Ladies and gentlemen, good day and welcome to the Solar Industries Q4 FY 2026 earnings call hosted by Motilal Oswal Financial Services. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Miss Teena Virmani from Motilal Oswal Financial Services. Thank you, and over to you, Ma'am.
Yeah, thanks. Good evening, everyone. On behalf of Motilal Oswal Financial Services, we thank the management of Solar Industries to give us an opportunity to host the call. From the management team, we have Mr. Manish Nuwal, Managing Director and CEO, Mr. Suresh Menon, Executive Director, Mr. Milind Deshmukh, Executive Director, Mr. Moneesh Agrawal, Joint CFO, and Mrs. Shalinee Mandhana, Joint CFO. Over to you, Mr. Manish, for your opening remarks, and after that, we will open the floor for Q&A.
Thank you, Teena. A very good evening to all our dear stakeholders and investors. My name is Shalinee, and I would like to welcome you all to Solar Industries fourth quarter and yearly conference call of FY 2026. This call's recording, including the transcript, will be available on the site. The financial statements, quarterly fact sheet, investor presentation, and press releases are all available on the website. To begin with, I would like to remind you all that during this call, we might make projections or other forward-looking statements regarding future events and about the future financial performance. Please remember that such statements are only predictions. Actual events or results may differ materially, and our website will be updated with all the relevant information from time to time.
Now, I would request Solar's MD and CEO, Mr. Manish Nuwal, for his opening remarks on the company's performance, followed by Q&A session. Over to you, Sir.
Dear esteemed investors, a very good evening. I, Manish Nuwal, Managing Director and CEO, welcomes you all to Solar Industries India Limited's earnings call for the fourth quarter and financial year ended 31st March 2026. We're happy to report that our company has delivered landmark performance, logging its highest ever quarterly and annual sales of INR 3,053 crore and INR 9,838 crore respectively, despite no growth in domestic mining markets. We have also achieved the highest ever quarterly EBITDA and PAT at INR 870 crore and INR 556 crore, registering a growth of 59% and 61% year-on-year, and highest ever quarterly EBITDA and PAT at INR 2,750 crore and INR 1,737 crore, registering a growth of 35% each in the year FY 2026.
We achieved our EBITDA margins at around 28.5% for this quarter and 27.95% for the whole year. These numbers were propelled by strong sales from international and defence business, relentless focus on our high- value chain products and operational efficiencies. Dear investors, our defence business has nearly doubled, delivering outstanding growth with revenue surging 134% in Q4 and 94% for the full year to reach a record high of INR 1,008 crore and INR 2,634 crore, respectively. A robust sales pipeline coupled with strong execution capabilities position us well to sustain this momentum, and we should cross defence revenue of INR 4,500 crore in FY 2027. Solar's international business has performed very well, and as a result, we registered a growth of 32% year-on-year.
Solar's ability in establishing strong relationship with its customers as a trusted partner underscores company's strength in identifying and capitalizing the global opportunities. Our recent expansions into northern and western parts of India, paired with upcoming plants in the east and south India as well, will definitely help us to strengthen our domestic footprints. This expected growth in domestic market is further complemented by our strong momentum in international business. Additionally, the defence vertical is steadily maturing into a powerful standalone platform, driving deep tech innovations, enabling significant future growth potentials. In FY 2026, we have delivered 30% revenue growth and surpassed our annual EBITDA guidance. This performance reinforces our confidence in the scalability of our business.
Backed up by a strong order book of INR 21,300 crore and robust opportunities across all verticals, we are targeting to achieve a revenue of INR 14,000 crore in FY 2027 while maintaining current margins. To support these growth plans, the company has invested INR 2,700 crore over last two years and entering into FY 2027 with a planned annual CapEx of INR 2,050 crore. The company has proposed a dividend of INR 11 per share for FY 2026, 2027, up from INR 10 per share in the previous year, reflecting confidence in its financial health and commitment to the shareholders. I sincerely thank all our esteemed investors and analysts for joining us today. Thank you for your continued trust and partnership. Now, I will hand over this session to my Shalinee Mandhana for presenting the financials in detail.
Thank you, Sir. Coming to the results, we have shared the investor presentation carrying all the necessary information for your kind perusal. Key highlights for quarter four and full- year FY 2026 are as: Sales. The consolidated revenue for the quarter is INR 3,053 crore versus INR 2,167 crore, and f or the year, it is INR 9,838 crore versus INR 7,540 crore.
The percentages of the sector in the customer basket are as follows: CIL is down in the basket to 9% from 13%, n on-CIL and institutional is at 10% from 14%, h ousing and infra is at 15% from 16% in the basket, i nternational business is at 33% from 36%, and d efence has massively increased to 33% from 20% and has crossed the four-figure mark, reaching INR 1,008 crore during the quarter. In terms of percentage, it is up 134% year-on-year basis.
In the year, the CIL in the basket is down to 9% from 13%, n on-CIL and institutional is at 12% from 15%, h ousing and infra is at 12% from 15% in the basket, i nternational business is almost similar at 39% from 38%, and d efence increased magnificently to 27% from 18% and in number terms, it has almost doubled to INR 2,634 crore from INR 1,355 crore and up by 94%.
Raw materials. Raw material consumption for the quarter stands at INR 1,522 crore versus INR 1,178 crore and at year, it stands at INR 4,894 crore versus INR 3,979 crore. The employee cost for the quarter stands at INR 253 crore versus INR 174 crore and for the year, it stands at INR 845 crore versus INR 600 crore. The other expense for the quarter stands at INR 453 crore versus INR 275 crore and for the year, stands at INR 1,477 crore versus INR 1,001 crore. EBITDA. We reported highest EBITDA numbers for the quarter at INR 870 crore versus INR 546 crore and for the year, the highest EBITDA stands at INR 2,750 crore versus INR 2,031 crore.
The interest and finance cost stands at INR 41 crore versus INR 29 crore and for the year, it stands at INR 134 crore versus INR 117 crore. Depreciation cost stands at INR 71 crore versus INR 50 crore for the quarter and for the year, it stands at INR 251 crore versus INR 182 crore. Profit before tax stands at INR 759 crore versus INR 464 crore and for the year, it is at INR 2,365 crore versus INR 1,739 crore. The highest ever quarterly tax stands at INR 556 crore versus INR 346 crore and for the year, it stands at INR 1,737 crore versus INR 1,288 crore. These were the updates for the quarter and the year.
This is all from my side and now we'll be happy to take any questions, comments, or suggestions that you have, may have. Over to you, Teena.
We can now open the floor for Q&A.
Thank you. We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on their telephone keypad. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Amit Dixit with Goldman Sachs. Please go ahead.
Hi. Good evening, everyone and c ongratulations for a very robust set of numbers and indeed a very strong guidance. I have a couple of questions. The first one is on international business. Now, if you look at international business, the growth has been very good this year. Just wanted to get a sense on, you know, the new geographies like Zimbabwe that we entered this year and what are the other key geographies we might be thinking. Also, what, I mean, what all geographies are we expecting more traction in this year, FY 2027? That is my first question, Sir.
Thank you, Amit. You are very right that international business is doing quite good. Like I say, in this year, the international business has grown by 32%. In the next year, which is FY 2027, we are expecting, apart from defence, domestic and international both should do very good. As far as new territories are concerned, mainly we are focusing on African continent, and that's the market where we are expanding every year. Like I have explained in my previous calls, we have created South Africa as one of the hubs for our future expansions. We have already set up the facilities, apart from South Africa, in Zambia, Tanzania, and we have also started Zimbabwe facility.
In the West Africa, we have Nigeria as a base, and from there we have started our operations in Ghana. In this year, we are expecting to start operation in Sierra Leone. In Turkey, we have a strong base, and we have started Kazakhstan plant. Similarly, we are trying to expand in all those markets which helps us to utilize the facilities which we have set up in these major markets. As far as Southeast Asia is concerned, we have a small facility at Thailand and Indonesia. Australia is also going to start very soon.
Great, Sir. Very clear. The second question is essentially on defence. Now, defence guidance has been, I mean, is very, very robust after a very good quarter. A couple of clarifications or, you know, little bit more color that I would request from you in this regard. One is about Bhargavastra. I mean, the counter-drone systems have been in flavor, I mean, for some time now. Just wanted to get an understanding where we are on that front, if any tests are pending, and when can we expect the order. Similarly, the progress on 155 mm shells, where we are with respect to tests and other necessary certifications.
Normally, we would like to avoid all such product-specific questions due to variety of reasons. But Bhargavastra is a strategic item for us, and we are developing this product from last couple of years. This product will be one of the very few companies in the world who will be developing such kind of system. The product development is in the final stage, but still such kind of product development takes longer time than what we expect. Definitely, we should be able to complete all the trials in this calendar year. This is the status of Bhargavastra. As far as 155 mm products are concerned, we have already started supplying all the raw material intermediates going into this product.
Our coupling facility, which will help us to produce the complete 155 mm product, should be able to finish in next couple of quarters, but d efinitely, it will take another three to four months' time, then we will start supplying the complete round of 155 mm.
Very comforting, Sir. Thank you so much, and all the best.
Thank you.
The next question comes from the line of Umesh Raut with Nomura India. Please go ahead.
Hello, Sir. Good evening and c ongratulations for very good set of numbers. My first question is pertaining to our exports business. If I look at our historical trajectory, I think, we have seen stronger growth in between FY 2019 to 2023, when our business actually grew by almost 3.5x in terms of top line. Then, we had almost more of a flattish growth between 2023 to 2025. Again, I think it looks like with 32% kind of a growth in 2026, growth is looking very stronger on the export side. I just want to understand how big this opportunity is. Probably two, three years down the line, again, can we expect closer to 2x, 3x kind of jump in terms of top line for our export business?
To achieve these kinds of growth opportunities , what kind of investment that we can expect from you in terms of medium term, both on capacity expansion as well as on client traction side?
Yeah. Thank you very much. Yeah, you are right that if you look at 2015 number, the export and overseas was around INR 400 crore, and that has reached to almost INR 800 crore. There, we hover around for almost three to four years, right from 2021 to almost, 2018 till 2021, we were in that range of INR 800 crore. After that, it started picking up. The point was that during that period, we were setting up the greenfield facilities, qualifying ourselves into the overall mining procurement system. That was the key period. After that, the sales from our exports and overseas has started picking up, especially from 2022. That was the year when it has reached to INR 1,400 crore, and now it has crossed almost INR 3,800 crore.
Next year also we are expecting a growth of around 30%. We believe that there are plenty of opportunities for us in the international market, but it will be for us to give any trajectory specifically in numbers of how much multiple we can grow, how much times we can grow from this base. I feel that since international markets are growing at 2%-3%, but we expect that volume terms should, we should be able to grow comfortably at around 10%, and in value terms we should be at around 15%. This year, definitely because of the rise in commodity price, it will help us to have more top line. That's why we are bullish. For the next year, we are expecting a growth of around 30%.
Got it, Sir. Sir, just one clarification, i f you can give us some understanding about market share that you have in key markets and export region.
As of now, we don't have that kind of visibility.
Okay. Okay. Sir, my second question is if I exclude your target growth on exports and defence side, domestic looks like is expected to see about 35% kind of growth for FY 2027, which is more of an implied growth from your guidance. Is it on the account of purely low base where FY 2026 was also impacted here from the monsoon? Apart from that, probably higher traction on infra and coal volume side that you are expecting in FY 2027?
Yeah. For the next year, like what we have mentioned that we are targeting INR 14,000 crore revenue, and if you take the defence out of that total number, then it is around INR 9,500 crore. Like I said, domestic and international combined together, we should be able to grow +30%. Out of this 30%, 32% or 33% growth, we expect that 10%-15% should come from volume growth and around 20%, 18%-20% should come from the price rise. That is mainly because of the impact of the higher crude or gas prices on the down, upstream products or downstream lines. As far as the demand for domestic market is concerned, last year it was a totally flat growth market.
You can say the OB removal in Coal India, Singareni, and private coal mines combined together was on a negative side. Despite of that, we managed a decent growth of around 4% in value terms. This year, we expect that because of the pressure in the market where people would like to shift from the diesel, petrol, or generated products to the electricity-based products. That will definitely help the growth in the coal mining sector. Since last year was the bottom out kind of situation for OB removal section, this year, we expect the demand should pick up.
Understood. Understood. Sir, my last question on the competition side. We are hearing about probable entry of Kalyani Group into explosive business, so a ny kind of thought process here? I mean, do you see incremental competition because of this? Especially if you look at, I think, defence, because they were already present in this business in form of guns and missiles, probably. Any kind of color over here, in terms of competitive intensity you are seeing increasing in the domestic market?
The first point is, definitely I would not like to comment on the competition side or competitor, but it's a matter of fact that Solar has risen its base from 1996, where it was a small player in the whole explosive market. We have competed with the world number one, number two in the markets, and w e have increased our presence. From competition side, we are not afraid from anyone. But market opportunities are immense, where everybody will have its own pie. We cannot say that we will have a 100% market share, and t hat is not our target also. The way we are expanding, it is not the only product which we are working into. We are not a hardware company also. We are developing energetic products.
We are expanding our technology footprints and going to offer many advanced technology solutions for the border security.
Understood, Sir. Thank you. Thank you so much for these answers, and a ll the very best.
Thank you.
The next question comes from the line of Vikash Singh from ICICI Securities. Please go ahead.
Good evening, Sir. Thank you for the opportunity and congratulations on a very good set of numbers despite challenges. Sir, my first question pertains to since our defence mix is improving in the overall sales, while we are still getting the guidance, margin guidance kind of a impact versus last year, so i s it some of the item where the cost inflation pass on would be difficult and that's why overall margin has failed? Or we traditionally doing a conservative estimate at this point of time?
Sir, as far as EBITDA margins are concerned, you are aware that prices of all the commodities has gone up, and d efinitely passing on the same increase sometime is difficult. But we have increased the prices and there are rise and fall calculations already in place in our contracts. That will take good care of the actual price rise. If you look into the overall EBITDA margin, definitely there will be some little bit impact. But since our defence is picking up, international is also doing very good, and we should be able to maintain the current EBITDA margins.
Noted, Sir. Sir, my second question pertains to the domestic explosive market. Obviously, we have added a lot of capacities and eyeing a market share gain. Is it basically through the new products, because segments remains the same or the user industries are limited in a way, and none of them are growing at 10% or 12%, so j ust wanted to understand this market share gain strategy, how we are actually targeting that?
It is not a straight away market gaining strategy. Over last, say, 10, 12 years, we were expanding our facilities at our core plant, which is at Nagpur, which makes packaged explosives and initiating systems. As we have become a global player, capacity utilization level has gone up. At the same time, if you look into the logistic cost which comes on the explosives, it is a wise step for us to expand outside Nagpur. That's why we have acquired a company in northern part of India. At the same time, we have just almost finished the mega expansion in western part of India. Similarly, we are going to expand our base in Odisha and Telangana markets, Andhra Pradesh. So, this is a key reason.
Second is, as you are near to the customer, definitely, gaining or servicing the customer is always better, and that helps us to grow or grab the market growth in those markets. That's the key point.
Noted, Sir. Sir, just one last question. In terms of this quarter, had we had any inventory gains in our overall numbers, or it's the natural kind of the margin which we were expecting?
Definitely, whenever prices goes up, we have inventory. Like in this quarter, our inventory was more than what we normally carry due to variety of reasons. Definitely, we will have inventory gain in the coming quarter. At the same time, this is very normal for our kind of industry. Since price goes up by, say, example, INR 200 [audio distortion], but we will get only the price escalation based only for, say, 60% of the total increase. That will take care of only the price increase. There are certain contracts where we can pass on after a quarter. Those kinds of situation we can easily absorb with having such kind of inventory level. Definitely, we are in a very good position to absorb these kinds of shocks.
Noted, Sir. Sir, next year's CapEx, if we can split between defence versus non-defence explosives, that INR 2,000 crore+ CapEx?
Right. We always say that for us, our business is one, and next year we are going to invest around INR 2,050 crore, and we always analyze the CapEx program based on the priority and market opportunity available to us.
Noted, S ir. Thank you, and all the best for the future, Sir.
Thank you.
Thank you. The next question comes from the line of Dipen Vakil with PhillipCapital. Please go ahead.
Thank you for this opportunity, and congratulations on a great execution. Sir, my first question is, Sir, can you help us with the order book breakup between defence and non-defence for the INR 21,300 crore order book? What are the major orders which we can expect in near future? Any highlight on that?
Out of the total INR 21,000 crore of order book, defence is around INR 18,000 crore and non-defence is around INR 3,000 crore. Out of this total defence INR 18,000 crore order book, mainly the biggest order was from Pinaka, and just all are small, small raw material and intermediate goods for the Indian markets. We have also received plenty of orders from the international markets. As far as new orders are coming, yes, we are in final stages of receiving orders for the similar products. We are also expecting orders from Pinaka series of products that is in the discussion stage. We are in negotiation, but that takes time.
Got it, Sir. Sir, my second question is I want to understand the new product and development which are happening at Solar. Considering that a lot of, can you help us understand which are the new products which are on the advanced stages of finalization in terms of development and can come into your product portfolio soon, and which are in the early stages?
Like I said, it is not wise on our part to share the program-wise progress and status. Definitely, the products on which we are working very closely, and which are in the final stages is one of them is Bhargavastra, which is a counter- drone product. There are multiple options within the loitering munition, t hose are also in the pipeline. Apart from these two, like I said, 155 mm complete round of ammunition that is also in the last stage of complete trials. Once we have finished, like I said, we have already started on making the propellants for these products, which is large caliber ammunitions. Now, we are going to make a complete round and supply for the qualification.
These are the key products, apart from many others which are in the design and development parts, and that is not good on us to explain the exact status for each product. We can also, since DRDO is developing many of the products and we are also partnered with those programs. These program takes time, and we will definitely share the progress on key milestones.
Got it, Sir. Last, small follow-up, Sir. You had like medium caliber ammunition facility you had recently commissioned. Is it operational now, or we are still awaiting some certification or something? Can you share an update on that?
That is already commissioned, and we are starting supplying the products for qualification. Once we qualify, we will definitely receive orders for those products.
Got it, Sir. That's all from my side. Thank you so much, and all the very best for FY 2027, Sir.
Thank you.
The next question comes from the line of Bharat Shah with BCS Capital Ideas. Please go ahead.
Yeah. Hi, Manish, h earty, hearty congratulations. Once again, really standard-defining performance. Hearty congratulations to you and the team.
Thank you very much, Sir.
Lot of pleasure. Yeah, I, over a dozen odd years that I've known you, in a very quiet and unassuming way, from virtually a limited product and limited geography, we have built a business which is multi-sector, multi-geography, multi-products, and made it brick by brick, a very resilient and strong business. So, great credit to the way the business has been built over a period of time. I remember 10 years back when defence business seeds were being laid and there was nothing on the horizon, and how painstakingly efforts have been put to build the business where it is today. Clearly, kudos to you and the entire Solar team. Just one, two questions.
Last year, if you see the financial year 2025, 2026, working capital is sucked away almost about INR 1,600 crore. In the years prior to that, working capital actually released about INR 800 crore. From the cash flow, operational cash flow, almost a swing of INR 2,400 crore is being sucked away from the operational cash flow in the 2025, 2026. Any comments on that?
First of all, thank you very much, Bharat bhai, for your kind appreciation. Definitely, in fact, it's a responsibility of every citizen and every company to work towards our national security and contribute for the country's prosperity and progress. Thank you very much, Sir. As far as your working capital question, Shalinee will respond to that. Just a minute.
Hello. Good evening, Sir.
Yeah, good evening.
Yes, yes. The working capital days had been in this year, it had been holding around 90- 100 days till quarter three. But in quarter four, working capital days have been increased primarily due to high inventory levels. They were mainly done to build them and mitigate the risk arising from geopolitical uncertainties. To address the uncertainties and maintaining supply chain continuity, both had been critical. As Manish ji had answered in the last call, obviously these inventory levels will help us going forward. You know, it won't disturb the revenues going ahead, as well as the same will help in generating the margins.
Yeah. Sorry. Please go ahead.
Yeah. As the geopolitical situation stabilizes, we anticipate normalization in the working capital limits over time, maybe in next two quarters.
Sure. So, this was a deliberate and strategic decision, it is not accidental?
Yes, Sir. Correct.
Right. Right. Second, if I see contribution of subsidiaries to the earnings, consolidated bottom line, I'm a bit intrigued by that. If you see our consolidated earnings for last year has been about INR 185 compared to INR 134 last year, year 2025, o f which, subsidiaries have contributed INR 50 in the current year compared to INR 45 in the year preceding. Subsidiaries have barely added to the consolidated bottom line, which, considering our exporting international presence, I'm a bit surprised at how subsidiaries have made relatively more muted contribution. Of course, in the fourth quarter , it is dramatically improved. There's INR 11 headcount contribution of subsidiaries to the fourth quarter results last year, which has shot up to INR 19 in the current year.
But a year in entirety, INR 45 earnings to INR 50 earnings of the subsidiaries, I'm a bit surprised by that.
Sir, in the first half of this year, since the defence business, and b ecause defence, our Solar Defence is a subsidiary of Solar Industries, and our international business are also subsidiaries. If you look at the total results, definitely in the first six months, the results from the defence section as well as the international, as far as margins are concerned, were subdued. It started improving from Q3. In Q4, those all started giving very good results. That's the key factor. Now onwards, we believe that the subsidiaries levels, whether it is in India or overseas, all will start delivering very good performance. That's why despite of a very high base of raw material prices, which we are expecting in the coming financial year, we are pretty confident that we should be able to achieve the current levels of EBITDA margins.
If you look at the three, four years back period when the raw material prices has increased by 50%, 60%, 70%, at those times our EBITDA margins went down by around 2%-3%. This time, we are confident that we should be able to manage the situation with the help of improved defence as well as international business.
Sure. Understood. Which means basically volatile currencies and volatile geographies must have taken away some part of the earnings, I suppose, in the last few years?
Yes.
That you expect it to be reversed, right?
Absolutely, Sir. That is the situation in all these markets. Sometimes there is a lack of payment, sometimes we have to buy at a higher price. But frankly speaking, all such kind of uncertainties, and if you handle it well, converts into an opportunity. And we like all these things. In nutshell, Sir, overall, as a business, if you are able to achieve around 27%-28% of EBITDA margin despite of all the current crisis, it's all because of the efforts which we have taken on all the fronts.
Absolutely. The record is there to show it fully what you are saying. So, remarkable, remarkable one. Once again, hearty congratulations.
Thank you, Sir.
The next question comes from the line of Sanjeev Zarbade with Antique Stock Broking. Please go ahead.
Yeah, Sir. Thanks for taking my question. Sir, our exports business has remained largely flattish on a sequential basis. Are you seeing any headwinds on account of the developments in the West Asia regarding freight and, you know, logistics? Would it impact in the, you know, growth in Q1?
In the Q4, the revenue from international is around INR 1,000, and last quarter also, it was in a similar range. We expect improved performance even more than these levels in the coming quarter.
Sir, my second question was regarding the impact of the commodity prices, and of course we have taken some pricing changes. I think, from our past interactions, I think, the benefit of pricing change comes with a lag. Is it possible that we might see some impact on margins in Q1, and then maybe in Q2, there could be some, you know, recoup of the margins?
We run business as a whole, and we don't wish on quarter-to-quarter basis. What guidance we have given, we are pretty optimistic that we should be able to achieve that.
Sir, thirdly, because of the increase in prices of ammonium nitrate, would there be any demand impact, in the sense that, you know, buyers might wait for some time to prices to cool off and then, you know, start buying at the high [crosstalk]?
It is too early to comment on this because the impact of very high prices of commodities, killing the demand, we need to wait for some more time, get a clarity and the response of the people who are going to consume these products. But by and large, we are, we do feel that there can be a demand contraction for some couple of months. By and large, on annual basis, I don't see that.
Okay, Sir. Thanks, Sir. Thanks and, great, and congratulations on great set of numbers.
Thank you.
Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for the closing remarks.
Hello. Yeah. We thank Motilal and Chorus Call for the call and all the investors that may be for taking the call. Thank you.
Thank you, Ma'am. Ladies and gentlemen, on behalf of Motilal Oswal Financial Services Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.