Solar Industries India Ltd - May 2025 Earnings Call Transcript Analysis

May 24, 2025 · 4 min read

Earnings Call Transcript Analysis Report #

Revenue (Consolidated):
- Q4 FY'25: INR 2,167 crores (vs. INR 1,611 crores YoY) - Highest ever quarterly sales.
- FY'25: INR 7,540 crores (vs. INR 6,070 crores YoY) - Highest ever yearly sales.
EBITDA (Consolidated):
- Q4 FY'25: INR 546 crores (vs. INR 371 crores YoY, growth of 47%) - Highest ever quarterly EBITDA.
- FY'25: INR 2,031 crores (vs. INR 1,414 crores YoY, growth of 44%) - Highest ever yearly EBITDA.
PAT (Consolidated):
- Q4 FY'25: INR 371 crores (vs. INR 243 crores YoY, growth of 42% by MD, Aanchal quotes INR 346 crores vs INR 243 crores) - Highest ever quarterly PAT.
- FY'25: INR 1,288 crores (vs. INR 875 crores YoY, growth of 47%) - Highest ever yearly PAT.
EBITDA Margin:
- FY'25: ~27% (vs. guidance of 23%+)
Dividend:
- FY'25: Proposed INR 10 per share (vs. INR 8.5 per share in FY'24).
Raw Material Cost:
- Q4 FY'25: INR 1,165 crores (vs. INR 829 crores YoY)
- FY'25: INR 3,907 crores (vs. INR 3,196 crores YoY)
Employee Cost:
- Q4 FY'25: INR 174 crores (vs. INR 119 crores YoY)
- FY'25: INR 600 crores (vs. INR 433 crores YoY)
Other Expenses:
- Q4 FY'25: INR 288 crores (vs. INR 309 crores YoY)
- FY'25: INR 1,073 crores (vs. INR 1,071 crores YoY) - Noted as “almost similar despite the huge rise in the sales.”

Growth:
- International Business: 18% YoY growth in FY'25. Revenue contribution: 36% (Q4), 38% (FY'25).
- Defense Sector: Revenue increased from INR 517 crores to INR 1,355 crores in FY'25 (162% growth). Revenue contribution: 20% (Q4), 18% (FY'25), expected to be >30% in FY'26.
Decline: Not explicitly mentioned; focus was on record performance and growth. Domestic explosives demand was “subdued” earlier but showed “significant improvement” in Q3/Q4.

Capex:
- FY'25: ~INR 1,200 crores.
- FY'26 Planned: INR 2,500 crores (funded by internal accruals and some debt).
MoU with Government of Maharashtra: INR 12,700 crore investment in defense and aerospace over the next decade.
Inauguration: State-of-the-art loitering ammunition and testing range inaugurated by Prime Minister Shri Narendra Modi.
Order Book (Defense): Over INR 15,000 crores.
- Includes INR 6,084 crores for Pinaka rockets and INR 8,500 crores from international markets.
- Total Order Book (Overall): INR 17,000 crores (INR 15,000 cr defense, INR 2,000 cr non-defense).

Products: Expanding loitering ammunition ranges, advanced ammunitions, aerospace solutions. Specific mentions:
- Nagastra 1 (supplied, expecting repeat orders).
- Nagastra 2 & 3 (developed, expecting orders in coming year).
- Bhargavastra (trials successful, product expected to be ready in the calendar year).
Markets (International Expansion/Progress):
- Kazakhstan: Plant almost finished, operations to start in 3-4 months.
- Saudi Arabia: In process of setting up facilities.
- Thailand & Indonesia: Operationalized.
- Tanzania, Ghana, Nigeria: Expanding.
- Zimbabwe: Plant in commissioning stage.
- All international subsidiaries reported profitable in FY'25.

Focus on scaling existing capabilities, upgrading technologies, and expanding product portfolio through capex.
Turnaround of all international subsidiaries to profitability.

Pinaka Rockets: Landmark order of INR 6,084 crores to be delivered over next 10 years (annualized INR 500-600 crores).
Energetic Materials Orders (International): For a period of 4 to 5 years.

Strong demand in the defense sector driven by geopolitical situations (Russia-Ukraine, Israel, India-Pakistan).
Emphasis on “Atmanirbhar Bharat” (Self-reliant India) initiative.
Emergency procurement by the government is an opportunity.
Increased defense spending globally and by India.

Positioned as a “strong player in defense in the global market.”
Solar is “one of the few companies which is part of the global supply chain” for defense products, having invested consistently in capacity and product development.
Distinguishes itself from peers: “We are a different company than others.”

←

→