Solar Industries India’s share price has climbed strongly through the past six months and sits close to the top of its recent range.

Management has promised 42% more revenue this year while holding the margin. Does the first quarter start on that pace, or does the cost of ammonium nitrate get in the way?

Solar Industries makes industrial explosives for mining and construction, and defence products, rockets, ammunition, propellants and drones. It runs more than 40 plants across nine countries and sells into more than 90. 

The Business Now Has Three Parts

Explosives sold in India, mostly to coal miners; explosives sold overseas, which reached about ₹3,800 crore last year; and defence, which reached ₹2,634 crore from ₹517 crore two years earlier.

In May 2026, management put a set of numbers on the year publicly: consolidated revenue of ₹14,000 crore, up 42%; an operating margin held at 27-28%; capital spending of ₹2,050 crore; defence above ₹4,500 crore; and the overseas explosives business growing about 30%. Behind it sits a defence order book of about ₹18,000 crore, and the company has already delivered Pinaka rockets to the Indian Army, the first private manufacturer to do so.

The complication is ammonium nitrate. It is the main ingredient in industrial explosives, it is about 65% of the raw material bill, and raw materials are roughly half of revenue. Its price has risen sharply, and some customer contracts only reprice after a quarter has passed. Management acknowledged on the same call that this could have “some little bit impact” on the margin.

That makes this quarter the first real test of both halves of the promise. Fourteen thousand crore needs about ₹3,500 crore a quarter; ₹4,500 crore of defence needs about ₹1,125 crore a quarter. The next card carries the lines the research draws under each.

What To Look For

Four checkpoints, each with a line already drawn

  • The whole company, quarterly revenue: ₹3,000 crore
    The full-year target needs about ₹3,500 crore a quarter. Coming in below this line makes the rest of the year very steeply loaded and puts the target at serious risk.
  • Defence, quarterly revenue: ₹900 crore
    The defence target needs about ₹1,125 crore a quarter. Below this line and the annual figure becomes very hard to reach, on the segment that has grown fivefold in two years.
  • Profitability, quarterly operating margin: 25%
    Management has committed to 27-28% for the year. Falling to 25% or below here would mean the raw material cost is passing through more slowly than guided, and the second half has to make it all back.
  • Overseas explosives, quarterly revenue: ₹850 crore
    This business ran at about ₹1,000 crore in the March quarter. Dropping below this line would signal weaker mining demand abroad or a delivery problem, in the steadiest of the three businesses.

Growth, Honestly Measured

The company has told you how its explosives growth splits between selling more and charging more. Two-thirds of it is charging more.

The headline: 30-33%

The growth management targets this year across its explosives businesses, domestic and overseas combined.

The real quantity: 10-15%

The part of that which is more explosives actually sold, on management’s own split.

What sits in between: 18-20%

The part that is price, and that price is largely the ammonium nitrate cost being passed on to customers, not the company charging more for the same work.

This is unusually honest disclosure and it is worth using. Most companies give you a growth number and leave you to guess what is inside it. Here management has said outright that roughly two-thirds of the explosives growth it expects this year is price and one-third is volume.

The distinction matters because passed-through cost is not the same as profit. When a raw material price rises and the company recovers it, revenue goes up and the rupees of profit stay roughly where they were, which means the margin percentage falls even though nothing has gone wrong. That is precisely why the margin checkpoint sits on the previous card next to the revenue one: a strong revenue number and a weak margin can be the same event described twice.

For the volume side, the physical series is the check. Solar supplied 459,549 tonnes of explosives in FY23, 550,092 in FY24 and about 600,000 in FY25. That is the growth that does not depend on what ammonium nitrate costs, and it is the number to look for when the headline is flattering.

The 30-33% growth target and its 10-15% volume / 18-20% price split are management’s own, given in May 2026 for FY2027. The tonnage series is FY2023 to FY2025 and is the most recent physical volume disclosed; the FY2025 figure is reported as approximately 600,000 tonnes.

What Could Go Right (Upside)

Four assumptions are being read here, two outside the company’s control, two resting on its own execution.

Outside The Company’s Control

  • Ammonium nitrate prices settle back. The single biggest input, at about 65% of the raw material bill, and one the company cannot make itself. Prices easing removes the margin question entirely and is worth more to this quarter than anything management can do internally.
  • Indian coal mining demand picks up. Domestic explosives volumes follow how much overburden the coal miners are moving. Management described last year as the bottom of that cycle, which is an assumption about the customer rather than a plan of its own.

The Company’s Own Choices

  • The Pinaka deliveries keep coming. The rocket order is the largest single item in the defence book and deliveries have started. Defence revenue reached ₹1,008 crore in the March quarter alone, so the run-rate needed for the annual target has been hit once already.
  • The new western India plant comes on stream. Management said in May that the large new facility was almost finished. The volume part of this year’s growth, as opposed to the price part, largely depends on that capacity arriving.

What Could Go Wrong (Downside)

The same four assumptions, read from the other side.

Outside The Company’s Control

  • Ammonium nitrate keeps rising and the pass-through lags. The state coal miner buys on lowest-bid tenders and some contracts only reprice after a quarter. The research is explicit that a sharp rise compresses the margin before the escalation clauses catch up, which is what the margin checkpoint tests.
  • Coal demand stays where it was. If the domestic mining cycle has not turned, the volume third of the explosives growth target has to come from overseas alone, and the revenue line leans even harder on price.

The Company’s Own Choices

  • Defence deliveries slip a quarter. Defence revenue is lumpy and depends on the customer accepting deliveries on schedule. One quarter below ₹900 crore makes the annual figure arithmetically difficult, and the research treats it as the point at which the target stops being credible.
  • The capacity arrives late. The year’s plan carries ₹2,050 crore of capital spending against ₹927 crore of cash generated from operations last year, so it is partly funded by borrowing. Spending that money and not getting the output on time is the expensive version of this risk.

Still Unanswered

Three things the disclosures don’t tell you.

Does defence actually earn more than explosives?

The whole case for a higher margin rests on defence being more profitable than the explosives business, and management has consistently declined to publish margins for either. Without them there is no way to tell how much of the rise from about 19% to 28% over three years is the change in mix and how much is simply raw material prices having been kinder.

How fast do the rocket deliveries actually happen?

The Pinaka order is worth about ₹6,084 crore and is the largest single item behind the defence target. No delivery schedule has been published, and neither has how much of it has been supplied so far. It is the most important unknown in the file.

Where does the ammonium nitrate come from?

The company says it buys from multiple global suppliers and does not name countries. Given that this one input is about 65% of the raw material bill and is the thing that decides the margin, which countries it comes from, and what would happen to supply if any of them became difficult to buy from, is a material blank.

Why Should You Care

Almost nothing gets mined or tunnelled in India without a company like this one. Solar supplied about 600,000 tonnes of explosives in FY25, runs more than 40 plants across nine countries and sells into more than 90 countries, and is the first private manufacturer to deliver Pinaka rockets to the Indian Army.