Solar Industries - Q4FY21 First Cut - ICICI Direct

(CMP: Rs. 1336; MCap: Rs. 12086 crore)

Solar Industries registered handsome numbers for the exit quarter owing to favourable macros. Topline jumped 45% led by all-round performance from Coal, Housing & Infra and Exports segments. Further, positive operating leverage kept margins buoyant. With the strong performance in Q4, Solar has posted a growth of 12% on FY20 base overcoming a difficult year with ease. The company has also announced a divided of Rs. 6 per share during the quarter.

Q4FY21 Earnings Summary

- Revenue for the quarter came in at Rs. 791.39 crore, up 45% YoY & 22.5% QoQ

- Explosives volume rose 13% whereas realisations jumped 25%, as a result, overall explosives segment revenue leaped 42% YoY to Rs. 418 crore

- Accessories segment registered an improvement of 52% YoY to Rs. 111 crore

- Defence segment revenue came in at Rs. 19.54 crore, down 26% YoY. The segment struggled as there were some disruptions with respect to new order processing and execution of existing ones owing to Covid-19

- Gross margins contracted ~ 105 bps YoY & 73 bps QoQ on account of higher input costs. Nonetheless, positive operating leverage aided EBIDTA margins which came in at 20.8% vs 16.4% YoY & 20.5% QoQ. Solar posted an EBIDTA of Rs. 164.6 crore, up 83.4% YoY & 24% QoQ

- Solar posted a PAT (Post Minority interest) of Rs. 91 crore in Q4FY21 vs Rs. 78 crore in Q3FY21 & Rs. 50 crore in Q4FY20

- Current order book of Solar Industries stands at Rs. 1510 crore

- Coal India & SCCL Rs. 830 crore

- Defence Rs. 680 crore

Solar has registered a strong performance for FY21 which reflects the company's resilience in difficult times. The only drag in performance has been the sluggish defence segment, which we believe is poised for a turnaround post the Multi-mode hand grenade order win. Strong order book, turnaround in defence segment coupled with foreign subsidiaries turning breakeven are expected augur well for Solar Industries in FY22. We will be coming out with a detailed report post conference call.

Shares of SOLAR INDUSTRIES INDIA LTD. was last trading in BSE at Rs.1409.55 as compared to the previous close of Rs. 1337. The total number of shares traded during the day was 15124 in over 1406 trades.

The stock hit an intraday high of Rs. 1444 and intraday low of 1368. The net turnover during the day was Rs. 21320164.

Source : Equity Bulls

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