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ICICI Securities: Solar Industries - Navigating A Weak External Environment

Solar Industries India’s overseas margins in 2019-20 have come as a surprise, ICICI Securities says in a research report.



Solar panels stand at a solar farm. (Photographer: James MacDonald/Bloomberg)
Solar panels stand at a solar farm. (Photographer: James MacDonald/Bloomberg)

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

Solar Industries India Ltd.’s overseas margins came in as a surprise.

While we factor this in our earnings estimates, we also note that the combined South Africa and Australia business loss reached Rs 830 million in FY20. This can only improve hereon, hence margin improvement in overseas business is likely.

Overseas revenue growth of 6% was another positive surprise. Trade and infra revenue drop of 49% YoY / 34% QoQ has been managed well – as can be seen in the realisation trend.

The Company must have opted for proactive pricing strategies given the challenging external environment and the company’s dominant market share.

Nevertheless, whether such strategies can continue to deliver in absence of meaningful turnaround in external demand needs to be seen.

Click on the attachment to read the full report:

ICICI Securities Solar Industries Q1FY21 Results Update.pdf

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