Solar Industries India Ltd Q1 FY26 Earnings Analysis

- For FY '26, Solar Industries is confident of crossing INR 10,000 crores in revenue. - Over the last 20 years, revenue has grown 50x, EBITDA 55x, and profit after tax 58x. - In the last 5 years alone, revenue grew 3x+ and PAT grew 4.5x. - The company aims to double revenue from INR 10,000 crores to INR 20,000 crores within 3-4 years (by around FY '29). - Defense revenue targeted at INR 3,000 crores in FY '26, growing to ~INR 8,000 crores in 4-5 years. - International business expects 15-20% growth in FY '26, with steady expansion in multiple geographies. - The INR 15,000 crores defense order book to be executed over 4-10 years, with a large portion internationally. - Continued capacity expansion and new product development support growth trajectory.

- Revenue growth: Targeting INR10,000+ crores for FY '26; aiming to double revenues to INR20,000 crores within 3-4 years. (Page 15) - Defense business: Expecting defense revenue of INR3,000 crores in FY '26, with order book of INR15,000 crores to be executed over 4-10 years. (Pages 10, 13) - EBITDA margins: Achieved 27% in FY '25, above the guided 23%, with confidence to maintain or improve margins going forward. (Pages 6, 5) - PAT growth: Profit after tax has risen 58x over 20 years; PAT increased 4.5x in last 5 years; FY '25 PAT at INR1,288 crores, up 47% YoY. (Page 15, 5) - International business growth: 18% YoY growth; expect 15-20% growth combined in FY '26. (Page 12) - Capex: INR2,500 crores ongoing capex for expansion and new technologies, funded by internal accruals and limited debt. (Pages 5, 13) - Conservative guidance incorporating emergency procurements and geopolitical impacts. (Page 12)

- Current year (FY '26) capex plan of INR 2,500 crores focused on multiple initiatives including land acquisition, new technologies, automation, and new product development. - Capex to be funded through internal accruals and some debt. - INR 12,700 crores MoU signed with Government of Maharashtra for defense and aerospace investments over 10 years, likely to be invested earlier given Solar's growth. - Capex aims at scaling existing capabilities, upgrading technologies, expanding product portfolio including advanced ammunitions and aerospace solutions. - Investments support Solar's vision aligned with Atmanirbhar Bharat initiative. - Asset turnover and peak revenue post-capex are difficult to specify due to diverse SKUs and varying project timelines. - Expected returns from different initiatives vary from 1 to 5 years.

- For the INR 2,500 crore capex planned in the current year (FY '26), Solar Industries intends to fund it through internal accruals and a small amount of debt from bankers. - There are no plans mentioned for raising equity in the near term, as the current capex can be met from the company's cash position and internal funds. - Management emphasized prudent financial planning and expects to manage investments without requiring new equity issuance at this stage.

- Total order book stands at around INR 17,000 crores. - Out of this, INR 15,000 crores is from the defense sector. - Non-defense orders amount to approximately INR 2,000 crores. - Defense order book includes: - INR 6,084 crores from Pinaka rockets, expected to be delivered over 10 years (~INR 500-600 crores annualized). - INR 8,500 crores from international markets. - International defense orders (INR 8,500 crores) will be delivered over the next 4-5 years. - Domestic defense orders (~INR 6,500 crores excluding Pinaka) mostly small and spread over time. - Company expects to achieve defense revenue of INR 3,000 crores in FY '26. - Additional new orders and emergency procurement are anticipated, but timing and size not yet disclosed.