Bhargavastra to Rudrastra: Solar Industries (NSE: SOLARINDS) is no longer just about mining explosives

Why is Solar Industries India gaining momentum in the defence sector?

Solar Industries India Limited (NSE: SOLARINDS) has emerged as one of the most watched defence manufacturers in the Indian midcap space following the release of its record FY25 results. With consolidated revenue of ₹7,540 crore and a 47% surge in net profit to ₹1,288 crore, the Nagpur-based energetic materials manufacturer is no longer just a commercial explosives player. What’s captured investor imagination is its explosive growth in defence revenues, which jumped 162% year-on-year to ₹1,360 crore.

More importantly, the management has guided to ₹3,000 crore in defence revenue for FY26, implying another doubling in less than 12 months. Aided by Make in India momentum, missile-grade energetic material expertise, and a new suite of proprietary unmanned and anti-drone systems, Solar Industries is now firmly positioned in the strategic supply chain for Indian defence forces and international buyers alike.

How did Solar Industries transition from mining explosives to ammunition leadership?

The foundation of Solar Industries’ defence pivot lies in its core materials competency. The company has long dominated the commercial explosives segment through Economic Explosives Limited (EEL), a subsidiary that supplied to Coal India and global mining firms. This deep understanding of energetic materials, combined with an early-mover advantage, helped it transition into the tightly regulated defence sector with speed and precision.

The first step came through participation in the Pinaka Multi Barrel Rocket Launcher (MBRL) programme, where EEL became a key supplier of booster and sustainer propellants. Solar Industries then built on this to produce warheads and fill explosives for indigenously developed missiles. Between FY23 and FY25, the firm scaled its manufacturing infrastructure, set up testing facilities, and vertically integrated critical components, reducing its dependency on imported inputs.

In FY25, its defence business reached ₹1,360 crore compared to just ₹520 crore a year prior. This not only changed its segment mix but also lifted EBITDA margins from 23.3% in FY24 to 26.9% in FY25.

What are Solar Industries’ key technologies and defence platforms?

Solar Industries now controls a portfolio of next-generation defence products under its wholly owned arm, Solar Defence and Aerospace Limited (SDAL). At the core is Bhargavastra, a loitering micro-missile system designed to neutralise drone swarms at short range. Featuring a kinetic warhead and AI-based autonomous targeting, it represents the first hit-to-kill system of its kind designed and developed in India.

The Rudrastra VTOL UAV, successfully tested at the Pokhran range in early June 2025, is another key platform. With 90-minute endurance, over 170 km operational range, and loiter-strike capability, Rudrastra fills a critical gap in India’s drone strike and ISR capabilities.

Economic Explosives Limited continues to supply core booster components for the BrahMos missile and charges for grenade systems. Solar Industries has also developed artillery shells, aerial bombs, and hand grenades which are now part of its export catalogue. It is one of the few Indian firms to manufacture complete loitering munitions with in-house warhead integration, a differentiator in international tenders.

How is Solar Industries performing financially, and what’s driving investor sentiment?

Solar Industries ended FY25 with its highest-ever financial performance across all key metrics. Revenue rose 24% year-on-year to ₹7,540 crore, EBITDA grew to ₹2,031 crore, and net profit surged to ₹1,288 crore. PAT margins stood at 17.1%, aided by the high-margin nature of defence products and reduced raw material import dependency.

The defence order book has grown substantially—from ₹4,970 crore in Q3 to approximately ₹15,200 crore by Q4 FY25. Management has guided for ₹3,000 crore in defence revenue in FY26 alone, implying over 100% growth yet again. The firm also reported ₹2,900 crore in export revenue in FY25, further diversifying its geographic footprint.

Investor sentiment has remained strong throughout 2025, with the stock up over 40% year-to-date. Brokerage houses have assigned forward PE multiples of 60x FY27 earnings, with target prices above ₹15,000. While premium compared to defence PSUs like Bharat Dynamics Limited, analysts justify it based on superior margins, faster growth, and private-sector execution agility.

Where is Solar Industries exporting defence products—and how fast is it scaling?

One of the most underappreciated aspects of Solar Industries’ transformation is its rapid rise as a defence exporter. In FY25, it shipped over ₹2,900 crore worth of munitions and explosives to more than 10 countries, including clients in Africa, Southeast Asia, and Eastern Europe. Export items ranged from high-calibre artillery shells and grenades to loitering munitions and aerial bombs.

The company also fulfilled repeat orders for hand grenades from the Middle East and is competing in tenders for anti-tank and guided munitions with smaller payloads. What gives it a competitive edge is that most products are designed for tropicalised conditions and rapid-deployment logistics. Unlike large Western OEMs, Solar Industries can manufacture low-volume, quick-turn contracts with full in-house testing capabilities.

Management has noted that export contribution to defence revenue could rise to 40% by FY27. It is also actively pursuing government-to-government supply agreements under the Ministry of External Affairs’ defence diplomacy push.

How does Solar Industries compare to Bharat Dynamics and other ammunition players?

Solar Industries India Limited now competes not just with state-run arms companies but with global ammunition suppliers. Bharat Dynamics Limited remains dominant in missile assembly and seeker-based guidance systems. However, Solar Industries leads in volume production of energetic components and loitering weapons. Its margin profile is stronger—EBITDA at 26.9% in FY25 compared to BDL’s 21.4%—and its export share is materially higher.

Compared to Munitions India Limited (the OFB successor), Solar has greater vertical integration and product flexibility. Its ability to develop and deliver new platforms like Bhargavastra without lengthy state procurement cycles is a key institutional differentiator. Internationally, the firm is now being benchmarked against small-to-mid-sized European defence suppliers like Rheinmetall’s ammo divisions and Diehl’s smart loitering system arm.

With upcoming collaborations likely under DRDO’s Make-III framework, Solar could expand further into air-dropped bomb systems and UAV-based weapons—a segment where its privately developed Rudrastra platform offers first-mover advantage.

What are Solar Industries’ growth drivers for FY26 and beyond?

The path forward for Solar Industries is anchored on five core drivers. First, order fulfilment for Bhargavastra and Rudrastra is expected to begin in FY26, contributing meaningfully to topline. Second, the ₹3,000 crore revenue guidance for defence suggests continued margin expansion, especially as new orders tilt toward proprietary systems. Third, expansion of manufacturing units in Maharashtra and Nagpur will enhance capacity across smart munitions and drone platforms.

Fourth, Solar’s institutional visibility is growing, with multiple fund houses initiating or increasing exposure following its Q4 results. Lastly, Make-in-India policies, the ₹50,000 crore export target set by the Ministry of Defence, and the inclusion of more munitions in the Positive Indigenisation List will provide Solar with structural tailwinds for the next 3–5 years.

Solar Industries India Limited has redefined what a midcap manufacturing firm can achieve in the defence sector. From its origins in mining explosives, it has built a vertically integrated, IP-rich business that now stands at the intersection of national defence, export diplomacy, and technological innovation. With proprietary platforms, export traction, and rising institutional credibility, Solar Industries is no longer just a supplier—it is emerging as a flagship private player in India’s next-generation defence manufacturing ecosystem.