Trinetra Asset Managers

SEBI Registered Research Analyst | INH000015783

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[Trinetra Asset Managers @TrinetraAsset]

Post restructuring, AXISCADES becomes more focused around four pillars:

1. Aerospace Manufacturing, SCM and MRO
2. Defence Manufacturing and System Integration
3. ESAI/XiDA
4. Space and satellite bus/system integration

Cleaner structure. More strategic focus.

The revenue reset is real.

AXISCADES is transferring out meaningful services revenue.

So reported revenue may fall before acquisitions and manufacturing-led revenue scale up.

But this appears intentional, not accidental.

The company is not exiting Aerospace, Defence, ESAI or Space.

It is exiting services-heavy or non-core parts of the portfolio and redirecting capital towards manufacturing-led and product-led areas.

The bet is on quality of revenue, not just size of revenue.

Key risks to track:

· Closing delays
· Contingent payments not materializing
· Lower net proceeds after tax/costs
· Revenue gap during transition
· Acquisition quality
· Manufacturing execution
· Stranded costs
· Capital allocation discipline

Bottom line:

AXISCADES is selling services to fund manufacturing.
The cash proceeds are the fuel for the next phase.

The opportunity is significant, but execution and capital allocation will decide whether this restructuring creates long-term value.

My view:

This should be analysed less as a simple revenue loss and more as a services-to-manufacturing capital redeployment.

Near-term optics may look weak.

Medium-term value depends on how well AXISCADES deploys ~₹1,672–2,243 crore of gross proceeds.

#Trinetra #Investing #Axiscades #Defence #Aerospace

[Trinetra Asset Managers @TrinetraAsset]

AXISCADES Technologies has announced a major restructuring.

The company is monetising Engineering Services revenue and reallocating capital towards Aerospace Manufacturing, Defence, ESAI/XiDA, Space and strategic electronics.

This is not just a divestment. It is a capital redeployment story.

The key thesis is simple:

AXISCADES is selling services-heavy businesses to fund manufacturing-led, product-led and systems-led platforms.

Near-term revenue will reset.

But the company may become sharper, better capitalised and more strategically aligned.

There are two divestments to Akkodis:

a. Aerospace Engineering Services
b. Non-core Engineering Services covering Heavy Engineering, Automotive and Energy

Together, these can potentially unlock up to ~₹2,243 crore gross cash.

[Trinetra Asset Managers @TrinetraAsset]

The important point:

This is not idle cash.

The proceeds are expected to fund AXISCADES’ transition from services-led revenue to manufacturing-led, product-led and systems-led revenue.

That is the heart of the restructuring.

Management’s broad capex and acquisition roadmap:

DAC: ~₹1,200 crore
MAC, Hyderabad: ~₹300 crore
DAL: ~₹120–150 crore already spent
Planned acquisitions: ~₹600 crore

[Trinetra Asset Managers @TrinetraAsset]

10/
The revenue reset is real.

AXISCADES is transferring out meaningful services revenue.

So reported revenue may fall before acquisitions and manufacturing-led revenue scale up.

But this appears intentional, not accidental.

[Trinetra Asset Managers @TrinetraAsset]

9/
Post restructuring, AXISCADES becomes more focused around four pillars:
a. Aerospace Manufacturing, SCM and MRO
b. Defence Manufacturing and System Integration
c. ESAI/XiDA
d. Space and satellite bus/system integration

Cleaner structure. More strategic focus.

[Trinetra Asset Managers @TrinetraAsset]

Ground Research Note – JSLL Surat Centre Visit

As part of our ongoing ground research on Jeena Sikho Lifecare Limited (JSLL), one of our team members recently visited the company’s Surat facility to understand patient traction, footfall, service quality, and the overall operating environment.

The Surat centre is a 25-bed hospital and day-care facility located in a prime commercial area of Surat. The facility operates from a leased property, and our team member observed significant JSLL branding throughout the building. The company has rented the upper floors for its hospital and clinic operations.

During the visit, healthy patient activity and strong occupancy levels were observed. Based on on-ground observations and interactions, the centre appears to receive approximately 100–150 visitors daily. The facility remained busy throughout the visit, indicating strong patient traction and utilisation.

To better understand the patient experience, our team member visited the centre as a prospective patient enquiring about Panchakarma treatment. At the reception, the staff asked detailed questions regarding existing health conditions, ongoing treatments, and whether any allopathic medicines were being taken. The interaction appeared professional and patient-centric.

The staff also informed that certain treatments may be eligible for insurance claims, subject to policy coverage. Pricing details were not disclosed at the reception level, as treatment costs are determined by the consulting doctor after evaluating the patient’s medical condition and treatment requirements.

At the end of the discussion, the staff provided their business card and requested complete medical details along with insurance policy information for further evaluation.

The overall environment of the facility was well-maintained, organised, and professional. During the visit, our team member also observed discussions among patients regarding their treatment experiences. Some individuals spoke positively about their health improvements after undergoing Ayurvedic treatment, including patients discussing cancer-related treatments. While these are individual experiences and cannot be independently verified, they indicate a high level of trust among patients in the company’s treatment approach.

Overall, our observations suggest that the Surat centre is witnessing strong patient footfall, healthy occupancy levels, and positive patient engagement. The centre appears to be operating efficiently and benefits from its strategic location and strong local brand visibility.

This was our third on-ground visit to a JSLL healthcare facility after Navi Mumbai and Panvel, both of which have already been covered in detail in our research report.

Credit: @palbalar30
Email: [email protected]

#Trinetra #Investing #JSSL #Jeenasikho #hospitals #Healthcare #Industry

[Trinetra Asset Managers @TrinetraAsset]

Entero Healthcare Solutions Ltd – Q4 FY26 – 1st cut and our views

A healthcare distribution platform trying to build a pan-India moat through scale, acquisitions and higher-margin medtech expansion

Entero delivered a strong FY26 with revenue at ₹6,591 crore (+31.5% YoY on like-to-like basis), EBITDA at ₹266 crore with 4% margin, and PAT at ₹146 crore (+36% YoY).
Q4 was even stronger with revenue growth of ~43% YoY and EBITDA margin expanding to 4.5%.

The biggest positive from the quarter was margin improvement. Gross margin expanded sharply to 10.9% in Q4 from lower single-digit levels historically, mainly due to better procurement efficiencies, increasing scale and higher contribution from medtech businesses where Entero plays a more commercial role instead of just pure distribution. Management clearly indicated that future EBITDA improvement will largely come from gross margin expansion.

The company is gradually transforming from a pharma distributor into a broader healthcare distribution and commercialization platform. Over FY26, Entero completed seven acquisitions including multiple medtech acquisitions, taking medtech revenue contribution to more than ₹1,000 crore annualized revenue and ~15% of total sales. Management believes this can move towards 20% over time.

This medtech shift is strategically important because medtech distribution carries structurally better margins than traditional pharma distribution. In several cases, Entero is not only distributing products but also handling commercialization, sales support, installations and demand generation for global companies, which significantly improves margins and return ratios.

Another important takeaway was management’s confidence around the moat they are building. Today the platform serves more than 1 lakh pharmacies, 3,600 hospitals and 3,300 healthcare manufacturers across India. Management repeatedly emphasized that this creates a two-sided network effect — more suppliers join because of customer reach and more customers join because of product breadth.

Operationally also, the business continues to improve steadily. Working capital days reduced further, operating cash flow turned positive at ₹96 crore for FY26, and ROCE improved sharply to ~15% for the year and ~18% in Q4. Management guided for ROCE to cross 20% going ahead as margins expand further.

For FY27, the company guided for 23% revenue growth and 5% EBITDA margin without assuming any fresh acquisitions. Importantly, around 11% of this growth will come from the full-year impact of acquisitions already completed, while the remaining growth is expected from organic expansion.

Management also clarified that FY27 will be more focused on integrating and scaling the existing platform rather than aggressively chasing new acquisitions. This is important because the company has already completed a very large number of acquisitions over the last few years and execution quality now becomes critical.

One emerging growth driver is GLP-1 distribution. While the current contribution is still small relative to total business, Entero believes it has a disproportionately higher market share in this category because of its cold-chain capabilities and nationwide infrastructure.

At the same time, there are still some things investors need to monitor carefully.

- Minority interest leakage has become meaningful because many acquisitions are not fully owned initially.
- Working capital remains structurally high because distribution businesses naturally require inventory and receivables.
- Continuous acquisitions increase integration complexity.
- Margins are improving, but this still remains a relatively low-margin business compared to other healthcare segments.

Overall, Entero appears to be moving beyond the image of a simple pharma distributor. The company is trying to build a scaled healthcare supply-chain and commercialization platform with improved margins, rising medtech exposure and stronger return ratios.

If management successfully integrates acquisitions, improves gross margins further and continues building higher-value medtech relationships, Entero can gradually evolve into one of the largest organized healthcare distribution platforms in India over the next few years.

#Trinetra #Investing #Concallhighlights #Concallnotes #Q4concalls #Entero #healthcare #solutions

[Trinetra Asset Managers @TrinetraAsset]

Rainbow Children's Medicare Ltd – Q4 FY26 – 1st cut and our views

A focused mother & child healthcare platform which is slowly becoming a scaled healthcare network story

Rainbow delivered a strong Q4 FY26 with revenue at ₹460 crore (+24% YoY), EBITDA at ₹145 crore (+26% YoY) and PAT at ₹78 crore (+38% YoY).
For FY26, revenue stood at ₹1,703 crore (+12% YoY) while EBITDA margins remained strong at ~32%, continuing to be among the best in the hospital sector.

The important thing is that this growth came despite a large capacity addition in the year. The company added nearly 500 beds during FY26, the highest in its history, while occupancies remained stable. That gives confidence that demand absorption is happening well across both mature and new hospitals.

What changed during the year is that Rainbow is now clearly moving from being a Hyderabad-centric pediatric chain to a larger multi-city mother & child healthcare network. Bangalore, Chennai and newer geographies are becoming more important, while acquisitions like Warangal and Guwahati are scaling up smoothly. Management also sounded more aggressive on expansion, with nearly 900 beds currently under execution across Gurgaon, Pune, Coimbatore, Bangalore and Indore.

The company continues to position itself differently from normal maternity chains. Their focus remains on high-end pediatric specialties, NICU, PICU, liver transplants, fertility and advanced neonatal care, which structurally supports better margins and stronger ARPOB compared to normal women & child hospitals. Management repeatedly highlighted that Rainbow operates more like a pediatric multi-specialty platform rather than a simple maternity chain.

One important positive from the call was management commentary around occupancy and growth. The company believes mature hospitals can move back towards ~60% occupancy over time, while group occupancy can sustain around 56–58%, which would meaningfully improve operating leverage. At the same time, the new CEO has started focusing heavily on execution, digital systems, CRM, doctor engagement and conversion metrics, which indicates the company is entering a more process-driven phase.

Another important piece is fertility (IVF), which is becoming a meaningful contributor. IVF revenue reached ~₹61 crore in FY26 and management expects ~25% annual growth for the next few years. This segment not only improves revenue mix but also helps patient conversion into maternity and pediatric care over time.

The balance sheet remains one of the strongest parts of the story. The company remains debt-free with cash reserves of nearly ₹600–700 crore, and management indicated that even the ongoing expansion pipeline will largely be funded through internal accruals.

At the same time, there are still some things to watch carefully. Occupancy in mature hospitals has not fully returned to historical levels yet because of lower seasonal illnesses and changing case mix. International business was weak during the year because of geopolitical issues, and new hospitals will naturally take time to mature. Also, this remains a specialty healthcare business where doctor quality, execution and maintaining clinical standards across cities will be critical as the network expands rapidly.

Overall, Rainbow still looks like one of the highest-quality hospital platforms in the country because of its niche positioning, strong margins, clean balance sheet and focused mother & child healthcare model.

The company is now entering the next phase where the story is less about adding beds and more about improving occupancy, scaling specialties and building stronger multi-city execution. If management executes well on the current expansion pipeline, Rainbow can slowly evolve from a niche pediatric chain into a much larger specialty healthcare platform over the next few years.

#Trinetra #Investing #Concallhighlights #Concallnotes #Q4concalls #Rainbow #healthcare #Hospitals #Maternitychain #pediatric

[Trinetra Asset Managers @TrinetraAsset]

Yatharth Hospital & Trauma Care Services Ltd – Q4 FY26 – 1st cut and our views

A fast-scaling North India hospital platform which is combining strong execution with aggressive cluster expansion

Yatharth delivered a very strong FY26 with revenue at ₹1,207 crore (+36% YoY), EBITDA at ₹292 crore (+30% YoY) and PAT at ₹170 crore (+30% YoY).
Q4 was even stronger, with revenue growing ~47% YoY to ₹342 crore while EBITDA reached the company’s highest ever quarterly level.

The growth was not only because of mature hospitals but also due to strong ramp-up in newly added facilities. Management highlighted that the Delhi and Faridabad hospitals scaled up much faster than internal expectations, while the Agra acquisition has already reached double-digit EBITDA margins within a short period.

The bigger story here is that Yatharth is no longer just a Noida-based hospital chain. The company is clearly building a larger NCR-focused healthcare network through a cluster-based strategy. Noida, Faridabad, Delhi, Gurugram, and Agra are now becoming connected healthcare clusters where the company can improve doctor attraction, referrals, branding, and operating leverage. Management repeatedly highlighted that this cluster approach is one of the biggest differentiators for them.

Operationally, the business continues to improve. Occupancy for Q4 stood at 71%, which is already strong despite significant bed additions. ARPOB also improved to ~₹33,000, while hospitals like Noida Extension and Greater Noida are now operating at much higher realization levels because of increasing super-specialty mix and international patients. Oncology contribution at Noida Extension has increased meaningfully and management expects newer hospitals like Gurugram to eventually operate at ARPOB above ₹50,000.

One important thing visible from the call is the shift in payor mix. Historically, government business was a larger contributor for Yatharth, but now the company is consciously moving towards higher private insurance, cash and international patient mix. Management expects government business contribution to gradually reduce over the next few years, especially because newer hospitals are being built around premium catchments.

The company also sounded extremely confident about expansion. Current operational plus announced capacity already takes the network beyond 3,200 beds, and management believes the 5,000-bed target may actually be achieved earlier than planned. The expansion strategy will remain largely acquisition-led (~70%), with focus on North Indian cities and micro-markets where healthcare infrastructure is still underserved.

Another positive was cash generation and balance sheet strength. Despite aggressive expansion, the company ended FY26 with net cash position and strong operating cash flow conversion. Management also clarified that current expansion plans can largely be funded through internal accruals along with manageable debt.

At the same time, there are still some things to monitor. This remains a fast-expanding hospital platform, so execution risk will naturally remain high. New hospitals need to ramp up smoothly, doctor onboarding becomes critical, and maintaining margins while scaling aggressively will be important. Also, a part of the historical business still has exposure to government schemes, though management is actively reducing this mix over time.

Overall, Yatharth currently looks like one of the fastest-growing hospital platforms in North India. The company is benefiting from strong occupancy, improving ARPOB, premiumization of newer hospitals and aggressive but focused expansion across NCR and nearby clusters.

The story now is moving beyond just capacity addition. If management continues executing well on acquisitions, improves payor mix, and successfully scales premium hospitals like Gurugram, Yatharth can gradually move from a mid-sized regional hospital chain to a much larger North India healthcare platform over the next few years.

#Trinetra #Investing #Concallhighlights #Concallnotes #Q4concalls #Yatharth #healthcare #Hospitals

[Trinetra Asset Managers @TrinetraAsset]

Triveni Turbine – Q4 FY26 – 1st cut and our views

An industrial turbine company that is slowly becoming a broader energy-efficiency and rotating-equipment platform.

Triveni is not just a steam turbine manufacturer.

It operates in the sub-100 MW industrial steam turbine market, where turbines are used across:
- Industrial captive power
- Renewable power
- Waste heat recovery
- Biomass
- Waste-to-energy
- Sugar
- Cement
- Steel
- Oil & gas
- Chemicals
- Paper
- Distilleries

The company is among the top global players in industrial steam turbines and has 6,000+ installations across 80+ countries.

But the story is now changing.

Triveni is trying to move from being a turbine supplier to a broader heat, power and energy-transition solutions company.

Newer areas include:
- CO2-based heat pumps
- CO2-based chillers
- Organic Rankine Cycle turbines
- Geothermal turbines
- MVR compressors
- Utility-scale refurbishment
- Rotating equipment aftermarket

So the company is no longer just playing industrial capex.

It is increasingly playing a role in energy efficiency, decarbonisation, renewables, and lifecycle services.

Growth?

Q4 was strong.

- Revenue – ₹680 cr, up 26% YoY
- Highest ever quarterly revenue
- Export revenue – 60% of sales
- Export revenue growth – 46% YoY

For FY26:

- Revenue – ₹2,181 cr, up 9% YoY
- EBITDA – ₹527 cr
- EBITDA margin – 24.2%
- PBT before exceptional items – ₹490 cr
- PAT – down 3% YoY

So revenue growth came through, but bottom-line growth did not.

PAT was impacted by a one-time wage-code-related exceptional charge of ~₹15.7 cr.

But even excluding that, FY26 was not as strong as FY25 because margins compressed due to product mix, lower aftermarket contribution, NTPC strategic project execution and forex mark-to-market loss.

Order book?

Q4 order booking was healthy.

- Total order booking – ₹754 cr, up 19% YoY
- Export order booking – ₹516 cr, up 174% YoY
- Exports contributed 69% of Q4 order booking
- Aftermarket order booking grew 121% YoY and contributed ~50% of Q4 order booking
- Closing order book stood at ₹2,054 cr, up 8% YoY.
- Exports were 51% of the closing order book.

So the order book is healthy, but not spectacular.

Important nuance:

Order book is higher than last year, but lower than the Q2 FY26 peak of ~₹2,220 cr.

Management guidance – and have they delivered?

This is mixed.

1. Management had warned early in the year that FY26 would be back-ended because Q1 was impacted by customer inspections, MRT delays and geopolitical disruptions.

Delivered.

Q4 helped offset a weak first half.

2. Management had guided that FY26 should still show growth despite lumpiness.

Delivered on revenue.

Revenue grew 9% YoY.

3. Management had expected Q4 order booking to be stronger than in the prior quarters.

Delivered.

Q4 order booking of ₹754 cr was meaningfully higher than Q3’s ₹391 cr.

4. Management’s confidence on margins was partly delivered.

EBITDA margin stayed healthy at 24.2%, but declined from 25.8% in FY25.

5. Bottom-line growth was not delivered.

PAT declined 3% YoY despite revenue growth.

6. Export momentum delivered strongly.

Export revenue grew 30% in FY26 and contributed 58% of annual revenue vs 48% last year.

7. New product optionality is progressing, but not yet meaningful.

Heat pumps, ORC, MVR and CO2 solutions are promising, but still early.

So the scorecard is:

- Revenue growth – delivered
- Back-ended recovery – delivered
- Q4 order booking recovery – delivered
- Export growth – delivered
- Margins – healthy but lower
- PAT growth – missed
- New products – promising, but early

What changed?

The export story got stronger.

Triveni’s FY26 revenue was increasingly export-led.
Export revenue grew 30% YoY and exports contributed 58% of overall revenue.

Q4 export order booking was especially strong, with demand from Europe, Turkey and Southeast Asia.

The US pipeline is also becoming more visible.

Management said the product inquiry book is now ~18 GW, almost double last year, with North America alone at ~3 GW and India at ~7 GW.

This matters because Triveni’s next leg of growth may not come only from India capex.

It may come from a larger global energy and aftermarket cycle.

Market backdrop

This is not a simple “industry is growing fast” story.

The global steam turbine market has actually declined over the last decade.

Even the sub-100 MW industrial steam turbine market, where Triveni operates, has declined over time.

But the mix is changing.

Thermal renewable fuels like biomass, waste-to-energy and waste heat recovery have become a much larger part of the sub-100 MW market.

This is where Triveni is positioned better.

So the thesis is not “steam turbines are a secular growth market.”

The thesis is:

A strong player in a slow market can still compound if it gains share, expands geographies, enters higher-value niches and builds aftermarket annuity.

Our verdict

FY26 was not a clean year.

- Q1 was weak.
- H1 was weak.
- Margins compressed.
- PAT declined.

But the exit run-rate is much better.

Q4 had record revenue, strong export order booking, strong aftermarket order booking and improved order book.

The company is now entering FY27 with:
- ₹2,054 cr order book
- Strong global inquiry pipeline
- Improving export traction
- Growing aftermarket opportunity
- New product optionality
- Asset-light model
- Comfortable balance sheet

The key question is whether Triveni can convert the inquiry book into actual orders without further margin dilution.

What we like

Export momentum is strong.

Exports are now 58% of annual revenue and 51% of closing order book.

The inquiry book has expanded materially.

Product inquiry book at ~18 GW and North America at ~3 GW gives better medium-term visibility.

Aftermarket order booking is improving.

Q4 aftermarket order booking grew 121% YoY and contributed ~50% of total order booking.

The company is moving into higher-value niches.

Geothermal, ORC, CO2 heat pumps, MVR and rotating equipment refurbishment can expand the addressable market.

The business remains asset-light.

Management does not expect a large greenfield capex requirement in the near term.

What we don’t like / watchouts

FY26 profit growth was weak.
Revenue grew 9%, but PAT declined 3%.

Margins compressed.
EBITDA margin fell from 25.8% in FY25 to 24.2% in FY26.

Order book growth was modest.
Closing order book was up 8% YoY, but lower than the Q2 peak.

Quarterly lumpiness is rising.
As Triveni moves into larger API, higher MW, strategic and export projects, quarterly dispatches and revenue recognition can become more volatile.

Receivables spiked at year-end.
Management says this is a timing issue because of the March-end billing, but receivable days still need monitoring.

New products are still optionality, not base case.
CO2 heat pumps, ORC and MVR are exciting, but meaningful revenue contribution may take time.

Final view

Triveni has moved from:

“industrial steam turbine company”
to
“global heat & power solutions company with energy-transition optionality.”

FY26 was a year of execution recovery rather than clean compounding.

The core business remains strong.

The export engine is improving.

The aftermarket opportunity is getting larger.

And the inquiry book gives comfort for FY27.

But the bar is clear:
- Convert inquiries into orders.
- Restore margin trajectory.
- Reduce receivable volatility.
- Scale aftermarket.

Prove that new products can become meaningful revenue streams.

If Triveni delivers on these, it remains one of the better industrial energy-efficiency compounders from India.

#Trinetra #TriveniTurbine #Investing #ConcallHighlights #ConcallNotes #CapitalGoods #EnergyTransition #IndustrialManufacturing #EquityResearch

[Trinetra Asset Managers @TrinetraAsset]

Solar Industries – Q4 FY26 – 1st cut and our views

An industrial explosives company that is rapidly becoming a defence + global energetic materials platform.

Solar is no longer just a mining explosives story.

The company now has 3 engines:
- Domestic industrial explosives
- International explosives
- Defence & aerospace

The important change is the mix.

FY26 revenue mix:
- International – 39%
- Defence – 27%
- CIL – 9%
- Non-CIL / Institutional – 12%
- Housing & Infra – 12%
- Others – 1%

So defence + international now contribute ~66% of revenue. This is where the quality of the business has changed.

Growth?

Q4 was very strong.

- Revenue – ₹3,053 cr, up 41% YoY
- EBITDA – ₹870 cr, up 59% YoY
- EBITDA margin – 28.5%
- PAT – ₹556 cr, up 61% YoY

For FY26:

- Revenue – ₹9,838 cr, up 30%
- EBITDA – ₹2,750 cr, up 35%
- EBITDA margin – 27.95%
- PAT – ₹1,737 cr, up 35%

This was the company’s highest-ever quarterly and annual performance.

What changed?

Defence has become the main story.

Q4 defence revenue crossed ₹1,000 cr for the first time.

FY26 defence revenue was ₹2,634 cr vs ₹1,355 cr last year — up 94%.

International business also grew 32% YoY to ₹3,815 cr.
Domestic mining was muted, but defence + exports more than compensated.

Order book?

Order book stands at ₹21,300 cr+.

This gives strong visibility for the next leg of growth, especially in defence.

Management guidance – delivered or missed?

Mixed, but largely positive.

1. FY26 revenue target was ₹10,000 cr – marginal miss at ₹9,838 cr.
2. FY26 defence revenue target was ₹3,000 cr+ – missed at ₹2,634 cr.
3. EBITDA margin guidance was delivered/beaten – FY26 margin came at 27.95%.
4. Defence mix target of crossing 30% was not fully met for FY26 – defence closed at 27% of sales.
5. Order book build-up was strong – ₹21,300 cr+ order book now.
6. FY27 guidance is aggressive – ₹14,000 cr revenue, ₹4,500 cr+ defence revenue, current margin levels, and ₹2,050 cr capex.

So the verdict is:

- Revenue – almost delivered
- Defence – missed vs guidance, but growth still very strong
- Margins – delivered
- Order book – delivered
- FY27 guidance – very aggressive

What we like

The business mix is improving fast.

Defence and international are now the real growth drivers.

Margins are holding up despite scale-up.

Even with higher employee cost, higher capex and new product investments, EBITDA margin stayed close to 28%.

Defence has moved from optionality to core business.
Solar is now present across Pinaka rockets, energetic materials, ammunition, loitering munitions, counter-drone systems and other strategic products.

Exports are no longer a small add-on.
Africa, Turkey, Kazakhstan, Southeast Asia and upcoming Australia expansion can keep international growth strong.

The company is investing ahead of demand.
Planned FY27 capex is ₹2,050 cr, after ₹2,700 cr invested over the last 2 years.

What we don’t like / watchouts

FY26 defence revenue missed the ₹3,000 cr target.

This matters because the stock is increasingly getting valued as a defence compounder.

FY27 guidance is a big ask.

₹14,000 cr revenue implies ~42% growth, and ₹4,500 cr defence revenue implies ~70% defence growth.

Execution has to be very strong.

Product timelines remain important.

Bhargavastra is still in final development / trial stage, while 155mm complete round production is expected after the coupling facility is completed over the next few months.

Debt and capex need monitoring.

FY26 capex was ₹1,556 cr and net debt moved to ₹867 cr, though leverage remains comfortable at 0.32x net debt / EBITDA.

Domestic mining is not exciting right now.

CIL revenue declined and overall domestic mining demand was weak.

Final view

Solar has moved from:

“mining explosives company”
to
“global explosives + defence manufacturing platform.”

FY26 was a strong year.

But FY27 is the real test.

The bar is now clear:

- Deliver ₹14,000 cr revenue
- Cross ₹4,500 cr defence revenue
- Maintain ~28% EBITDA margin
- Convert ₹21,300 cr+ order book

Scale Pinaka, energetic materials and ammunition
Prove Bhargavastra / 155mm / loitering munitions as larger revenue lines

If management delivers FY27, Solar moves into a different league.

If not, the stock remains exposed to the usual risks of aggressive guidance, defence execution timelines and capex-led scale-up.

#Trinetra #SolarIndustries #Investing #Defence #ConcallHighlights #ConcallNotes #Pinaka #Ammunition #MakeInIndia #EquityResearch