Amazon Great Indian Festival 2020 - Electronics
Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    
Amazon Great Indian Festival 2020 - Electronics

| More

Solar Industries - Overseas and defence key to profitability - ICICI Securities

Posted On: 2020-09-18 01:46:31

Solar Industries' (SOIL) conference call underlined the strength of the business model; growth opportunities will determine the next phase of investment thesis. Management commentary highlighted: i) Overseas operations - with the desired experience of getting into the big league of mining through presence in South Africa and Australia eventually to reap dividends and ii) defence - where SOIL's own preparedness meet with government readiness to entertain private sector, thereby, increasing probability of order inflows. ISRO opportunity will be delineated once better clarity emerges. We maintain our REDUCE rating on the stock.

- Overseas business recovery is one of the key levers for profitability going forward. While South Africa and Australia incurred significant losses of Rs645mn and Rs186mn for FY20, respectively, management reiterated that business profitability will improve going forward. Management stays prospective of US$1bn explosives market opportunity in African continent (Ghana manufacturing has started in Q1FY21 as per annual report) and US$580mn opportunity in South Africa. With expansion into Australia and South Africa, SOIL has broken into big league of mining - an experience developed over the past five years, with players like Anglo American as prospective customers. SOIL currently has 125,000te of overseas explosive capacity and produced ~100,000te in FY20.

- Apart from overseas, defence can be the next big opportunity for SOIL. SOIL is prepared, through suitable investments to capture any opportunity that come towards private sector for ammunition manufacturing. Product capability includes high energy materials, composite propellants, explosive filling for ammunitions, rocket integration, fuses, pyros and igniters etc. Management also highlighted that i) SOIL is expected to receive final orders for execution of multi-modal hand grenade orders - while not disclosing the amount of the contract. It would entail supply of 1mn pieces over two years and ii) Indian army has successfully tested Pinaka integrated and supplied by Solar Industries - this can be a big opportunity for SOIL as and when it materialises.

- Balance sheet management. Management will seek to maintain 0.5x net debt to equity. FY21 capex will be Rs2.1bn; FY22 capex, yet to be finalised based on extant opportunity, is likely to be ~Rs2.5bn. Capital allocation continues to be directed towards overseas as well as domestic operations. Packaged scheme of SGST benefits in Maharashtra will continue till FY22. Capex for Q1FY22 was Rs488mn and planned capex for FY21 is Rs2.1bn.

- Maintain REDUCE. Management expects infra and housing segments to recover in H2FY21. The business is currently being overseen by Mr. Suresh Menon (Executive Director). We value SOIL at 26x FY22E P/E.

Shares of SOLAR INDUSTRIES INDIA LTD. was last trading in BSE at Rs.1058.25 as compared to the previous close of Rs. 1070.05. The total number of shares traded during the day was 560 in over 166 trades.

The stock hit an intraday high of Rs. 1067.8 and intraday low of 1036.45. The net turnover during the day was Rs. 589521.

Source: Equity Bulls

Click here to send ur comments or to

Amazon Great Indian Festival 2020 - Mobiles

Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only., its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.

Other Headlines:

Maintain ADD on L&T Infotech - Growth progression continues - HDFC Securities

Cipla Ltd - Launch of generic Nintedanib - Angel Broking

Britannia Industries Ltd - Q2 FY21 Result Update - YES Securities

Hindustan Unilever Ltd - Q2 FY21 Result Update - YES Securities

CCL Products Ltd - Q2 FY21 Result Update - YES Securities

Specialty chemicals - Price trend in Aug-20 - ICICI Securities

Hindustan Unilever - Willingness (necessity?) to sacrifice gross margins to drive growth - ICICI Securities

Britannia Industries - In-home consumption tailwind starts to taper-off - ICICI Securities

Balkrishna Industries - Quarter ends on a strong note - ICICI Securities

Refining & marketing - Diesel cracks: Light at the end of the tunnel? - ICICI Securities

Mahindra CIE Automotive - Resilient margin performance - ICICI Securities

Kajaria Ceramics - Q2FY21 Result Update - ICICI Securities

Hindustan Unilever - Q2FY21 Result Update - ICICI Securities

Castrol India - Initiating Coverage - Compelling Valuation & Counting on Dividend Support - Reliance Research

Reliance Research - R Long Short - Mahindra & Mahindra Financial Services : Directional Long

Kajaria Ceramics - Q2FY21 First Cut - ICICI Securities

Quant Pick - Larsen & Toubro - ICICI Securities

Hindustan Unilever - Q2FY21 First Cut - ICICI Securities

Hindustan Zinc - Q2FY21 First Cut - ICICI Securities

Dhanuka Agritech - Buy back - Angel Broking

Equitas SFB IPO - Day 1 Subscription - Angel Broking

Dr. Reddy's lab relaunch of OTC product - Angel Broking

Hindustan Unilever Ltd - Q2FY21 Results - Angel Broking

Hindustan Unilever Ltd - Q2FY21 Results - YES Securities

Maintain BUY on ACC - Strong cost controls cushion earnings - HDFC Securities

Equitas Small Finance Bank (ESFB) - Subscribe - YES Securities

Granules India - Q2FY2021 results - Angel Broking

Sunteck Realty - Acquisition of 50 acres - Angel Broking

Maintain BUY on Oberoi Realty - Sharp recovery - HDFC Securities

L&T bidding for rail corridor - Angel Broking

Maintain REDUCE on L&T Technology Services - Recovery priced in - HDFC Securities

India IT Services - Thematic - Rising 5G Adoption to Industrialize Digital Services & Connectivity - Reliance Securities

L&T Technology Services - Q2FY21 Result - Angel Broking

L&T Technology Services - 'Multiple' headwinds - ICICI Securities

HDFC Life Insurance Company - Recovery well on track post Covid-19 dip - ICICI Securities

ACC - Strong execution - third time in a row - ICICI Securities

Tata Communications - Keeping faith on sales funnel for revenue growth - ICICI Securities

Hatsun Agro Products - Healthy revenues; strong margins - ICICI Securities

Amber Enterprises Ltd - Business Update Call - YES Securities

Key Takeaways from Q2FY21 earnings call of Shoppers Stop - YES Securities

CSB Bank Q2 FY21 - Not Rated - YES Securities

Britannia Industries 2QFY21 results - YES Securities

HDFC Life Insurance - Q2FY21 Results - YES Securities

ACC Ltd - Q3CY20 Results - YES Securities

IPO Review - Equitas Small Finance Bank - ICICI Securities

Rallis India - Q2FY21 First Cut - ICICI Securities

ACC Ltd - Q3CY20 First Cut - ICICI Securities

Equitas Small Finance Bank Limited - Strongly developing from a microfinance to small bank... - Geojit

Britannia Industries - Q2FY21 Results - Angel Broking

Rallis India - Q2FY21 Results - Angel Broking

Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2019