India’s defence manufacturing ambitions are no longer limited to large public sector companies. A new set of players in the explosives segment — critical for ammunition, propellants, and missile systems — is quietly gaining ground. As government orders rise and export demand increases, these companies are expanding their capacity and pursuing new growth opportunities.
In this piece, we look at three listed players in the defence explosives space — one established, and two scaling up to evaluate whether the rally in their stocks has more legs or calls for caution.
#1 Solar Industries
Solar Industries is one of the largest domestic manufacturers of bulk and cartridge explosives, detonators, detonating cord, and components. It boasts a market share of about 24% in the explosives sector. Its Nagpur plant is the world’s largest single-location cartridge plant.
Geographically, it is well diversified with plants in Nigeria, Zambia, South Africa, Turkey, Tanzania, Indonesia, Australia, and Ghana. The company is also setting up plants in Saudi Arabia and Kazakhstan.
Strong growth posted in FY25
In FY25, Solar Industries posted a strong set of numbers. Revenue rose 24% to ₹75.4 billion, driven by the defence segment. Volume growth of 7%, along with 8% value growth, contributed to the revenue growth.
Revenue from exports in FY25 grew by 18% to ₹29 billion over the previous year. Exports now comprise 38% of revenue, down from 40% in FY24. Defence revenue has increased by a whopping 162% to ₹13.6 billion, and now makes up 18% of revenue, up from 9% in FY24.
With higher operating leverage, the EBITDA margin also expanded by 3.6 percentage points to 26.9%. As a result, net profit grew 47% to ₹12.9 billion. EBITDA stands for earnings before interest, tax, depreciation, and amortization.
Defence pipeline supports near-term growth
The company’s order book stood at ₹170 billion (as of March 2025), with defence orders making up ₹152 billion. It reflects strong revenue visibility well into the next two financial years. In the current quarter, it won a ₹4 billion order from Coal India to supply cartridges and explosives.
The company expects to achieve a revenue growth of about 30% to ₹100 billion in the current fiscal year. It has also lined up a capital expenditure of ₹25 billion for expanding capacity.
It has signed an MoU with the Maharashtra government to set up a ₹127 billion mega defence and aerospace project in Nagpur. The project aims to expand defence products, including drones, unmanned aerial vehicles, counter-drone systems, and military transport aircraft.
Valuation at a premium
From a valuation standpoint, the company trades at a very high multiple. It trades at a price-to-equity (P/E) multiple of 128x, well above its 10-year median of 45x.
#2 Premier Explosives
Premier Explosives manufactures Industrial explosives and detonators for mining, infrastructure, defence, and the space sector. It also contributes to India’s missile programme, including Akash, Agni, BrahMos, and Astra.
The company is a pioneer in the explosives and defence sectors. It was the first company in India to manufacture explosives and detonating systems indigenously. It is also the first company in the world to produce safe and green NHH detonators on a commercial scale.
Apart from this, it also played a pioneering role in manufacturing propellants for missile programmes. The company also exports explosives to countries like Israel, Greece, Jordan, Thailand, etc.
In addition to manufacturing, it also operates and maintains the Solid Propellant Plants at the Sriharikota Centre of the Indian Space Research Organisation and the Solid Fuel Complex at Jagdalpur of the Defence Research and Development Organisation.
On the financial front, the company’s revenue rose 54% from last year to ₹4.2 billion. Defence accounted for 81% of the revenue, followed by bulk explosives (19%). EBITDA margin declined by 7.6 percentage points to 13.9%, mainly due to a 158% increase in raw material costs.
Despite pressure on margins, net profit grew only 1.5% to ₹0.29 billion. Its order book stood at ₹7.5 billion (as of March 2025), 1.8 times FY25 revenues. 81% of this order book came from the defence sector, followed by explosives (10%) and services (9%).
Expanding capacity for high-explosive materials
Looking ahead, it plans to enhance the production capacity of high-explosive raw materials, including Research Department Explosive (RDX), High Melting Explosive (HMX), Trinitrotoluene (TNT), and Ammonium Perchlorate (AP), among others.
Valuation at premium
The company also plans to increase its participation in missile integration. On the export front, it plans to expand its contribution in industrial and defense explosives. From a valuation standpoint, it trades at a P/E of 115x, way above the 10-year median of 45x.
Premier Explosives Share Price
#3 GOCL Corporation
GOCL, part of the Hinduja Group, is a leader in the energy and commercial explosives industry with over six decades of expertise. It also has a presence in lubricants, mining, real estate, and wind energy sectors.
With an annual manufacturing capacity of 2.7 lakhs metric tonnes of explosives and 192 million initiating devices, GOCL is one of the largest players.
On the financial front, total revenue remained stable at ₹8.4 billion. Energy and explosives made up 65% of revenue, followed by realty (8.5%). However, net profit grew 258% to ₹1.6 billion, mainly due to a reduction in raw material and finance costs.
Looking ahead, GOCL has doubled the explosives installed capacity at the Singrauli facility from 36,000 to 70,000 tonnes. Additionally, it doubles the shelf life of large-diameter slurry explosives, increasing the durability and effectiveness of its products.
However, the company is facing stiff competition from public sector companies in the explosives sector, and fluctuations in raw material prices are hurting margins. Its explosives division incurred a slight loss in FY25.
Diversification to manage margin pressure
To offset margin pressure and intensifying competition, the company is actively pursuing diversification. It aims to monetize 264.5 acres of land over about 18 months and plans to spend the sale proceeds profitably. GOCL has forayed into the realty sector, where it is in the process of developing a Special Economic Zone (SEZ) in Bengaluru.
Additionally, it has recently ventured into electronics manufacturing services. Though it’s still in early stages, the company is seeing growing demand. Thus, it is creating new facilities to cater to mobility business solutions, especially electric charging stations and commercial vehicle components.
Valuation at a discount
From a valuation standpoint, it trades at a P/E of 14x, at a 50% discount to a 10-year median of 28x.
Conclusion
India’s defence-led manufacturing push is opening up long-term opportunities for explosive makers. Solar Industries stands out due to its scale, strong order book, and aggressive expansion, although its steep valuation may warrant caution. Premier Explosives is emerging as a niche player in missile and propellant systems, backed by a healthy defence pipeline, while GOCL is looking to diversify beyond explosives into real estate and EV-linked segments.
But the recent rally in defence stocks means investors may need to be selective. Execution and order flow will be key to watch.
Disclaimer
Note: Throughout this article, we have relied on data from http://www.Screener.in and the company’s investor presentation. Only in cases where the data was not available have we used an alternate but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points, and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only.
About the Author: Madhvendra has been deeply immersed in the equity markets for over seven years, combining his passion for investing with his expertise in financial writing. With a knack for simplifying complex concepts, he enjoys sharing his honest perspectives on startups, listed Indian companies, and macroeconomic trends.
A dedicated reader and storyteller, Madhvendra thrives on uncovering insights that inspire his audience to deepen their understanding of the financial world.
Disclosure: The writer and his dependents do not hold the stocks discussed in this article.
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