Solar Industries ends FY26 with record revenue and a defence-led order book

Solar Industries India Limited closed FY26 with its highest ever revenue and profitability, helped by a sharp rise in defence and steady execution in international markets. For Q4 FY26, net sales rose to INR 3,053 crore from INR 2,167 crore, while EBITDA increased to INR 870 crore from INR 546 crore. Profit after tax for the quarter grew to INR 556 crore versus INR 346 crore.

For the full year, net sales expanded 30% year-on-year to INR 9,838 crore. EBITDA grew 35% to INR 2,750 crore and PAT rose 35% to INR 1,737 crore. The company also reported margin expansion, with FY26 EBITDA margin at 27.95% versus 26.94% in FY25.

The management linked the performance to strong sales from international and defence businesses, higher share of high-value products, and operational efficiencies. This is notable because management also stated there was no growth in the domestic mining markets during the period.

Revenue mix shows defence scaling fast

The company’s customer mix data highlights a material shift toward defence in FY26. Defence revenue nearly doubled to INR 2,634 crore from INR 1,355 crore in FY25, increasing its share of sales to 27% from 18%. International business grew 32% to INR 3,815 crore and remained the largest basket at 39% of FY26 sales.

Domestic coal-linked exposure reduced as a share. CIL contributed 9% of FY26 revenue (INR 924 crore) compared with 13% (INR 960 crore) in FY25.

Order book and FY27 targets

The company disclosed an order book of INR 21,300 crore. In the concall, management stated that around INR 18,000 crore of this order book is defence and around INR 3,000 crore is non-defence. It also indicated that a major part of the defence order book is linked to Pinaka, along with other smaller orders including raw material and intermediate goods for the Indian market and orders from international markets.

Management’s FY27 outlook is explicit. The investor presentation guided to revenue of INR 14,000 crore in FY27 with capex of INR 2,050 crore. The management also said it expects to cross defence revenue of INR 4,500 crore in FY27, and aims to maintain current EBITDA margins.

In the Q&A, management added that excluding defence, domestic and international combined are expected to grow 30% plus. It also described the drivers as 10% to 15% volume growth and about 18% to 20% expected contribution from price increases, citing higher crude or gas prices impacting upstream inputs.

Capital spending, leverage, and working capital signals

Solar continued to invest heavily. FY26 capex was INR 1,556 crore versus INR 1,182 crore in FY25, and the company signaled further acceleration with FY27 capex guidance of INR 2,050 crore.

Borrowings increased alongside expansion. Total debt rose to INR 1,468 crore from INR 946 crore, while net debt moved to INR 867 crore from a net cash position of (276) crore in FY25. The presentation reported net debt to equity at 0.13 and net debt to EBITDA at 0.32.

Working capital also became a management talking point. Management stated working capital days were around 90 to 100 days until Q3, but increased in Q4 due to higher inventory levels. The inventory build was described as deliberate, aimed at mitigating geopolitical uncertainty and maintaining supply chain continuity. Management expects normalization over the next two quarters as conditions stabilize.

On margins, management acknowledged commodity inflation and the practical challenge of passing on input cost increases immediately, even with escalation mechanisms in contracts. It nevertheless guided that current EBITDA margins should be maintained, supported by defence and international mix.

International expansion and defence product pipeline

International strategy remains focused on building manufacturing hubs. Management described South Africa as a hub and cited facilities in Zambia, Tanzania, and Zimbabwe. In West Africa, Nigeria is a base, with Ghana operations started and Sierra Leone expected to start operations in FY27. It also referenced a strong base in Turkey, a Kazakhstan plant, facilities in Thailand and Indonesia, and that Australia is expected to start soon.

In defence, management avoided program-wise detail but did provide selective updates. It stated that Bhargavastra, a counter-drone product, is in the final stage of development. It also mentioned loitering ammunition options in the pipeline and said a 155 mm complete round is in the last stage of trials. The company said its medium calibre ammunition facility is commissioned and it has started supplies for qualification, after which orders are expected.

Takeaways

Solar Industries ends FY26 with a clear mix shift toward defence and international markets, strong profitability, and an expanded order book that is heavily defence-weighted. The FY27 plan is ambitious but specific: INR 14,000 crore revenue and INR 2,050 crore capex, with a stated intent to maintain current margins and scale defence revenue beyond INR 4,500 crore.

The key monitoring points are execution of the elevated capex cycle, working capital normalization after a deliberate inventory build, and how quickly cost escalations flow through contracts in an environment of commodity volatility. The company’s disclosures on order book size and defence contribution provide an anchor for the FY27 narrative, while the international expansion roadmap suggests continued focus on building local capabilities in priority geographies.