Explosive Returns: This Defence Stock Blasts Up 10x From 2019 Lows!
Solar Industries India Ltd has been making headlines with its impressive stock performance, and its market capitalization crossing a significant milestone of Rs 1 lakh crore. The stock surged by as much as 11% to hit a record high of Rs 11,190 on the National Stock Exchange (NSE) on Tuesday, 2nd July. This rally was sparked by an exciting development disclosed by the company.
Game-Changing Innovations for the Armed Forces
In a significant stride toward self-reliance in munitions, the Indian Navy has successfully carried out certification tests for SEBEX 2, a powerful new explosive developed by Economic Explosives Ltd, a subsidiary of Solar Industries in Nagpur.
This advanced formulation by Solar Industries is claimed to have a blast effect surpassing any existing solid explosives by a notable margin. It is reportedly 2.01 times more potent than traditional TNT (Trinitrotoluene). Explosive power is often gauged by TNT equivalence, where a higher value indicates increased destructive capacity.
These advancements are set to revolutionize the capabilities of the Indian armed forces. Solar Industries officials highlight that the SEBEX 2, with its superior TNT equivalence, provides enhanced firepower and greater destructive potential. This breakthrough not only enriches Solar Industries' offerings but also marks significant progress in defence technology.
Solar Industries Financial Highlights
Solar Industries has demonstrated robust financial health, with an impressive order book of Rs 5,129 crore and sales volume reaching 5.5 lakh MT. Its Q4FY24 financial results slightly surpassed analyst expectations, reporting a 9% increase in net profit at Rs 240 crore compared to Rs 220 crore in the previous corresponding quarter.
Despite challenges like hyperinflation and currency depreciation in some international markets, the defence player reported a 23.6% year-on-year increase in explosive sales volume due to high demand across all segments. Additionally, the company's financial health improved as it managed to reduce both working capital and debt levels. The firm also distributed a dividend of Rs 8.5 per share.
What’s Next for Solar Industries?
As Solar Industries continues to advance towards self-reliance in defence manufacturing, its defence segment's impressive 75% year-on-year growth stands out. The company's management forecasts a threefold increase in defence revenue by FY25, supported by a strong order book that now makes up 20% of total sales.
Given these solid growth prospects, the question arises: Is this the right time to invest in Solar Industries India Ltd? Can the stock sustain its momentum?
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