ICRA Limited has reaffirmed its highest short-term credit rating of [ICRA]A1+ for the Rs. 500-crore commercial paper programme of Solar Industries India Limited (SIIL). The rating was communicated to the stock exchanges through the company’s required regulatory filings.
According to ICRA, the rating reflects Solar Group’s strong position in the commercial explosives market and its growing presence in the defence sector. SIIL supplies explosives to major customers, including Coal India Limited and Singareni Collieries Company Limited, while also expanding its business in international markets.
The defence business has emerged as a major growth driver for the company. As of March 31, 2026, the group had a total defence order book of more than Rs. 21,000 crore. This includes a significant Rs. 6,084-crore order for Pinaka rockets. Government efforts to promote indigenous defence procurement and domestic manufacturing have supported the company’s expansion in this segment.
Defence revenue increased to around 27% of consolidated revenue in FY2026, compared with 18% in FY2025. Overall, SIIL reported a 30% increase in revenue during FY2026, reaching Rs. 9,837.7 crore. Its operating profit margin improved to approximately 26%, supported by higher contributions from defence contracts and exports.
The company also maintained a strong financial position. Its total debt-to-OPBDITA ratio stood at 0.6 times, while interest coverage remained strong at 19.6 times in FY2026. SIIL had Rs. 584 crore in cash and cash equivalents, while expected net cash accruals of around Rs. 1,900 crore are expected to support debt repayment and capital expenditure.
However, ICRA highlighted risks from fluctuations in raw material prices, particularly ammonium nitrate, foreign exchange movements and regulatory requirements related to explosives manufacturing. The agency is also monitoring ongoing legal proceedings concerning corporate governance disputes before the NCLT.
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