Ladies and gentlemen, good day and welcome to Solar Industries India Limited Q1 FY26 Earnings Conference Call, hosted by PhillipCapital. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Dipen Vakil from PhillipCapital. Thank you, and over to you, sir. Thank you, Palak. Good morning, everyone. On behalf of PhillipCapital, I welcome all the participants for Solar Industries Q1 FY26 Conference Call. To begin with, first, I would like to thank the management for giving us the opportunity to host this call. From the management today, we have Mr. Manish Nuwal, MD and CEO, Mr. Moneesh Agrawal, Joint CFO, Ms. Shalinee Mandhana, Joint CFO, and Ms. Aanchal Kewlani, Senior FM and IRM. Without much ado, I'll pass on to Aanchal to take it up. Over to you, ma'am. Good morning, and thank you for this. A very good morning, everyone, and welcome to this Fiscal First Quarter 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 statements and 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 J. Nuwal, for his opening remarks on the company's performance for this quarter. Over to you, sir. Thank you, Aanchal. A very good morning to all the esteemed investors. I, Manish Nuwal, welcome you all to the Solar Industries earnings call for the first quarter ended on 30th June 2025. Solar Group reports resilient operational and financial results for Q1 2025-2026. We are pleased to announce that we have achieved our highest-ever quarterly EBITDA and PBT of INR 564 crores and INR 353 crores, respectively, in this first quarter. The company's turnover stood at INR 2,154 crores, registering a 28% increase over Q1 of the previous fiscal year. Solar sustained growth momentum on account of robust performance, particularly from international business and defense sector. This performance could have been even better had the early monsoon not affected the domestic explosives markets. This quarter, our international business recorded a 43% year-on-year growth, and in terms of quantum, it stands at INR 826 crores, recording the highest quarterly sales. This performance was driven by strategic manufacturing facilities in nine countries and our global distribution network across 90 countries. We are pleased to report that our defense revenue has also reached INR 418 crores in this quarter, reflecting a robust 115% year-on-year growth. With a strong defense order book of around INR 15,000 crores and commercialization of Pinaka orders in this year, we anticipate that the defense domain will achieve its next level of growth, as per our guidance given earlier on the annual results. The successful testing of Bhargavastra and Rudrastra in this quarter reaffirms the strength of R&D capabilities of our company. Repeat orders for UAVs and multi-mode hand grenades have reaffirmed the quality of our products, bolstered users' confidence, and established us as a trusted partner in this Atmanirbhar Bharat initiative. The mining industry had lower demand due to milder heat waves, early monsoon, and geopolitical development tested the industry's resilience. However, we remain optimistic about the growth in mining and housing and infrastructure sectors in the upcoming quarters as the domestic cycle revives post-monsoon. With a proven global footprint and deep integration into commercial explosives, Solar is now strategically positioning itself as a global supply chain partner in the defense sector, unlocking new opportunities and enhancing the long values for the stakeholders. Backed by the 30 years of expertise, we have built a robust portfolio of high-impact solutions across mining, infrastructure, defense, and space. Our journey has been one of transformation rooted in innovation driven by purpose. As we continue to unlock new growth opportunities, our commitment to performance and stakeholders' value remains stronger than ever. I sincerely thank all our esteemed investors and analysts for joining us today. Thank you very much. Over to Aanchal for presenting the financials in detail. Thank you so much, sir. It gives us immense satisfaction to present the result of our journey, reflecting the efforts put in as profit momentum builds. We are exceeding the previous quarter's profits consecutively in a row, which gives us immense satisfaction and happiness. We achieved revenue of INR 2154 crores versus INR 1,685 crores, increased by 28% year-on-year. Highest quarterly EBITDA at INR 564 crores versus INR 474 crores, increased by 19% year-on-year. PAT standards INR 353 crores versus INR 301 crores, increased by 17% year-on-year. Now, let's quickly review the quarter numbers. Revenue from Coal India was INR 238 crores versus INR 246 crores in the previous quarter previous year. Revenue from Non-CIL Institutional was INR 348 crores versus INR 304 crores. Revenue from H&I, that's Housing and Infra, was INR 312 crores versus INR 253 crores. International revenue was INR 826 crores versus INR 579 crores, registering highest quarterly revenue with a growth of 43%. Defense revenue was INR 418 crores versus INR 194 crores in the same quarter previous year, registering growth of 115%. Coming to the cost breakup, raw material consumption cost was 50.80% as a percentage of sale versus 51.65%. Employee cost was 8.53% versus 7.78% as a percentage of sales. Other expense cost was approximately 15.85% versus 13.90% as a percentage of sales. The interest cost was 1.27% versus 1.63%, and the depreciation cost was approximately 2.6% versus 2.37% as a percentage of sales. We reported PBT as INR 481 crores versus INR 408 crores. We already have our presentations updated on the website. Now, we would be happy to take any questions, comments, or suggestions 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 please press Star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may please 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 Vikash Singh from ICICI Securities. Please go ahead. Thank you for the opportunity. Sir, my first question is regarding our medium-term outlook of INR 200 billion revenues and INR 80 billion defense revenue. Have we basically included the ReArm in Europe segment into that, and how big this opportunity could be for us? Can you repeat your questions again because I think? Am I audible properly? Yes. Yeah, yeah. Yeah. So sir, regarding our medium-term four- to five-year outlook of INR 200 billion revenues and the defense revenue of INR 80 billion, is this also includes the opportunities which we are hearing in Europe regarding the REARM Europe by 2030? Have we built in anything on that account as well? And if that, then how much? In the last annual results call, we have shared our plans at what we are going to achieve in this financial year and what we are likely to achieve in the next four to five years. So we stand by that, and you can refer to those numbers. Okay, sir. Sir, regarding the deals INR 2,000 crore UAV MALE drone orders, I just wanted to understand where are we placed in that segment now? Opportunity size for us could be? Yeah, this can be a big opportunity for the defense market, and as far as this program is concerned, plenty of companies will be participating, and we are also one of those companies who are interested to participate in this program. Okay, sir. Sir, lastly, on 155mm shell, if you could give us our standing on there and. So this is regarding, I think, 155 shell. So as far as this product is concerned, we have the facilities to make these products. We have already started working on that, and very soon, we will start the commercial production of this product. Sir, just a clarification on the defense targeted revenue of INR 80 billion over the next four to five years. We have added this 155mm shell in that segment, right? What I said, that next four, five years numbers which you are trying to ask, you can refer to my last quarterly phone call numbers, and that is good enough for the guidance as far as the long-term trajectory of our company is concerned. Noted, sir. That's all from my side. I'll join the queue if I have further questions. Thank you. Thank you. Thank you, sir. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your question to two per participant. The next question is from the line of Amit Dixit from Goldman Sachs. Please go ahead. Yeah, hi. Good morning, everyone, and thanks for the opportunity. At the outset, congratulations for a good set of numbers, sir. A pretty good and solid start to the year. A couple of questions from my side. The first one is regarding Bhargavastra and Rudrastra. While you have mentioned in the prepared press release that there have been tests over there, so just wanted to understand the commerciality part of it, that when can we expect orders from these two platforms? And the B part of the question is essentially on the ammunition side, that the export orders, we received quite a bit of export orders last year. So what kind of traction we are seeing in this market because this market is quite red hot at the moment? Yeah, like I said, that we have did some successful trials of Bhargavastra and Nagastra, Nagastra new series, as well as Rudrastra. So as far as trials are concerned, we are going ahead on the qualification part quite well. It will take some more time. More time means in defense is a couple of quarters where we will reach to the final qualification. And once we are through with that, we can expect the commercialization of these products. So as you are already aware, that in defense market, commercialization after the qualification also takes some time. So we are quite optimistic that these products are very much in demand. And once these are tested and successful trials being completed, we expect commercialization to happen at a much faster pace. As far as the order book from international markets are concerned, like we have already shared, that we have a total order book of around INR 15,000 crores, and after leaving the Pinaka portion, the order book from international is around INR 8,000 crores, so we have received the orders, and now commercialization has also started, but ramping up definitely takes a couple of more months, and once it starts, it will reflect in the numbers, so we will see the improved numbers from defense market, which will be in line with our annual guidance quite soon, or you can see from quarter two or quarter three. Great, sir. Nice to know that. The second one is on the international business performance, which has been by far the best if I look at past history. Now, is it possible for you to mention just qualitative details will do, which markets are doing well for you at the moment? How is Australia, Indonesia faring? And also, we had our plans to go in Saudi Arabia and Kazakhstan. So we are on that because this segment appears to be very, very promising on non-defense side at least. Yeah. So as far as overseas markets are concerned, the individual subsidiary-wise detail we normally share in the annual report, so you can refer to that. But as far as the momentum, which is above the normal momentum in the numbers, is mainly on account of very good business from South Africa. Just all subsidiaries are doing quite well, but South Africa is doing much better now compared to the couple of years back. And the performance is we were eagerly waiting for this kind of performance from last couple of years. We were trying a lot to improve those things. And finally, we can see these good sets of numbers from South Africa. Okay, sir. That's very helpful. Thank you very much. Thank you. Thank you, sir. The next question is from the line of Nitin Arora from Axis Mutual Fund. Please go ahead. Hi, sir. Thank you for giving me the opportunity. As exports continued to do good even in this quarter last year, and you said pipeline looks pretty decent. Sir, how are you thinking about the CapEx now? Because we also keep hearing and reading articles that government wants their own requirement is very high at this point in time. So how are you thinking about increasing capacity over the next two, three years if demand is so strong? Just one comment on that. Like we are sharing on all our previous calls that Solar is one of the most integrated ammunition players in the private market, and we have established plenty of facilities starting energetic materials, fusion, rockets integration, missile integration, drone facilities. We have done a lot on these parts, and we have received thousands of crores orders, so as we have said in our annual call that we are going to invest INR 2,500 crores in this financial year, and in the coming years also, we have a strong strategic program to expand our facilities, so we are moving ahead on that part, and we will see that the capacities of Solar as a company will be one of the best in its class and of a global scale. I got your point, sir. I was just asking more from that because demand is so strong, both domestic and exports, I've been highlighting. Do you see a chance of upgrading your CapEx? Is that what the question was more about? So, I think we have just finished the annual call, just one and a half time. So, in just five days, nothing changed in this part. Okay. Got it. Thank you very much, sir. All the best. Thank you, sir. The next question is from the line of Rahil Dasani from MAPL. Please go ahead. Yeah, hi. Am I audible? Yes, sir. Please go ahead. Yeah, good morning and thank you for the opportunity. I just wanted to get a better idea on our drone segment. Previously, we were into the smaller range and payload drone, the Nagastra. And now we have tied up with MALE for the higher range and payload model. So first of all, why this change? Because we have been getting very decent orders in Nagastra itself. Are we seeing a larger demand come in the 500-1,000 km range drones? And if you can quantify how large a demand or opportunity are we seeing for this particular model? I think we have shared a couple of times that the company is very well positioned in this market, especially on drone-based ammunition programs, which we say loitering munitions. So after successfully launching the Nagastra 1, we have started making Nagastra 2, Nagastra 3 also for some of the special applications. And as we are moving forward, definitely it's a natural growth for us, or it will be a natural growth for us to expand in the higher category of drones. So looking at those kind of opportunities, we are entering into the higher altitude and longer endurance levels of drones category. So we will see how we will establish our products for those applications. So we will come to know in the next couple of years. Okay, and being in service with our Nagastra 1 since so long, and since we have been in close contact with the government for all our orders, what sort of visibility or opportunity are we seeing for this particular, if you can quantify that? It will be very difficult for us to quantify this opportunity. We have to wait for the real opportunity or the real potential of this segment to unlock. Understood. Okay. And sir, we have been seeing a lot of drone demand, especially post-operations Sindoor. There has been an emergency procurement ongoing. How worried should we be about this demand sustaining as we have seen in the past that during emergency procurement, lots of demand comes in the short term, but then the demand dies in the next one to two years? Difficult for me to comment on this question. Okay. Sure. Thank you. Thank you, sir. The next question is from the line of Ankur from HDFC Life. Please go ahead. Yeah, good morning, Manish. Thanks for your time as always. First question was on the domestic explosives business. If you could just help us with the volumes for the current quarter, that is Q1. I'm sorry I missed that. And also, how are you seeing volumes? What will be the volume growth for the full year, obviously given the unseasonal rain and there's been some slowdown there on the mining side? So yeah, just to start off, if you could help us there. Yeah. Thank you, Ankur, for the question. Since as a policymaker, we do not share the international market volume, so we have discontinued for the domestic market also. Because if you see on the number front, domestic market hardly constitutes around 40% of our total revenue. Okay. So, sir, it's not on the volume side. Overall, what kind of growth would you be looking at on the domestic explosive side? Any guidance there that you can share? So, like we said, that we are targeting around 15% volume growth in this year. But if you look at our clarification that because of ugly monsoon and lower than expected heat wave resulted into lower demand for the power. And as a result, it has impacted the coal mining as well. If you leave this part aside, then definitely there is no dearth of growth for us in this market. So once this thing settles, which is a little abnormal to see that last year also there was above normal monsoon. And then in this summer, the heat waves were lower than the normal ranges. And then again, the early monsoon in this monsoon period. So that is impacting the demand. But otherwise, it is good for the long-term requirement angle because more availability of water will help to generate power uninterruptedly for especially for thermal power side. So we think that after the post-monsoon, the demand should be very, very good. Got that. Okay. Okay. So you've done a lot of CapEx program for the company which we acquired a couple of years back, which is in Rajasthan. And we also started our facility in Kazakhstan. So if you take these expansions into the consideration, definitely market penetration and the volume growth should start very soon. Okay. Fair. And just a second question. So then overall for the full year, I know since you're not giving a volume guidance anymore, any revenue guidance for the full year? I think the number was closer to INR 10,000 crores for FY 26. And within that, I think defense was around INR 3,000 crores. So if you just want to talk about how do you see the full year FY 26 top line within that defense and also in defense, which would be the products which would drive that growth for you this year? Some color there. Yeah. Yeah. I can show some color still on this part. If you look at our annual guidance of INR 10,000 crores, so we are still believing that we will definitely cross INR 10,000 crores in this financial year. And out of that, INR 3,000 should be from defense, and non-defense should add to around INR 7,000 crores. And as far as the products which will give the momentum, will be one of the key products is Pinaka series of rockets, which should start from end of Q2 or start of the Q3. Fair. Got that. Okay, sir. That's all from my side. Thank you. Okay. Thanks. Thank you, sir. The next question is from the line of Yogansh Jeswani from Mittal Analytics Private Limited. Please go ahead. Hello. Am I audible? Yes, sir. Please go ahead. Yeah. Sir, just a couple of questions on your drone. So like you were telling about the natural progression that you'll be doing in Nagastra 2 and 3 and rightfully so. But sir, we are also seeing a couple of bigger players coming in this market like NewSpace is there, Adani is there, Tata also. Though some of them are facing challenges in terms of their technical viability and all, but still there is a lot of decent serious competition coming in. So one, how are we thinking about this? And secondly, sir, we did some work and we realized that you have got good score in terms of your technical capabilities in this. So if you could just help us understand how much is this valuable versus a commercial and how will the pricing part work for these longer-range drones? So as far as the potential of these products are concerned, like I said, we are still in the development stage. We are looking at this higher category of drones as a part of our strategy. So once our products are developed or qualified, definitely we will see how to place our commercial part to take the orders of the total opportunity. As far as other players' challenges are concerned, I cannot comment on that. So we have to wait for the AON, which has been considered in the last week, that the country wants so much of higher category of drones. So we will see how it unfolds. But our company is definitely trying to enter into this league of higher category of drones. And we are confident that we will definitely have certain challenges to reach to that level. But as we have demonstrated in the past that we are one of a company which definitely achieves what we try to promise. So we need to wait for some period to give more light on these programs. Fair. And sir, on the cost side, will we be relatively cheaper compared to the existing foreign drones like the ID-1771? So I think we have not still reached to that stage where I can comment on the commercial part. But like you have seen that in Nagastra also, there were a couple of people participated, but our products were qualified from technical side. And then we were the lowest bidder as well. So I think we have fairly strong chances to enter in this and take orders, but we need to wait. Got it, sir. And sir, one more question from my end. So if you could broadly help us understand what are your internal timelines in terms of the design and development of this entire project, and especially given the fact that compared to our peers, we are even trying to make the engine in-house. So what is the readiness of the team? At what stage are we in? How confident are we? If you could just broadly help us understand all of those aspects, it will be really helpful. Yeah, that's a fair question, but we will share all these details at an appropriate time, so you need to wait for that. Fair enough, sir. Thank you, sir. I'll get back in with you and best of luck. Thank you. Thank you, sir. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your question to one per participant. The next question is from the line of Abhishek Mehra from DAM Capital Advisors Limited. Please go ahead. Yeah. Hi. Thank you for the opportunity. So I had a question on the order book position, like in terms of if I only see the historical quarterly defense order book position, it usually increases post Q1. So Q1 inflows historically remain lower. So is that reading correct? Since, repeat your question. I think this question is very irrelevant for us to answer because as and when we received orders, we shared with all the investors. There is no trend of defense market in the history of, say, if you take two years back, there were no orders, not much orders. In the last year, we have collected so many orders. You can expect the particular trajectory of getting orders on every quarter basis. Okay, sir. Fine. Fine. I'm just secondly just wanted to have an understanding on the defense tendering part. So are there any sharing of orders between L1 and the other bidders, let's say L2, where they will be matching the price of L1 and the orders are getting shared there? Does that happen generally? I think every tender has its own terms based on the requirement of the end users. And normally, sometimes it is 60%-40%, sometimes it is 70%-30%, sometimes it is L1 gets the whole order. So it varies from each tender to tender. Okay, sir. Okay. Fine. Yeah. Thank you, sir. Thank you, sir. The next question is from the line of Chirag from Centrum Broking. Please go ahead. Yeah. Hi. Thank you. Sir, question is on the overseas markets. So what kind of revenue outlook we have in overseas markets since Q1 has seen very strong scale-up, and whether Kazakhstan and Saudi Arabia plants will start commercial production this year? Yeah. We are trying to start our Kazakhstan plant in this financial year. Hopefully, by October, we should start the plant. And as far as revenue potential from this international business is concerned, we are doing at around 37%-38% of our total revenue of the company. Say in this year, if we have given a guidance of around INR 10,000 crores, so we are expecting around INR 4,000 crores from international market, INR 3,500 to INR 4,000 crores. Okay, sir. Thank you. That's helpful. Thank you. Thank you. Thank you, sir. The next question is from the line of Bharat Shah from ASK Investment Managers Limited. Please go ahead. Yeah. Hi, Manish. Yet again, a very creditable performance. Just one thing. I noticed on the new, I mean, the application of hyperinflationary accounting standard. Therefore, there is a loss recognized in the first quarter of INR 17.5 crore. There is an income recognized for the last year transferred to the reserve of INR 90 crores. So either Shalinee or Monish just wanted to understand, is this going to be recurring feature? Every quarter, this will be stated and taken into account, isn't it? Yes, sir. Shalinee here. We have hyperinflationary accounting Turkey. Currently, the figures are around INR 18 crores, which affected our P&L for this quarter, and INR 9 crores in reserves. This is as per the accounting standard and non-cash items, which will be accounted. Every quarter, this should be done, right? Wherever it applies, whichever geography it applies. Yes. Yes, and this quarter, if you see, we had, due to the uncertain economic uncertainties across the globe, we operate in various currencies. So as a result, even currency forex fluctuations were also there in the books as a result, which affected the EBITDA margin to some extent. So around 1.5% was on that behalf. On account of the currency fluctuation? Currency fluctuations and hyperinflation. As a result, other expenses went up by that extent. Hyperinflation plus currency fluctuation together had an adverse 1.5% impact in the current quarter. Yes, sir. Okay. Last year, I think it was a positive when it was taken to reserves. It was, yeah, last year hardly around 0.35%. Manish, given the fact that we'll be growing at a robust 35-odd% on revenue terms compared to last year, and assuming no other elements like currency and others affect, then would it be fair to assume, given also the fact that defense will become a larger percentage, international will become a larger percentage of the total turnover, both higher margin activity, overall margins in the current year should be higher than last year? Is that a fair assumption? Sir, like we have been saying that we normally expect or as a prudent practice, we feel that achieving around 27% is also a big achievement as far as the overall positioning is concerned. So in this year, like you said, or we have said in the last call also that we are targeting INR 10,000 crore in this financial year. And out of that, INR 3,000 will be approximately from defense, which means that definitely there is a big jump in the defense, which is a high-valued product. But at the same time, we should also understand that as we are entering into the more and more products, so definitely we need to spend more on the staff cost side, and we have to expand the capital base. So during certain period, you will see that staff cost has gone up, some other expenses have gone up, depreciation gone up. So these factors, if you take into account, the achieving margin of around 27% is a reasonable expectation from our side. Okay. Noted. And one last question, Shalinee. What is the gross debt and net cash position as of today? Sir, before answering on that part, you have asked on the translation and Shalinee explained on the forex loss account also, so since we are operating in many countries and many currencies are there, so foreign exchange loss is now part of our business. But in this quarter, it was little above that normal bandwidth, so around 0.8%-1% we lost additional loss because of that. And if you look at the staff cost also, there was increase of around 0.7% in the financial term. If you take both and add into the current EBITDA, so we are still at a higher trajectory of EBITDA margin side, and now she will explain on the debt part. So, Manish, I did see that, and that's entirely correct. Manpower cost has gone up. Obviously, investment in assets has resulted in depreciation going up. And these hyperinflation accounting impact also came in. Forex impact, I didn't know. So that is an additional factor. So that's completely understood. Thank you. Thank you, sir. Yeah. And as per the cash position, so around 31st March 2025, we were INR 100 crores plus net of cash position, and currently we are at INR 50 crores cash position positive. Net cash position. Net cash position. Correct. Okay. All right. Thank you. Thank you. Thank you, sir. The next question is from the line of Pratik Mukasdar from RNL Wealth. Please go ahead. Yeah. Congratulations on a solid set. My questions got answered in the previous questions. So thank you. Thank you, sir. As there are no further questions from the participants, I now hand the conference over to management for closing comments. I extend heartfelt gratitude to all the participants for their time. Thank you so much. Thank you, ma'am. On behalf of PhillipCapital, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.