Q3FY21 Result Update - Solar Industries India - ICICI Direct

Solar Industries (SIL) reported a commendable performance in Q3FY21 led by strong performance in exports & overseas business and housing infra segments. Revenue for the quarter was at Rs. 645.9 crore, up 15.1% YoY. Explosives volume stayed flat YoY at 86265 MT. Further, realisation also remained flat at Rs. 32304 crore. Overall explosives segment posted a revenue of Rs. 279 crore. Accessories segment registered an improvement of 24% YoY to Rs. 92 crore. Defence segment revenue came in at Rs. 22.92 crore, down 11% YoY. Defence segment revenue came in at Rs. 22.92 crore, down 11% YoY. Overall contribution of sales improved in exports & housing infra segments Gross margins contracted ~84 bps YoY on account of higher input costs. EBIDTA came in at Rs. 132.2 crore, up 16.7 % YoY with a margin of 20.5% vs. 20.2% YoY. PAT (post minority interest) was at Rs. 78 crore in Q3FY21 vs. Rs. 61.98 crore in Q3FY20.

Valuation & Outlook

A formidable recovery in Q3 coupled with better demand from user industries is expected to bode well for SIL in the medium term. However, valuations are still on the higher side. We build in revenue, EBIDTA & PAT CAGR of 13.1%, 16.4% & 10.3%, respectively, for FY20-23E. We value the company at 30x FY23E EPS of Rs. 39.7 to arrive at a target price of Rs. 1190 (earlier Rs. 995). We maintain HOLD rating.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_SolarInds_Q3FY21.pdf

Shares of SOLAR INDUSTRIES INDIA LTD. was last trading in BSE at Rs.1243.2 as compared to the previous close of Rs. 1243.9. The total number of shares traded during the day was 252 in over 37 trades.

The stock hit an intraday high of Rs. 1260 and intraday low of 1235.8. The net turnover during the day was Rs. 314839.

Source : Equity Bulls

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