Solar Industries reported a significant acceleration in profitability for the first quarter of FY27, achieving its highest-ever quarterly revenue, EBITDA, PBT, and PAT. Driven by robust demand across its explosives and defence segments, the company’s net sales rose 70% year-on-year to ₹3,668 crore, while net profit after tax (PAT) surged 89% to ₹666 crore. This performance reflects strong operational leverage, with EBITDA growing at a faster pace than revenue.

The financial results were filed pursuant to Regulation 30 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The unaudited results cover the quarter ended June 30, 2026.

Financial Performance

Revenue growth was accompanied by improved operating efficiency. EBITDA increased 82% to ₹1,024 crore, expanding the EBITDA margin by 173 basis points year-on-year to 27.91%. Profit before tax (PBT) rose 89% to ₹911 crore.

Cost management remained effective despite higher input volumes. Material consumed grew 70% in line with revenue, keeping the material cost ratio stable at 50.63% of net sales compared to 50.80% in the prior year. Employee costs rose 39% to ₹256 crore, declining as a percentage of sales from 8.53% to 6.97%, indicating favorable operating leverage.

What the Numbers Show

The divergence between revenue growth and employee cost growth highlights significant operating leverage. While sales jumped 70%, employee costs increased only 39%, reducing their share of net sales by 156 basis points. Similarly, other expenses grew 58%, lower than the revenue growth rate, contributing to the expansion in EBITDA margins. This suggests that the company is scaling operations efficiently without proportional increases in fixed overheads.

Segment-wise Revenue

Revenue from domestic explosives customers grew 52% quarter-on-quarter to ₹1,361 crore, accounting for 37% of total sales. International explosives revenue saw a sharper 65% quarter-on-quarter rise to ₹1,364 crore, also representing 37% of the mix. Defence segment revenue more than doubled year-on-year, rising 123% to ₹933 crore, though it constituted a smaller share (26%) of total sales compared to the explosives businesses.

Guidance and Capital Allocation

Management set an ambitious revenue guidance of ₹14,000 crore for FY27. To support this trajectory, the company outlined a planned capital investment of ₹2,050 crore. Approximately ₹450 crore has already been deployed during the first quarter. Key expansion initiatives include the commissioning of the Dhule plant in Western India, significant expansions at the Dholpur facility in North India, and an upcoming new facility in Orissa.

Order Book and Shareholding

The company maintained a healthy order book of ₹21,350 crore, providing visibility into future revenue streams. Key customers include Coal India and Singareni Collieries Company Limited (SCCL).

As of June 30, 2026, promoters held 73.15% of the equity. Institutional investors held a combined stake of approximately 19%, with Mutual Funds and AIFs holding 12.46% and FIIs/FPIs holding 6.42%.

Solar Industries delivered a strong financial performance in the first quarter of FY26, reporting a consolidated net profit attributable to owners of the company of ₹652.55 crore, up significantly from ₹338.70 crore in the same period last year. The company’s revenue from operations surged to ₹3,668.20 crore, compared to ₹2,154.45 crore year-on-year, reflecting robust top-line growth.

The operating efficiency also improved, with earnings before interest and tax (EBIT) rising to ₹902.71 crore from ₹480.70 crore previously. This expansion in operating profit was accompanied by an improvement in operating margin, which widened to 25.74% from 22.23% in the prior year quarter. The net profit margin stood at 18.17%, up from 16.37% in Q1FY25.

What the Numbers Show

The data reveals a clear leverage effect where operating profits grew at a faster pace than revenue. While revenue increased by approximately 70%, EBIT more than doubled, indicating that the company benefited from improved operational efficiencies or favorable product mix during the quarter. This divergence between top-line and bottom-line growth underscores the strength in the company's core profitability metrics.

Additionally, the ultimate holding company partially redeemed ₹2.92 crore worth of non-convertible debentures (NCDs) during the quarter and issued commercial papers amounting to ₹75.00 crore. The group applied Ind AS 29 for its step-down subsidiaries in Turkey, resulting in a restatement impact of ₹25.33 crore debited to other expenses.

The Board of Directors approved the unaudited financial results on August 13, 2026. The statutory auditors, Gandhi Rathi & Co. and S R B C & Co LLP, have carried out a limited review of the results.