Solar Industries India (SOLARINDS) Q2 24/25 earnings summary

Executive summary

• Achieved record quarterly and half-yearly EBITDA and PAT, with Q2 FY25 revenue up 27% year-on-year and PAT up 45%; half-yearly PAT rose 47%.

• Defense segment revenue grew 204% year-on-year in Q2, now comprising 19% of sales, and international business expanded 25% in Q2.

• International and defense segments drove growth despite subdued domestic demand due to elections and heavy monsoon.

• Unaudited standalone and consolidated financial results for the quarter and half year ended September 30, 2024, were approved by the Board and reviewed by auditors.

• The group operates primarily in the 'Explosives, Accessories and related services' segment.

Financial highlights

• Q2 consolidated revenue: INR 1,716 crores (up from INR 1,347 crores); H1 revenue: INR 3,401 crores (up from INR 3,030 crores); Q2 PAT: INR 304 crores; H1 PAT: INR 604 crores.

• Q2 EBITDA: INR 475 crores (margin 27.7%, up from 25.52%); H1 EBITDA: INR 949 crores (margin 27.9%, up from 22.29%).

• Basic and diluted EPS for H1 FY25 was INR 63.25, up from INR 43.93 in H1 FY24.

• Gross margin improved as material consumed as % of sales decreased by 2.93 pts YoY for H1 FY25.

• Standalone revenue for Q2 FY25 was INR 905.49 crores, with net profit at INR 186.82 crores.

Outlook and guidance

• Defense product sales expected to reach INR 1,500 crores in FY25, with defense at 20% of total sales.

• Capex guidance for FY25 revised upward from INR 800 crores to INR 1,200 crores, with expectations of continued elevated Capex in coming years.

• EBITDA margin guidance raised to 25%+ for the foreseeable future.

• Order book stands at INR 5,757 crores, indicating robust demand pipeline.

• Results have been prepared in accordance with Ind AS 34 and reviewed by statutory auditors.