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Solar Industries slides 11% after explosion at Nagpur plant kills 9

The factory, as per reports, produces products for like industrial and military explosives, as well as propellants and warheads

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SI Reporter New Delhi

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Shares of Solar Industries India tumbled 10.5 per cent to Rs 6,155 apiece on the BSE in Monday's intraday trade after an explosion incident claimed nine lives at the company's Nagpur plant. 

At 10:35 AM, however, the shares had trimmed most of the losses and were trading 1.6 per cent lower at Rs 6,766 per share as against 0.02 per cent rise in the benchmark S&P BSE Sensex. 

"This is to inform you that an explosion incident has occurred on December 17, 2023, at around 9:00 AM. in one of our processes Building No. HRCPCH-2 (Pallet Casting House). The incident has resulted in loss of lives of nine workmen working in the plant," Solar said in an exchange filing.
 

The factory, as per reports, produces products for like industrial and military explosives, as well as propellants and warheads.

The company said, it has intimated the concerned departments and statutory authorities. "The incident is being investigated for all the root and contributory causes, and corrective and preventive actions to be implemented. As far as financial impact is concerned, the loss is limited to this one particular building only," it added.

Solar Industries was founded in 1995, and has since then evolved from a single site manufacturing company to a globally recognised Industrial Explosives manufacturer.

The company has entered into Defence, and has setup one of the world's most integrated facilities for Ammunition. 

Meanwhile, reports suggest, the state government announced financial assistance of Rs 5 lakh to the families of the deceased.

Financial results
The company reported total income of Rs 1,355.18 crore for the September quarter as compared to Rs 1,570.96 crore last year.

The company, however, posted net profit of Rs 200.14 crore for the said period as against net profit of Rs 176.38 crore for the period ended September 30, 2022.

SOIL's market share in India has increased to 27-28 per cent vs 24-25 per cent earlier while the same for the second best player in India stood at 12-13 per cent, analysts at Nirmal Bang said in a recent report. 

"With SOIL setting up plants in North-Western and Southern India, we believe there is further scope of market share gains as SOIL's market share in these geographies is lower. SOIL has gained market share in Turkey, and is currently No 1 player vs No 11-12 player few years ago," it added.

With Defence growing faster than rest of the businesses, contribution from Defence is expected to touch 15 per cent of revenue by FY26 vs 5.7 per cent in FY23. SOIL remains a key beneficiary of ongoing defence privatisation theme.

"We expect SOIL to register 15 per cent/24 per cent/29 per cent revenue/Ebitda/PAT CAGR over FY23-FY26E. Healthy growth and margin prospects, Defence scale-up, and high regulatory entry barriers will aid its valuation," the brokerage said with a 'buy' call and a target of Rs 7,665.

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First Published: Dec 18 2023 | 11:02 AM IST

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