1. CMP 3736.60
Target Price 4150.00
ISIN: INE343H01011
JULY 4th
, 2015
SOLAR INDUSTRIES INDIA LTD
Result Update (CONSOLIDATED): Q4 FY15
BUYBUYBUYBUY
Index Details
Stock Data
Sector Specialty Chemicals
BSE Code 532725
Face Value 10.00
52wk. High / Low (Rs.) 3890.00/1880.00
Volume (2wk. Avg.) 187
Market Cap (Rs. in mn.) 67624.99
Annual Estimated Results (A*: Actual / E*: Estimated)
YEARS FY15A FY16E FY17E
Net Sales 13518.95 15344.01 17031.85
EBITDA 2619.22 2896.49 3180.15
Net Profit 1474.08 1634.07 1795.69
EPS 81.45 90.29 99.22
P/E 45.88 41.38 37.66
Shareholding Pattern (%)
1 Year Comparative Graph
SOLAR INDUSTRIES INDIA LTD S&P BSE SENSEX
Highlights
Solar Industries India Ltd (SIIL) founded in 1995, is
one of the largest comprehensive explosives &
initiating devices manufacturing company in India.
The company’s Net Sales rose by 14.61% y-o-y of
Rs. 3896.36 million for the 4th quarter of the FY15
as against Rs. 3399.57 million for the prior period of
Last year.
In Q4 FY15, Net profit of the company registered a
growth of 1.52% y-o-y to Rs. 401.01 million from
Rs. 395.00 million in Q4 FY14.
Earning before Interest, Tax and Dep was at Rs.
702.35 million for the 4th quarter of FY15 as against
Rs. 691.39 million in the corresponding quarter of
the previous year.
Profit before tax (PBT) at Rs. 530.53 million in Q4
FY15 compared to Rs. 498.25 million in Q4 FY14,
registered a growth of 6.48%.
The company has recommended Final Dividend of
Rs. 9.00/- per Share on face Value of Rs.10.00 each,
for the Financial Year 2014-15.
During the quarter, CRISIL has Upgrade its rating on
the Long term Borrowings of the company to CRISIL
AA/stable from CRISL AA-/ Positive. Rating of Short
Term Borrowings of the company to CRISIL A1+.
PAT grew by 24% to Rs 1474.08 million for the end
of FY15 from Rs 1184.41 million for the end of
FY14.
Net Sales and PAT of the company are expected to
grow at a CAGR of 11% and 13% over 2014 to
2017E respectively.
PEER GROUPS CMP MARKET CAP EPS P/E (X) P/BV(X) DIVIDEND
Company Name (Rs.) Rs. in mn. (Rs.) Ratio Ratio (%)
Solar Industries India Ltd 3736.60 67624.99 81.45 45.88 8.72 170.00
BASF India Ltd 1176.95 50945.00 - - 4.31 40.00
Pidilite Industries Ltd 544.10 278939.80 9.79 55.58 10.98 290.00
Styrolution ABS (India) Ltd 592.50 10419.50 16.49 35.93 2.03 40.00

2. QUARTERLY HIGHLIGHTS (CONSOLIDATED)
Q4 FY15,
Rs. In millions Mar-15 Mar-14 % Change
Net Sales 3896.36 3399.57 14.61
Net Profit 401.01 395.00 1.52
EPS 22.16 21.83 1.52
EBITDA 702.35 691.39 1.59
Solar Industries India Ltd achieved a turnover of Rs. 3896.36 million for the 4th quarter of the financial year 2015
as against Rs. 3399.57 million in the corresponding quarter of the previous year. The company has reported an
EBITDA of Rs. 702.35 million against Rs. 691.39 million in prior period of last year. For Q4 FY15, net profit was at
Rs. 401.01 million, an increase of 1.52% y-o-y against Rs. 395.00 million in the corresponding quarter of the
previous year. The company has reported an EPS of Rs. 22.16 for the 4th quarter as against an EPS of Rs. 21.83 in
the corresponding quarter of the previous year.
Break up of Expenditure
Particulars Q4 Y15 Q4 FY14 CHNG %
Consumption of Material 2203.02 1768.91 25%
Employee Benefit Exp 210.35 187.13 12%
Depreciation 114.12 54.21 111%
Other Expenditure 631.68 838.48 -25%
Purchase of Stock in
Trade
184.65 0.00 -

3. COMPANY PROFILE
Solar Industries India Ltd. (SIIL) has grown to become India's largest manufacturer of Industrial explosives and
Explosive initiating systems and spreading its presence to Global Markets. Solar headquartered at Nagpur offers
high-quality products and services that are backed by stringent safety standards, a robust infrastructure, and a
proven quality management system. The company supports major mining & infrastructure companies including
the recognized names like Coal India Limited, Vedanta, Tata, Jindal, SAIL, L&T, Anglo Gold and many more. Solar's
manufacturing facilities span 17 locations across India along with 2 manufacturing units in Africa are
strategically located; one each in Nigeria and Zambia. Its 3rd overseas plant is strategically located at Turkey. The
company is in process of developing specific products for the Defence Sector using the expertise available and is
positive on the prospects and potential of its business, and expects to grow at a rate higher than the general
economic growth.
Manufacturing capacity
Solar Industries India has expanded its manufacturing capacities in-line with thisgrowing demand. Over the last
five years, the company has significantly enhanced its capacity in India and the current capacity stands at
2,19,240 MT per annum of Bulk Explosives, 74,655 MT per annum of Cartridge Explosives, 190 Million Nos.
perannum of Detonators and 75 Million Mtrs. per annum of Detonating Cord.
Products
• Cartridge explosives
• Detonators
• Detonating cord
• Cast booster
• Multi-layer Shock Tubes
• underground Bulk
• Explosives for military Application
• Pyros
• Propellants
• Ammunitions
Global Network
Currently own and operate the world’s largest single-location manufacturing capacity for Cartridge explosives
besides India’s largest manufacturing capacity for Bulk explosives. The company is also the largest exporter of
explosives from India with overseas manufacturing units in Nigeria and Turkey. Solar products and services have
successfully captured the needs and expectations of its valuable customers in India and abroad. With willingness
and a continuous zeal to explore growth frontiers, the company is expanding the horizons of growth by further
scaling up the domestic manufacturing capacities and by spreading its wings outside India. currently exporting
its entire range of products to more than 22 countries globally, a jump of 47% from 15 countries in 2009-10 and
are growing at a steady pace.

4. Key Customers
• ACC
• TATA
• Ultratech
• UCIL
• Vedanta
• Border Roads Organization
• Coal India Limited
• Oil and Natural Gas Corporation (ONGC)
• Steel Authority of India Limited (SAIL)
• Singareni Collieries Company Limited
• National Hydroelectric Power Corporation
(NHPC)
Awards & Certificates
The company Received special award from CAPEXIL for exports of detonator/detonating fuses and safety fuses.
Key process and operating standard certificates such as ISO 9001:2000, ISO 14001: 2004, OHSAS 18001:2007
and CE certification. The company is the Member of SAFEX International, an apex body promoting best practices
on safety standards in the global explosives industry.

5. FINANCIAL HIGHLIGHT (CONSOLIDATED) (A*- Actual, E* -Estimations & Rs. In Millions)
Balance Sheet as at March 31st, 2014 -2017E
SOLAR INDUSTRIES INDIA LTD FY14A FY15A FY16E FY17E
EQUITY AND LIABILITIES:
Shareholders’ Funds:
• Share Capital 180.98 180.98 180.98 180.98
• Reserves and Surplus 6434.76 7577.85 8752.42 9933.99
a) Net worth 6615.74 7758.83 8933.40 10114.97
b) Minority Interest 381.03 471.42 523.28 575.60
Non-Current Liabilities:
• Long-term borrowings 1523.67 1559.33 1599.87 1625.47
• Deferred Tax Liabilities [Net] 270.10 443.51 567.69 658.52
• Other Long Term Liabilities 0.43 0.40 0.64 0.84
• Long Term Provisions 12.73 11.46 10.66 10.02
c) Total Non – Current Liabilities 1806.93 2014.70 2178.86 2294.86
Current Liabilities:
• Short-term borrowings 2903.76 1725.48 1069.80 716.76
• Trade Payables 385.22 626.32 751.58 841.77
• Other Current Liabilities 1305.56 1215.24 1142.33 1080.64
• Short Term Provisions 126.70 79.91 54.34 39.12
d) Total Current Liabilities 4721.24 3646.95 3018.05 2678.30
Total Liabilities (a+b+c+d) 13524.94 13891.90 14653.58 15663.74
ASSETS
Non-Current Assets:
Fixed Assets
i. Tangible Assets 5648.24 6459.15 6975.88 7492.10
ii. Intangible Assets- Goodwill 71.00 0.00 0.00 0.00
• Sub-Total Fixed Assets 5719.24 6459.15 6975.88 7492.10
• Other non-current assets 202.75 387.57 484.46 591.04
• Non Current Investments 101.67 77.28 62.60 59.47
• Long Term Loans and Advances 844.50 866.97 884.31 893.15
e) Total Non-Current Assets 6868.16 7790.97 8407.25 9035.76
Current Assets:
• Current Investments 150.20 296.33 361.52 433.83
• Inventories 1528.26 1648.80 1731.24 1807.96
• Trade Receivables 1853.41 1912.97 1958.88 2056.83
• Cash and Bank Balances 1330.16 372.74 269.95 278.05
• Short Term Loans and Advances 580.24 691.19 774.13 859.29
• Other Current Assets 1214.51 1178.90 1150.61 1192.03
f) Total Current Assets 6656.78 6100.93 6246.33 6627.98
Total Assets (e+f) 13524.94 13891.90 14653.58 15663.74

6. Annual Profit & Loss Statement for the period of 2014 to 2017E
Value(Rs. mn) FY14A FY15A FY16E FY17E
Description 12m 12m 12m 12m
Net Sales 11329.59 13518.95 15344.01 17031.85
Other Income 111.57 79.05 88.54 97.39
Total Income 11441.16 13598.00 15432.54 17129.24
Expenditure -9299.81 -10978.78 -12536.05 -13949.08
Operating Profit 2141.35 2619.22 2896.49 3180.15
Interest -178.57 -178.51 -185.65 -196.79
Gross profit 1962.78 2440.71 2710.84 2983.36
Depreciation -218.69 -314.53 -377.44 -434.05
Exceptional Items -100.01 -100.01 -108.01 -115.57
Profit Before Tax 1644.08 2026.17 2225.39 2433.74
Tax -349.04 -462.83 -496.26 -537.86
Profit after Tax 1295.04 1563.34 1729.13 1895.88
Minority Interest -110.63 -89.26 -95.06 -100.20
Net Profit 1184.41 1474.08 1634.07 1795.69
Equity capital 180.98 180.98 180.98 180.98
Reserves 6434.76 7577.85 8752.42 9933.99
Face value 10.00 10.00 10.00 10.00
EPS 65.44 81.45 90.29 99.22
Quarterly Profit & Loss Statement for the period of 30th Sept, 2014 to 30th June, 2015E
Value(Rs. mn) 30-Sep-14 31-Dec-14 31-Mar-15 30-Jun-15E
Description 3m 3m 3m 3m
Net sales 2955.00 3198.49 3896.36 3997.67
Other income 32.02 11.37 20.16 10.48
Total Income 2987.02 3209.86 3916.52 4008.15
Expenditure -2385.32 -2598.81 -3214.17 -3270.09
Operating profit 601.70 611.05 702.35 738.06
Interest -46.50 -52.64 -32.70 -38.59
Gross profit 555.20 558.41 669.65 699.47
Depreciation -67.94 -66.06 -114.12 -108.87
Exceptional Items -25.00 -25.00 -25.00 -25.00
Profit Before Tax 462.26 467.35 530.53 590.60
Tax -115.55 -97.90 -110.66 -135.72
Profit after Tax 346.71 369.45 419.87 454.88
Minority Interest -24.18 -15.77 -18.86 -16.60
Net Profit 322.53 353.68 401.01 438.28
Equity capital 180.98 180.98 180.98 180.98
Face value 10.00 10.00 10.00 10.00
EPS 17.82 19.54 22.16 24.22

7. Ratio Analysis
Particulars FY14A FY15A FY16E FY17E
EPS (Rs.) 65.44 81.45 90.29 99.22
EBITDA Margin (%) 18.90% 19.37% 18.88% 18.67%
PBT Margin (%) 14.51% 14.99% 14.50% 14.29%
PAT Margin (%) 11.43% 11.56% 11.27% 11.13%
P/E Ratio (x) 57.10 45.88 41.38 37.66
ROE (%) 19.58% 20.15% 19.36% 18.74%
ROCE (%) 21.37% 26.57% 28.22% 29.01%
Debt Equity Ratio 0.67 0.42 0.30 0.23
EV/EBITDA (x) 32.96 26.82 24.05 21.78
Book Value (Rs.) 365.55 428.71 493.61 558.90
P/BV 10.22 8.72 7.57 6.69
Charts

8. OUTLOOK AND CONCLUSION
At the current market price of Rs. 3736.60, the stock P/E ratio is at 41.38 x FY16E and 37.66 x FY17E
respectively.
Earning per share (EPS) of the company for the earnings for FY16E and FY17E is seen at Rs.90.29 and
Rs.99.22 respectively.
Net Sales and PAT of the company are expected to grow at a CAGR of 11% and 13% over 2014 to 2017E
respectively.
On the basis of EV/EBITDA, the stock trades at 24.05 x for FY16E and 21.78 x for FY17E.
Price to Book Value of the stock is expected to be at 7.57 x and 6.69 x respectively for FY16E and FY17E.
We recommend ‘BUY’ in this particular scrip with a target price of Rs.4150.00 for Medium to Long term
investment.

9. INDUSTRY OVERVIEW
The explosives industry is an important and vital constituent of the India Inc. growth story. The industry acts like
a catalyst in the processes of mining and infrastructure development activities such as Tunneling, Road
construction, Dams, Canals, Well sinking, etc.
The global explosives industry is estimated to be worth US$ 10 Billion. With a market share of 5% and size of
3,100 Crore, India ranks as the 8 largest industrial explosives market in the world. India is also counted among
the fastest growing market for explosives.
The explosives industry is highly regulated in India and capacities are established purely on license basis. The
industry can be divided into three broad categories
a) Packaged Explosives
b) Bulk Explosives
c) Initiating Systems.
The demand for explosives in India is largely from the mining industry which accounts for ~ 80% of the total
consumption of industrial explosives. The balance is accounted by the infrastructure and construction sector.
Within the mining space,coal alone accounts for more than 70% of the explosives consumed in India, of which
Coal India singularly consumes bulk of this production. The Explosives industry in India is very fragmented with
more than 30 players. However, only 7companies account for a lion’s share of the production.
Mining Industry Overview
Global Mining Industry
The mineral mining industry since 2001 to 2011 has posted a CAGR growth of 3.9%, as per World Mining
Congress. China, the world’s largest consumer of minerals, accounts for ~40-50% share of the total global
mineral consumption. China has to rely on imports for many key minerals where it is a key importer of copper,
iron ore and coking coal. The share of Asia in the total world’s mineral production has moved up from 45.4% to
58.2% during the same period.
Indian Mining Industry
India has huge reserves of various natural minerals and is amongst the 4th (after China, US and Russia) largest
mineral producing nations in the world. There is a huge demand for mined minerals in, both, the domestic
market as well as the exports market. However, the contribution of mining has declined, from 3.0% of GDP in
1999-2000 to 2.0% in 2012-13. This is due to lack of transparency in various mining regulations which has

10. proved to be a major hurdle for growth of this highly potent industry. During the year the mining activities has
witnessed a slowdown with -0.8% growth in mining IIP.
Coal
India is estimated to have abundant coal reserves (~ 293 Billion tones) and Coal is the largest source of energy in
India with53% share in the total energy consumption. Of the total demand of coal in India, 75% is consumed by
power sector alone.
With lion’s share of 81%, Coal India Limited (CIL) is not onlyIndia’s but also the world’s largest coal mining
company. Coal India is contributing significantly towards the growth of coal production in India. During the year
2013-14, Coal India’s total production stood at 462 million tonnes, up from 452 million tonnes in 2012-13. Coal
India has targeted production of 507 million tonnes for the year 2014-15 which would lead to heightened
demand for explosives. India has a burgeoning demand for coal as India’s power capacity is expected to increase
significantly from around 230 GW in 2013 to around 319 GW by 2017. Higher production of coal implies higher
requirements of explosives, auguring well for the Company.
Iron Ore
Steel production capacity in India has been significantly ramped up from 66 million tonnes in 2009 to about 90
million tonnes in 2013. With strong demand from the infrastructure sector, the largest consumer of steel in India,
the demand for steel is expected to remain high. To cater to the rising demand, it is expected that by 2020, the
total steel production capacity in India would touch 200 million tonnes.
Iron ore is an important raw material for making steel and approximately 1.6 to 1.7 tonnes of iron ore is required
to make one tonne of steel. Over the last two years production of iron ore in India has contracted, due to
regulatory issues. From the highs of 219 in 2009-10 the production is estimated to have fallen to 135 in 2013-14.
However, with number of mines in Karnataka & Goa receiving clearances the production is expected to jump to
182 in 2014-15. With the growth of the iron ore mining industry demand for explosives will also grow.
Limestone
Limestone is one of the key materials used in manufacturing of cement. The total cement capacity in India as of
March 2014 stands at around 363 million tonnes and is the second largest market in the world after China. With
huge investments expected in the construction sector the demand for cement expected to remain robust. To meet
the growing demand in India a report of the working group on cement industry for twelfth five year plan has
projected that the total cement capacity would jump to more than 440 million tonnes by the end of 2017. This
auger well for the Company as with a rising demand for limestone there would be higher demand for explosive
for mining them.

11. Defence
According to a report released by the Stockholm International Peace Research Institute (SIPRI) India is the
world’s largest arms importer. The total arms import in India, over the past five years as compared to 2004–08,
has increased by 111% and it now accounts for 14% of the total world’s arms imports annually
To reduce significant outflows of valuable foreign currency as well as to promote domestic growth of the
industry the Government has put forth the defence procurement policy 2013. Under this policy, all Government
procurements hereon would need to have a minimum 30% (of such purchases) with indigenous content. This
has opened up new business opportunities for the Company.
Outlook
The new Government in India, with a strong majority is highly committed towards giving a major boost to the
growth of infrastructure, construction and mining activities. The recent initiatives by the new government such
as online green clearance for big projects, increasing validity of industrial licenses and better governance has
bought life back in the infrastructure sector. This will lead to higher demand for steel, cement and power; giving
a push to the industrial explosives industry.
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This document is prepared by our research analysts and it does not constitute an offer or solicitation for the
purchase or sale of any financial instrument or as an official confirmation of any transaction. The information
contained herein is from publicly available data or other sources believed to be reliable but we do not represent that
it is accurate or complete and it should not be relied on as such. Firstcall Research or any of its affiliates shall not be
in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the
information contained in this report. Firstcall Research and/ or its affiliates and/or employees will not be liable for
the recipients’ investment decision based on this document.

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