Solar Industries produces and distributes initiating systems, military ammunition, and industrial explosives. Twenty-four percent of the domestic explosives market is owned by the firm. It has grown over the last thirty years from providing mining explosives to creating defense solutions and breaking into the space and aerospace industries.
The Great Pivot: Missiles to Mining
Defense and Aerospace and Industrial Explosives make up the two product portfolio segments. In FY25, defense made up 28% of the portfolio, up from 16% in FY24. 59% came from explosives, while 13% came from initiating systems. The shift indicates that defense is becoming a larger part of the corporate mix.The business increased capacity, pioneered the use of cutting-edge ammunition systems, and supported India's drive for domestic defense manufacturing. High-energy materials like HMX and RDX systems, including the Pinaka platform, are part of its defense offering.
Defense revenue increased 76% year over year to Rs 1,626 crore in 9MFY26, accounting for 24% of total sales. Defense revenue increased from Rs 517 crore in FY24 to Rs 1,355 crore in FY25, a 162% increase. Higher growth rates and scale are both reflected in the increase. Order visibility is still available.
The Export Engine: Expanding Outside of India
The order book was around Rs 21,000 crore as of Q3FY26, with defense accounting for more than Rs 18,000 crore. About Rs 11,000 crore of this came from exports, while the remaining Rs 6,500–7,000 crore came from India.

The NATO Play: Resolving the World's 155mm Shell Crisis
To fulfill demand, Solar is branching out into medium- and high-caliber ammunition. According to industry reports, there is a worldwide shortage of 155mm ammunition, and because of the requirement for replenishing, demand is predicted to remain stable for six to seven years.
NATO field artillery is often calibrated in the 155mm range. Access to European markets is made possible by Solar's presence in NATO partner Turkey. Over the past year, the company has been working on 155mm ammunition. Scale production is supported by its Nagpur facility, which is the largest single-location cartridge plant in the world.
Following final qualification approval, the business anticipates beginning commercial production of 155mm artillery shells in Q4FY26. It anticipates a rise in sales starting in FY27.

Pinaka: A Revenue Moat of Rs 6,000 Crore for 2030
The Pinaka multiple rocket launcher system was tested by Solar, the first Indian business to do so. The Ministry of Defense awarded it a Rs 6,084 crore contract to deliver Area Denial Munitions and Pinaka Enhanced Range rockets.
Commercial deployments are planned for Q4FY26 following trial completion. The management anticipates that this will boost defense income and assist in reaching the Rs 3,000 crore annual defense revenue target. The agreement offers long-term revenue visibility over a period of seven to ten years.To increase the range of products, the company intends to offer variations to the Pinaka line. Additionally, it takes part in national initiatives like the Kusha air defense system and the Man-Portable Anti-Tank Guided Missile. These programs can be added to the order pipeline if they are secured.
Runways and UAVs: The Next Big Thing in High Technology
Medium Altitude Long Endurance unmanned aerial vehicles are another area in which Solar is growing. This is consistent with its entry into unmanned systems and aerial platforms. India's first private-sector military drone testing runway was just opened.The defence and aerospace capital expenditure of Rs 12,700 crore
The company's emphasis on cutting-edge defense technologies is reflected in these ongoing projects. In order to establish a defense and aerospace project in Nagpur with a planned capital expenditure of Rs 12,700 crore over ten years, it signed a memorandum of understanding with the Maharashtra government.
Building integrated manufacturing capabilities is the goal of the investment. Over the next three to five years, Solar aims to increase annualized sales by at least 20%. Increased defense revenue could boost profitability and margin.
Over the next three to five years, management anticipates margins in the 27–28% area. In 9MFY26, the EBITDA margin was 27.7%, up from roughly 27.8% in the previous year.In 9MFY26, net sales increased 26% year over year to Rs 6,785 crore, with exports accounting for Rs 2,809 crore, or 41%. At Rs 1,181 crore, net profit rose by 25%.
Does the Growth Have a Price Already?
Solar is trading at 82 times price-to-equity at Rs 13,146 a share, which is higher than its five-year median of 69 times. Revenue visibility is supported by the Pinaka pipeline, the introduction of 155mm ammunition, and the growing defense share. These elements are reflected in the current valuation, hence the most important aspect to keep an eye on is execution.