Rs 7,122 Crore Order Book: Aerospace & Defence Company Bags New Order Worth Rs 6,084 Crore From Ministry of Defence
The stock is up by 43 per cent from its 52-week low of Rs 6,551 per share and gave multibagger returns of over 600 per cent in 5 years.
Solar Industries Ltd (SIL), a leading global manufacturer of explosives and initiating systems, has secured a significant contract with the Ministry of Defence. The contracts, awarded to SIL's wholly-owned subsidiary Economic Explosive Limited (EEL), are for the supply of Area Denial Munition (ADM) Type-1 (DPICM) and High Explosive Pre-Fragmented (HEPF) Mk-1 (Enhanced) rockets. These munitions will be used with the PINAKA Multiple Launcher Rocket System (MLRS), representing the largest contract in Solar Group's history. EEL has also been nominated by the Defence Research and Development Organisation (DRDO) as the production agency for all Pinaka Rocket System variations.
This substantial order, valued at Rs 6,084 crore, is a domestic contract awarded by the Ministry of Defence for the supply of defence products. 86% of the contract is to be executed within 10 years, with the full timeframe spanning 8 to 15 years. This achievement underscores Solar Group's commitment to the "Make in India" and "Make for World" initiatives under the Atmanirbhar Bharat Abhiyan. The contract is expected to drive revenue growth in the defence sector and solidify the company's position in indigenous defence manufacturing.
Earlier, Solar Industries India Limited's subsidiary, Economic Explosives Limited (EEL), partnered with the Government of Maharashtra to establish a major defence and aerospace project in Nagpur. The agreement, finalized in Davos, Switzerland, involves a substantial investment of Rs 12,700 crore. The project aims to expand the production of existing defence products like drones and counter-drone systems, while also introducing new lines such as military transport aircraft. The Maharashtra government has pledged its support by streamlining approvals and providing fiscal incentives. In addition to this major development, Solar Industries has also secured significant export orders totalling Rs 2,039 crore. These orders, from international clients, are for the supply of defence products over the next four years. This achievement highlights the company's growing global presence and its ability to meet the demands of international defence forces.
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About the Company
Solar Industries Ltd (SIL) is one of the world’s leading manufacturers of bulk explosives, packaged explosives and initiating systems, which find applications in the mining, infrastructure and construction industries. SIL also ventured into the defence segment in 2010 and diversified into manufacturing propellants for missiles and rockets, warheads and warhead explosives.
The company has a market cap of over Rs 80,000 crore and has delivered good profit growth of 28.1 per cent CAGR over the last 5 years. As of December 31, 2024, the company’s order book stands at Rs 7,122 crore.
The shares of the company have an ROE of 33.4 per cent and an ROCE of 34.7 per cent. The stock is up by 43 per cent from its 52-week low of Rs 6,551 per share and gave multibagger returns of over 600 per cent in 5 years. Investors should keep an eye on this mid-cap stock.
Disclaimer: The article is for informational purposes only and not investment advice.