Ladies and gentlemen, good day, and welcome to the Solar Industries India Limited Q1 FY25 Earnings Conference Call. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Umesh Rao. Thank you, and over to you, sir. Thank you, Sejal. Good morning, everyone, and thanks for joining the call today. At the outset, I would like to thank management for giving us opportunity to host the call. From the management today, we have Mr. Manish Nuwal, MD and CEO, Mr. Moneesh Agrawal, Joint CFO, Ms. Shalinee Mandhana, Joint CFO, Ms. Aanchal Kewlani, Senior Finance Manager. Without much ado, I would like to hand over the call to Ms. Aanchal from Solar Industries to take this forward. Over to you, ma'am. Thank you so much. A very good morning, everyone, and welcome to this fiscal Q1 review conference call. My name is Aanchal, and I would like to welcome you all on behalf of Solar Industries India Limited. At the onset, let me restate, in this call, we might make projections or other forward-looking statements regarding future events and about future financial performance. Please remember that such statements are only predictions. Actual events or results may differ materially. Our website will be updated with all relevant information from time to time. Now, I would request our MD and CEO, Mr. Manish Nuwal, for his opening remarks on the company's performance for this quarter. Over to you, sir. A very good morning to all the participants, well-wishers, and stakeholders. We are happy to announce that we have achieved highest ever quarterly EBITDA and PAT at INR 474 crore and INR 301 crore in the Q1 of FY 2025. The turnover of the company stands at INR 1,695 crore, registering a 5% increase over Q4 of FY 2024. The company has also achieved highest quarterly EBITDA and PAT margins at around 28% and 18%, respectively. The domestic explosives volume for the quarter grew by 16% year-on-year basis, which is in line with our annual guidance for the year 2025. The government's budget for FY 2025, with increased capital outlay and greater emphasis on infrastructure development, housing and roads, is bound to increase demand for explosives. We are pleased to share that the defense revenue stands at INR 204 crore for this quarter, registering a growth of 32% year-on-year. The company has delivered first lot of indigenously developed loitering munition to the armed forces. We have also developed loitering munitions, SEBEX and other explosives, which proves our company's in-house R&D capabilities. With these developments, and considering the current defense order book of INR 2,500 crore, we will be sailing through our annual defense guidance of INR 1,500 crore comfortably. We expect the growth in defense to continue with the help of much-awaited PINAKA and other orders to commercialize. We are expanding our presence in two new countries, namely Kazakhstan and Thailand, very soon. The acquisition of ProBlast, South Africa, is in line with the company's intent to expand its operation in the international markets. As we move forward, we are pleased to share the launch of our new, a powerful representation of continuous progress, our brand's unique ability to uplift our stakeholders and the businesses we work with. Now, I will hand over the call to Aanchal for a quick update on quarter numbers. Thank you. Thank you so much, sir. As our MD said, we are pleased to unveil a new corporate logo, which aims to align with the vision, mission, values, vibrant heritage and culture of our company. The new logo is a visual narrative that captures the essence of perpetual growth, innovation, and advancing the industries we serve. It gives us immense satisfaction to present the results of our journey, reflecting the efforts we put in. We achieved the revenue of INR 1,695 crore versus INR 1,682 crore in the previous quarter year. EBITDA at INR 474 crore versus INR 331 crore, increased by 43% year-on-year. PBT stands at INR 408 crore versus INR 272 crore, increased by 50% year-on-year. PAT stands at INR 301 crore versus INR 202 crore, increased by 49% year-on-year. Now, let's quickly review the volume side. Explosives, the domestic volume in the quarter increased by 16%. Our realization of explosives showed a big growth of 12%. Explosives revenue was up by 3%. Revenue from initiating systems was up by 12%. Coming to the customer's basket, revenue from CL was INR 246 crores versus INR 268 crores. Revenue from non-CL and institutional business was INR 304 versus INR 293 crores. Revenue from housing and infra was INR 353 crores versus INR 349. Export and overseas revenue showed INR 579 crores versus INR 605 crores. Defense revenue was up. It was around INR 204 crores versus INR 155 crores. Coming to the cost, raw material, material consumption cost decreased by 10% in absolute terms. Employee cost was increased by 31%. Other expense costs has come down. Our EBITDA margin for the quarter reached to the level close to 28%, and the same grew by 826 BPS. The interest cost has gone up by 11%. Depreciation has increased by 17% on account of CapEx. The profit before tax stands at INR 408 crores with a growth of 50%. The net profit in absolute terms is up by 49%, stands at INR 301 crores. Now, we would be happy to take any questions, comments, and suggestions that may, that you may have. Over to you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Amit Dixit from ICICI Securities. Please go ahead. Yes, hi, good morning, everyone, and thanks for the opportunity. At the outset, I would like to congratulate the management for an excellent set of numbers. I have two questions. The first one is essentially on the different side. So, we have developed the new explosives, which are, you know, sort of, I would say, cutting edge in technology. Now, they, there were media reports that these have been approved or inspected by Navy. So just wanted to understand the further developments in this regard. Are we also going ahead with the development, sorry, with the approval from Army, Air Force, what would be the total market opportunity for this, and when we are going to commercialize it? So this is the first question. Yeah, thank you, Amit. As you have mentioned that, the company has developed the new products, which are more lethal in its power, and the advantage will be that these products will act as a game changer for the products which we are offering in the market because of its nature of the strength of the product. And as we move forward, like, Indian Navy has qualified the product for different usages, and, the armed forces, like Army and Air Force, will also be looking forward to acquire products which have more power as such. So definitely, these products will help the company to offer better products and get more revenue of these products. But it is difficult to predict any market at this stage and the timeline for the moment. Understandable, sir. The second question is again on defense. So recently, there were media articles that there was a visit by the Deputy Chief of Air Staff to your recently commissioned Chaff factory. Now, Chaff is something which I understand is very interesting because in the fifth positive indigenization list, there are mentions of Chaff. So how do we see this? Because we have seen some sizable orders in the past also. So how do we see this shaping up? When will the factory be ready for, you know, commercial production? Yeah, we have recently inaugurated this facility to produce Chaff and Flares, and these are acting as an electronic countermeasure devices for protecting the military aircraft. So as you are aware that, our company is the first company in India to start this product as a 100% indigenous under the IDDM route. So the production has already started, and as we move forward, we are expecting more orders or orders to come from Air Force. Once those things are in place, we will definitely share with all the stakeholders. Just as one last one and a bookkeeping question: the other expenses have declined quite meaningfully. So is it due to some of the provisions that we might have rolled back, or is it purely because of the operational performance? So if you look at the business, and if you look at my Q4 press note also, we have mentioned that we are expecting better volumes in the year, which was around 15%, and we were expecting international business to do better. So if you look at this Q1 numbers, the business from international business as such is not performed on a top-line basis, but as far as bottom line is concerned, the results from international business have improved. On another side, the, as far as percentage mix is concerned, the business from international has little bit reduced and defense has increased. So as a result of the combination of two, three factors, first, the international business has performed better. Defense has started performing better than the previous year-on-year quarter, and the domestic business and percentage has been better than the internationals. As a result of which, the other expenses has gone down by around 4%. Another factor which has helped is the little bit of softening on the losses because of hyperinflation or foreign exchanges currency factor. So these things have helped us to achieve better EBITDA margin. Otherwise, also, in Q4 we have said that in this financial year, we are expecting better EBITDA margins. So in the last year it was around 23%, across, and in this year we are expecting better than 23. So it is a summation of all the efforts and all the business dynamics, which we have already shared. Thank you, sir, for the elaborate answer. Congratulations once again, and all the best. Thank you. The next question is from the line of Dipen Vakil from PhillipCapital. Please go ahead. Thank you for the opportunity, sir, and congratulations on great margin. So my first question is, sir, in this quarter, what were, what are your major new order wins, and how is the split between defense and other explosives? And, that leading to, can you also give us a split between, in the order book between Coal India, SCCL and defense? Hello. Yeah. Your first question was with respect to if I check the order book. So the current order book stands at around INR 4,750+. So it's around INR 2,500 and currently, new big orders have come in this quarter. Okay. Thank you so much for that. My second question is on, your, so prices for ammonium nitrate. So how has been the prices of ammonium nitrate in this, in, Q1, and how the trend has been going ahead after, since the Q1 ended? The ammonium nitrate prices are almost similar to the prices which we have seen in the Q4. Going ahead, do we expect them to rise or stay in the similar level? We don't expect major fluctuation in ammonium nitrate prices as we move forward. Got it, sir. So just last one, for the clarification on your order book. You mentioned that you have a defense order book of INR 2,500 crore. So is it possible to give, a slightly better split as to which are the major, orders in defense? So, like we have been saying all the time, that the company has a large product portfolio in different sectors. So everything, is basically either it is energy material, propellants, pyros, fuses, and rockets, and it's a combination of all these products, as a result of which we have an order book of around INR 2,500 crores. Got it, sir. Thank you so much, for answering my question, and all the best for quarter, sir. Thank you. The next question is from the line of CA Garvit Goyal from Invest Analytics Advisory LLP. Please go ahead. Hello. Am I audible? Yes, sir. Good morning, sir, and congrats for a good set of numbers. Just one question on the defense sector. In your annual report, you mentioned, and you are anticipating a decent order inflows from the defense sector in the next two to three years, which will drive our significant growth in this segment. So, given that, our existing order book is INR 2,500 cr, of which I think, we are expecting, 1,300 cr to be executed this year itself. So, could you please elaborate on, what are the major products constituted in the existing order book, and the specific products that, we expect to receive in the future orders? Additionally, can you also quantify the size of the order inflows that we are expecting in, say, next 2-3 years? So like we have said, we are expecting large orders for defense sector, and the current order book is INR 2,500 crores, and PINAKA orders are also likely to come soon. But because of elections and then government formation, certain decision-making has slowed down for a couple of months, but we are expecting the orders to receive very soon. And PINAKA will be one of the biggest orders which we are expecting. And apart from that, there are plenty of other products on which we have worked in last seven, eight years. So we are expecting orders from all those products. And as a result, we are expecting more businesses from defense side. For this year, we have given a guidance of INR 1,500 crores. And as we move forward, we will give annual guidance on defense side. Understood, sir. And sir, what are the orders that are in currently pipelined for R&D purpose in the defense sector that we are currently working on? I have already replied to your point. Thank you. Thank you. The next question is from the line of Nitin Arora from Axis Mutual Fund. Please go ahead. Hi, sir. Thank you for taking my question. So just one on your margin. The way you said, look, last year, we did about 23%, and we will do better than this in this year. Can you help us understand what is driving this, the margin? Because every year we are somewhat increasing margins every year now. Can you help us? And Jay used to say that 22% plus is what our guidance is. So, directionally, how one should look at your EBITDA margin, given your operational leverage will be at play, you are still very confident on your defense revenues, plus new order wins, what you talked about. But directionally, when we look at for next 1-2 years or 2 years plus, what kind of an EBITDA margin range one should look at it? Well, yeah, like I said, that in the last year, we have achieved EBITDA margin of 23%, and that was despite of various fluctuation in foreign exchange and commodity side. So definitely, we should have achieved even little more than 23. So as a result of little bit of softening on the negative impact of foreign exchange or hyperinflation, we are in a little better position. Apart from this factor, like we have been mentioning, that international business should do better, so actually it has been very good. As far as South Africa, which was making losses in last many years since inception, so that has also turned around and, we have reached to a first-time profit before tax level we have achieved on a positive side. Apart from this, domestic business is also doing quite good. The volume last year, we have achieved around 20% growth, and in this year also we are targeting +15%. So in this quarter, we have almost crossed 15% level. So if you combine all these factors, along with the increasing defense business, we expect that, EBITDA margin should be more than 23%. As far as direction is concerned, definitely the current, EBITDA margin of 27%-28% is on a very good or higher side, but we expect that, 25% we should be able to achieve. This is very helpful, sir. Just on your defense side, and you said that we will provide the guidance closer to this year-end for the next year. But again, a directional question, because now the products are getting approved across you know what you have developed. Even you know I think one participant talked about the new explosive part, which also looks very you know in technology-wise very high upgrade you have done. In next 2-3 years, do you have anything in mind that you know this is something will be my defense revenue? Because now it looks like ordering has happened started happening and as far as the approval is very behind now, what... You know 3-4 years we were looking at it, that approval is not coming. Now, everything you have passed. Any directional guidance, sir, that would be helpful. Yeah. Like, if you look at last year's revenue from defense was around INR 550 crores. This year we are expecting INR 1,500 crores, and once PINAKA and other products start delivering better results, and the recent R&D efforts on developing products which can add more liquidity to the ammunition, so definitely we are expecting much bigger numbers in coming years. But like I said, it will be too early. Why? Because if you look at the nature of the industry, although there are plenty of geopolitical conflicts happening, but the pace at which defense industry moves is always quite different. So as a prudent practice, we don't want to give any rosy picture, but yes, we are very optimistic, and we are expecting much better top line and bottom line as we move forward. Thank you so much, sir, as always for your answers. Thanks a lot, and all the best. Thank you. The next question is from the line of Amit Vijay from AVON Investments. Please go ahead. Mr. Amit, may I request you to unmute your line and speak? Due to no response from the current participant, we will move on to the next participant. The next question is from the line of Ravi Naredi from Naredi Investments. Please go ahead. Due to no response from the current participant, we will move on to the next participant. The next question is from the line of Prabir from Ratnabali. Please go ahead. Hello, sir, thank you for the opportunity. Sir, I have a question from Chaff and Flares. Sir, currently, you said that you just have inaugurated the facility. So when from this the operations from this facility will start? This is number one. And number two is, you said that you will be the first company which will have 100% indigenous Chaff and Flares. But I guess in this field, Premier Explosives is already supplying this to Air Force. So is it right what you have said, just to... If you can clarify, sir? Yeah, like I said, that we have started manufacturing Chaff and Flares, and I also said that we are the first private company which is making 100% indigenous Chaff and Flares. So I stand by my word, and I cannot comment on what others are doing. You already supply or you will supply going ahead? ... So once we receive the orders for these kind of products, we will let you know. Sir, you guided that you are expecting a large order for PINAKA. So can you quantify to some extent what can be that size? So like we have said in our previous calls, that we have already participated in the RFPs. And now based on the official update, we are also in the offerings which we have made. So based on them, once we finish all the contractual negotiations or contractual formalities, we will come out with the exact number. Otherwise, it is not prudent to share at this stage the exact number or all that. But it is definitely going to be a very big order. Big means biggest of Solar history, the order book. Okay. Okay, sir, thank you for... That's all from my side. Thank you. Ladies and gentlemen, you may press star and one to ask a question. The next follow-up question is from the line of Dipen Vakil from PhillipCapital. Go ahead. Thank you for the follow-up opportunity. So, my next question was on CapEx. Any CapEx that you have done in Q1, and what are your CapEx plan for FY 25? This year we have, given that we are expecting the CapEx to be around INR 800 crores, and in the Q1 we have done around INR 200 crores. Got it, sir. So our next question is on your aviation side of business. So what kind of a demand scenario we are witnessing, especially from a domestic defense side, and also the export opportunities? Yeah, if you look at the global, geopolitical situation, the demand for these products seems to be very good, but the timeline on submitting RFPs, getting orders, and then starting the supply chain or starting the supply takes its own time. So as far as the current update is concerned, we see that there is a good demand for these products. Got it, sir. Thank you so much. Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Jay Jain from Buoyant Capital. Please go ahead. Hello. Hi. Congratulations on the good number. I just wanted one clarification. On page 31 of the annual report, you have mentioned two orders worth INR 455 crore and INR 994 crore in defense export side. Can you elaborate more? Yeah, like we have said that, we have mentioned we have received couple of orders for supplying defense products for the international market. And it's true that, we as a company have a strong goodwill as far as the, and we received all those orders. But because of the confidentiality clauses, we cannot name the country, we cannot name the product, we cannot name the customers. So that is the limitation which we have. Okay. These are two orders, or these are addition of multiple orders? So you go through our announcement, you will get all the details. Sure. Thank you. Thank you so much. Thank you. The next question is from the line of Ravi Naredi from Naredi Investments. Please go ahead. Mr. Manishji, you and your team did miracle. Topline increased 1%, while profit after tax rises 49% due to enhance of margin. It seems we are in perfect monopoly business. This happens due to your fantastic management under your leadership of, under your leadership and leadership of Shri Satya and Vinod. We salute you on this performance. Now, my question is, is higher margin sustainable in financial year 25? And can you tell margin in different segments separately, if possible? Thank you very much. As far as the margin, what we achieved is, like you said, is the highest ever, and we achieved around 28%. And then for the whole year, we have given a guidance, at the end of Q4 was 23%+. So if you look at the overall business dynamics and the kind of, the business we are, our businesses are performing, especially in international markets, especially in defense and the upcoming orders from, various other products, we are expecting that we should be able to, achieve EBITDA margins of around 25% in this financial year. Oh, nice. And this loitering munition system, what works it does, can you tell me this in a minute? Yeah, we have already shared about this product in this conference call. You can go through the details, sir. Okay. And what will be total CapEx, including Kazakhstan and Thailand in financial year 25 and 26? The total CapEx plan for year 2025 is around INR 800 crore. The expansions which we are doing in Kazakhstan, Thailand, and defense and domestic business is part of that purpose. Okay. Thank you very much, and all the best, sir. ... Thank you. Ladies and gentlemen, you may press star and one to ask a question. A reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Neeraj from ASK Investment Managers. Please go ahead. Hello, sir, and thank you very much for the opportunity. My question pertains to our planned entry and export markets, that is Thailand and Kazakhstan. Just wanted to check, will we have to set up our manufacturing units across these locations, or is it like we will be manufacturing from India and we will be exporting? These are the manufacturing units we are planning. Sorry, I didn't get you. It's manufacturing in India and exports from India. Is that right? No. We are setting up the manufacturing units in Kazakhstan and Thailand. Okay. Got it. So, sir, this INR 800 crore of CapEx that you are planning in FY 2025, would it be possible for you to give more granular breakup of it? How much of it will be in India, how much of it will be in Thailand and Kazakhstan? And in India, which are the areas where we are expanding our capacity? Hello. As Manish said that, the total planned CapEx for the year is around INR 800 crore. But as a policy matter, we give the detail at the year-end financial results on the by situation of India, specific market, and international and defense. Thank you very much. Thank you. The next question is from the line of Pratik from Trivikram Consultants. Please go ahead. Yeah. Hi, sir. Am I audible? Yes. Yeah. So hi, sir, congrats on a good set of numbers. So my first question is on Forex. So what is the Forex gain or loss for this quarter and for the last quarter? Hello, yeah. So as you know, we have spoken in the call that the EBITDA margin 28% haven't reached because of softening, some portion of them have been because of the softening and the Forex volatility. However, Forex is being a part of our cost. Currently, we do not have much of the figures in hand. We'll get back to you. Okay, my second question on defense. Now the defense is now forming major chunk in the revenue. So can you throw some color on this receivable side to get more clarity on cash flows from that defense orders? Sorry, the question is not audible. Is it clear now? Sir, may I request you to please use your handset? Yeah. I am audible now? Yeah. Please go ahead. Yeah. So my second question was on defense book. So now defense is now forming a major chunk in the, in your revenues. So can you throw some color on, bills receivable side of the defense part, to get more clarity on cash flows from that, defense orders? The defense currently stands at 12% of our sales, and it stands at INR 204 crore we've done in this quarter. With regard to cash flow, we come up in the quarterly and annual results. Okay. Sorry, quarterly and annual results. Okay, okay. Yeah. All the best for the future. Thank you. Thank you. The next question is from the line of Dhanay from Nomura. Please go ahead. Hello, sir. Thank you for the opportunity, and congratulations on the great set of numbers. Sir, I have a question on the export notes. Our exports- Sorry to interrupt you, sir. May I request you to please use your handset? Is it better now? Yes, sir. Please go ahead. Hello. Yeah, so I had a question on exports. So it has been relatively softer for the last two quarters. So can you give me the color on how the different geographies are performing in this quarter? So quarter by, we do not give countrywide numbers, but on overall basis, we have said that current year, the exports and overseas markets will be doing better, and that can be seen in our, results with respect to margins and profits. However, basket, if you see as a basket, currently the top line has fallen, and it stands around 34% of the top line revenue, which comes to around INR 579 crore. Okay. Ma'am, but any qualitative aspects on the geographies that you have been in? Any qualitative aspects? We consider business as a whole, both domestic market, export market, international as well as different. So on overall, we have said that currently the export and overseas stands at around 34% of the basket. Okay. Okay, okay. Ma'am, and, for this particular year, you are guiding defense revenues at around INR 1,500 crore. So, and going forward, there will be some incremental revenues on this. So is there incremental CapEx that you're planning, especially for the defense or on a current base, that will be sufficient for this revenue growth that you're targeting? So, as we said, that current CapEx this year is around 200, 800 crores and, and around INR 200 crores. So this will take care of as well as domestic. ...Okay. Ma'am, and what is the total that the amount that you invested in the defense business till date? It's around INR 1,000 crore plus. Okay. Okay. Thank you. Thank you, ma'am. That's it from my side. Yeah. Thank you. A reminder to all the participants that you may press star and one to ask a question. Ladies and gentlemen, you may press star and one to ask a question. The next follow-up question is from the line of Amit Vijay from AVON Investments. Please go ahead. Congratulations, Manish, for wonderful performance. Other questions being answered, only question remained is capacity utilization of plants, specifically for defense products. So, as far as capacity utilization, we always say that, we are handling, thousands of SKUs, and every SKU is measured in different terminology, so it is very difficult to give any capacity utilization factor for a company like Solar. So we are sorry, we cannot answer to what—answer your question to that extent, which you are expecting. No, no, no worry. All other questions been answered. Thank you. Thank you. Thank you. Thank you. The next question is from the line of Sanjiv Panda, from... who is an individual investor. Please go ahead. Good morning, sir. This is Sanjiv. Sir, the defense space itself is opening up, and after a long time, India is witnessing such a massive investment and opportunity for the domestic firms. And your existing business line from that, we are definitely gaining the momentum. But from a strategic point of view, are we looking at some other areas within the defense where you think we can explore and add on our business or a new avenue? Yeah. Yeah. Like we have been sharing that we are, our efforts on R&D side are quite enormous. We are continuously, continuously trying to develop new products with, by adopting the new technologies. And if you look at our past track record, that we are the first, private company in India to start manufacturing the rockets on its own. We are the first, as far as loitering ammunition in private sector is concerned. We are. It is 100% indigenous. And if you look at the recent development on the chaff and flares and also even on, like, SEBEX and other products, we are doing, we are putting a lot of efforts. And if you look at the, potentials, we all know that there are plenty of opportunities coming up in this defense sector. Our company is working really hard, and we are focusing on multiple products, and we are expecting that with the efforts which we are putting into our line of business, we should expect much better revenues and results from this sector. Thank you. As there are no further questions, I would now like to hand the conference over to the management for closing comments. Thank you. On behalf of Solar Industries, I extend heartfelt gratitude to all participants for their time. Thank you. See you in next quarter. On behalf of Nomura Financial Advisory and Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.