This defence stock turned into a multibagger in three years; down 19% from record high

The defence stock delivered multibagger returns of 163% and 225% in one and two years, respectively. 

It hit a record high of Rs 13,300 on July 11 this year.  Since then, the Solar Industries stock has lost 19%. 

Meanwhile, the stock rose 6.06% to Rs 10,789.95 today against the previous close of Rs 10,172.55 on BSE. The rally in the defence sector stock came after the firm reported its June quarter earnings. 

Market cap of the firm stood at Rs 92,470 crore. Total 3,272 shares of the firm changed hands amounting to a turnover of Rs 3.34 crore on BSE. The stock had a beta of 1 in the last one year, indicating average volatility during the period.  

In terms of technicals, the relative strength index (RSI) of Solar Industries India stands at 39.6, signaling the stock is trading neither in the overbought nor in the oversold zone. Solar Industries India shares are trading lower than the 5 day, 10 day, 20 day, 50 day but higher than the 100 day, 150 day and 200 day moving averages.  

Solar Industries India logged a 49.08 percent year-on-year rise in Q1 net profit to Rs 300.54 crore against Rs 201.59 crore in the June 2023 quarter. However, revenue climbed just 0.75% to Rs 1694.78 crore in Q1 against Rs 1682.21 crore in the June 2023 quarter.  

The firm reported a 43% rise in EBITDA to Rs 473.67 crore in Q1 of this fiscal against Rs 331.31 crore in the June 2023 quarter.  

Stock outlook 

ICICI Securities has assigned a buy call to the stock with a price target of Rs 13,250. It values the stock at 65 times FY26 estimated EPS. 

Q1 shareholding 

Seven promoters held 73.15 per cent stake or 6.61 crore shares and 72,846 public shareholders owned 26.85 per cent or 2.42 crore shares in the firm for the quarter ended June 2024.

Of these, 68,663 resident individuals held 39.74 lakh shares or 4.39% stake with capital up to Rs 2 lakh. Three shareholders held 0.58% stake or 5.27 lakh shares with individual capital over Rs 2 lakh. 

28 mutual funds owned 12.06% stake or 1.09 crore shares at the end of Q1 this fiscal. 

About Solar Industries India     

Solar Industries is an India-based manufacturer of industrial explosives for the mining and infrastructure sector. The company offers industrial explosives and defence products.