01 — At a Glance
The Explosives Company That’s Becoming a Defence Powerhouse (And It Shows)
- 52-Week High / Low₹17,820 / ₹9,445
- TTM Revenue₹8,952 Cr
- TTM PAT₹1,452 Cr
- Full-Year EPS (TTM)₹160
- Q3 EPS (Annualised)₹197
- Book Value₹565
- Price to Book26.8x
- Dividend Yield0.07%
- Debt / Equity0.17x
- Defence Order Book₹18,000 Cr
Market Reality Check: Solar Industries just posted its strongest quarter ever — ₹2,548 crore revenue (+29% YoY), ₹467 crore PAT (+38% YoY), and raw material consumption dropped 480 basis points. Defence revenue alone soared 72% YoY to ₹702 crore. Meanwhile, the stock has delivered 59.7% returns over 12 months and is trading at 26.8x book value. The valuation is not for the faint of heart. The growth, however, is very real.
02 — Introduction
When a Mining Explosives Company Becomes Defence’s New Darling
Let’s talk about Solar Industries. Three years ago, this was a mid-cap explosives company with a solid business supplying bulk explosives to Coal India and a few mining operations. Revenue growth was pedestrian. Margins were stable. Life was boring.
Then the government decided it wanted Atmanirbhar Bharat, indigenous defence manufacturing became the patriotic thing, and suddenly, Solar Industries found itself with ₹21,000 crore in order books — of which ₹18,000 crore is defence. The transformation has been fast enough to make Wall Street jealous and explosive enough (pun absolutely intended) that even desi investors are paying 94.4x P/E for it.
In Q3 FY26 alone, the company reported revenue of ₹2,548 crore (+29% YoY), EBITDA of ₹733 crore (+37% YoY), and PAT of ₹467 crore (+38% YoY). Defence revenue was ₹702 crore, up 72% YoY. Raw material costs fell as a percentage of sales because the mix shifted toward higher-margin defence products. A facility in Nagpur — built for ₹12,700 crore capex — is now manufacturing medium-calibre ammunition under the Defence Minister’s blessing. And the flagship Pinaka rocket program (₹6,084 crore order) is about to start shipments in Q4.
The stock has ignored the P/E valuation and gone up 60% in one year anyway. Because apparently, growth at 38% outweighs arithmetic at 94x. Let’s dig into what’s real and what’s hype.
Concall Highlight (Feb 2026): “If you combine mining and defence together, definitely growing at +20% CAGR is not at all difficult for next 3-5 years.” — Management. Translation: we’re riding two exponential curves, and our execution risk is getting smaller every quarter.
03 — Business Model: WTF Do They Even Do?
They Make Stuff Go Boom. For Mining. For Mining Infrastructure. For Defence Rockets. For Everything.
Solar Industries operates in three worlds. First: industrial explosives. They sell bulk explosives (emulsion-based, packaged, detonators, primers) to Coal India, Singareni, and private mining companies. This segment was 91% of revenue in FY22. Now it’s 72% of FY25 revenue. Still the cash cow, but shrinking as a percentage because the other two segments are growing faster.
Second: international mining explosives. The company operates facilities in 8 countries (India, Zambia, Ghana, Nigeria, Turkey, South Africa, Tanzania, Indonesia) and exports explosives for gold, copper, and industrial metal mining globally. In Q3, international business crossed ₹1,000 crore for the first time (+35% YoY). Management attributes this to the commodity upcycle and increased demand for gold/copper globally.
Third: defence products. This is the new sexy segment. Pinaka multi-barrel rocket launchers (₹6,084 crore order, 7-10 year program). 155mm artillery shells (commercial production targets Q4 FY26). 23mm and 30mm medium-calibre ammunition (trials in progress, Army contracts expected in FY27). Loitering munitions (Nagastra-I under production). UAVs (MALE drones under development). RDX, TNT, HMX manufacture for propellants. Warheads. The whole death-and-destruction toolkit, basically.
The Nagpur facility sprawls across 1,080 acres with a dedicated UAV testing runway and loitering munition test range. It’s like a defence tech park that also makes actual weapons. India’s first private defence integrated facility of this scale.
Mining Exp.59%of 9M FY26
Defence24%of 9M FY26
Infra & Housing11%of 9M FY26
Exports41%of 9M FY26
Manufacturing Footprint: 39 facilities across 8 countries. Vertical integration means the company manufactures detonators, PETN, TNT, RDX, emulsifiers, and sodium nitrate in-house. This explains why raw material costs dropped to 48.71% of revenue in Q3 from 53.5% a year ago — they control more of the supply chain.
💬 If defence exports are already ₹11,000 crore of the ₹18,000 crore defence order book, why isn’t management more vocal about international defence market opportunity? Is it geopolitics, or just humility?
04 — Financials Overview
Q3 FY26: The Most Explosive Numbers Yet
Result type: Quarterly Results | Q3 FY26 EPS: ₹49.31 | Annualised EPS (Q3×4): ₹197.24 | TTM EPS: ₹160
| Metric (₹ Cr) |
Q3 FY26
Dec 2025 |
Q3 FY25
Dec 2024 |
Q2 FY26
Sep 2025 |
YoY % |
QoQ % |
| Revenue | 2,548 | 1,973 | 2,082 | +29.2% | +22.3% |
| Operating Profit (EBITDA) | 733 | 535 | 552 | +37.0% | +32.8% |
| EBITDA Margin % | 28.8% | 27.1% | 26.5% | +170 bps | +230 bps |
| PAT | 467 | 338 | 361 | +38.2% | +29.4% |
| EPS (₹) | 49.31 | 34.80 | 38.12 | +41.7% | +29.3% |
The Numbers Speak: Q3 was literally the best quarter in company history. Revenue up 29% YoY, EBITDA up 37%, PAT up 38%, and EPS up 42%. The EBITDA margin expanded 170 basis points because of two things: (1) Shift toward higher-margin defence products (defence revenue jumped 72% YoY to ₹702 crore), and (2) Operating leverage as capex starts commissioning. Raw material costs fell to 48.71% of revenue from 53.5% YoY — a saving of 480 basis points — thanks to in-house manufacturing and better sourcing. Management guides 27-28% EBITDA margins going forward, which implies the margin expansion is structural, not temporary.
05 — Valuation: The Expensive Rocketship
What Fair Value Actually Looks Like When You’re Growing at 40%
Join 10,000+ investors who read this every week.
