A company that has spent decades blasting rocks in mines is now building parts for missiles, rockets and drones.
Motilal Oswal has initiated coverage with a ‘Buy’ rating, setting a target price of Rs 23,000, implying a potential 24% upside from current levels. The stock name is Solar Industries.
According to the Motilal Oswal report, Solar Industries is gradually expanding into ammunition, rockets, drones and counter-drone systems.
Let’s take a look at the 4 factors that Motilal Oswal believes could shape the company’s growth.
From explosives to a wider defence play
Solar Industries has traditionally been known for its explosives business. According to the Motilal Oswal report, the company had around 26% volume market share in India’s commercial explosives industry in FY25.
However, its business is moving into newer areas. The company has expanded from high-melting explosives such as HMX, or High Melting Explosive, to warheads, rockets and unmanned systems.
Its defence portfolio now includes products such as Pinaka rockets and Nagastra. The company is also working on Rudrastra and Bhargavastra.
“Successful trials and commissioning of Nagastra, Rudrastra and Bhargavastra would further diversify the company’s revenue stream beyond Pinaka and HMX,” Motilal Oswal said.
The brokerage expects the defence segment to account for around 22% of the company’s mix by FY29, compared with 78% for industrial explosives.
The Omnia deal could change the scale
Another major factor is Solar Industries’ acquisition of Omnia Holdings, a South Africa-based chemicals and explosives company.
The deal is valued at around Rs 13,000 crore and is being funded through debt and internal accruals. Omnia reported revenue of around Rs 13,000 crore in FY26, according to the brokerage report.
The acquisition will increase debt and could put pressure on margins in the near term. But Motilal Oswal believes it can provide a larger international platform and improve access to ammonium nitrate, an important raw material for explosives.
“Omnia’s BME Mining business complements SOIL’s existing product and service portfolio,” the brokerage said.
The brokerage expects Omnia’s revenue to increase from Rs 13,300 crore in FY26 to Rs 16,200 crore by FY30.
Defence order book provides another trigger
Solar Industries is also building a sizeable defence order pipeline. According to the brokerage report, its defence order book stood at around Rs 18,000 crore as of June 2026.
This included international defence orders worth around Rs 11,000 crore and a Pinaka order worth Rs 6,000 crore.
Motilal Oswal points to additional Pinaka orders, guided Pinaka, replenishment rockets and exports. Newer products such as Nagastra-2, Nagastra-3 and Bhargavastra could also add to the order pipeline if trials and inductions progress.
The company is also expanding into 155-millimetre ammunition, proximity fuzes and high-performance unmanned aerial vehicles.
Why backward integration matters
Solar Industries manufactures several important raw materials and components internally. These include emulsifiers, detonator shells, PETN (Pentaerythritol Tetranitrate), TNT (Trinitrotoluene) and RDX (Research Department Explosive).
As per Motilal Oswal report, this backward integration reduces dependence on outside suppliers. The Omnia acquisition could strengthen this further through access to ammonium nitrate facilities.
Motilal Oswal expects consolidated revenue to grow at an annual rate of 43% between FY26-FY30 on a compounded basis. The PAT is expected to grow 34% annually in the same period on a compounded basis.
Based on these estimates, the brokerage has valued the stock at 50 times December 2028 estimated earnings per share and arrived at a target price of Rs 23,000.
Disclaimer: This article is based on research reports from one or more brokerage firms and is for informational purposes only. The views, target prices, and recommendations expressed are those of the respective brokerage firms and do not reflect the official policy or position of Financial Express. This should not be construed as an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor before making any investment decisions.