Solar Industries is fundamentally an energetic-materials company - it makes things that go boom, whether for mining or for missiles. It began in 1995 as a small explosives maker in Nagpur and has since grown into India’s largest manufacturer in the space, competing globally by following a single recurring playbook: backward-integrate to control costs, develop technology in-house, and use the cash from one engine to build the next. That approach turned a regional explosives supplier into a multinational with a fast-scaling defence arm, all anchored by the same core expertise in handling and harnessing explosive energy. # Business segments Five engines at different stages - a hydrocarbon cash cow, two consumer platforms at national scale, and a green-energy bet under construction - each built with the cash flows of the one before. ## 1. Industrial explosives: the cash engine that built everything else **The company makes and delivers the explosives that break rock for mines, roads and tunnels, and it earns by the tonne of product sold or the tonne of rock blasted - a model built on making its own raw materials so it keeps more of the margin.** - **Backward integration is the moat** - ammonium nitrate alone accounts for 65% of raw material cost, and while it is imported and sourced from multiple global suppliers, the company manufactures emulsifiers, detonator shells, PETN, TNT, RDX and other inputs in-house, which means it is not held hostage by supplier pricing or shortages. - **Factories sit next to customers** - every bulk explosives plant is located within a 50-60 kilometre radius of major mining regions, because transporting explosives is dangerous and expensive; this proximity creates a natural barrier for distant competitors. - **Long contracts with price pass-through** - the company writes escalation clauses into its agreements, so when raw material costs rise it can pass the increase to customers, protecting its profitability through commodity cycles. - **Licences limit the competition** - ammonium nitrate is classified as an explosive under Indian law, requiring a licence for production, distribution, sale and stocking; combined with clearances from the Chief Controller of Explosives and the Directorate General of Mines Safety, this regulatory wall keeps the playing field small. - **Global reach, local supply** - with 32 plants in India and 10 more across Nigeria, Zambia, South Africa, Turkey, Tanzania, Indonesia, Thailand, Australia, Ghana and Kazakhstan, the company supplied 600,000 metric tonnes of explosives in FY25, making it the largest supplier to Coal India Limited and a partner to over 225 customers with decade-plus relationships. ## 2. Defence and aerospace: the future built on the past **What started as a bet on private-sector defence manufacturing in 2010 - a full decade before the government opened the sector - has become a standalone platform making everything from hand grenades to rocket systems, with an order book exceeding ₹21,300 Crores.** - **First-mover advantage in a closed market** - the company entered defence in 2010, before privatisation was even on the table, giving it a ten-year head start in research, testing infrastructure and manpower that latecomers cannot easily replicate. - **It makes the whole munition, not just a part** - the Nagpur facility is one of the world’s most integrated defence manufacturing sites, producing high-energy materials (HMX, RDX, TNT), propellants, warheads, and complete rockets and missiles under one roof, which speeds up development and cuts dependency on outside vendors. - **Pinaka is the flagship contract** - a ₹6,084 Crores order from the Ministry of Defence for the Pinaka multi-barrel rocket launcher system, covering Enhanced Range rockets and Area Denial Munitions, anchors the domestic revenue stream and proves the company can deliver at scale. - **Exports are already nearly half the order book** - of the ₹21,300 Crores-plus defence order book, close to 40% comes from export contracts worth over ₹8,500 Crores, showing that the products meet international standards and are not just dependent on Indian government procurement. - **Loitering munitions and counter-drone systems are the next wave** - the ‘Nagastra’ family of loitering munitions (480 units of Nagastra-1 already supplied to the Indian Army) and the ‘Bhargavastra’ counter-drone system represent indigenous intellectual property in high-growth segments where demand is rising globally. # Group structure and partners **The listed parent, Solar Industries India Ltd, runs the industrial explosives business directly while channelling defence through a wholly owned subsidiary, with international operations held through local entities that borrow in their own currencies to limit forex risk.** - **Solar Defence and Aerospace Limited is the defence vehicle** - formerly called Economic Explosives Limited, this wholly owned subsidiary holds the key Ministry of Defence contracts, operates the 1,080-acre Loiter Munition Test Range and the 1.27-kilometre UAV runway in Nagpur, and signed the ₹12,700 Crores MoU with the Maharashtra Government for a mega defence project. - **Emul Tek Private Limited consolidates domestic acquisitions** - this subsidiary absorbed Blastec India in 2021 and Rajasthan Explosives and Chemicals Limited in 2024, expanding the group’s geographic reach in the domestic industrial explosives market. - **International subsidiaries operate with local-currency borrowings** - the group runs manufacturing units in 10 countries through local subsidiaries, funding them in local currency to protect against exchange-rate swings, while hedging all imports and keeping export receivables open. - **Strategic bets on space and autonomous systems** - equity investments in Skyroot Aerospace (space launch vehicles) and ZMotion (UAVs) extend the group’s technology footprint beyond its core explosives expertise into adjacent high-growth domains.