aerial threats.