Solar Industries shares fell another 4% on Wednesday to Rs 18,480 apiece on the NSE, extending their decline to more than 17% over two sessions as investors continued to digest the defence major’s Rs 12,951 crore acquisition of South Africa’s Omnia Holdings.
The stock had plunged nearly 14% on Tuesday following the announcement of the all-cash deal to acquire 100% of Omnia’s issued shares for $1.355 billion.
Despite the sharp selloff, Jefferies and Nuvama have advised investors to use the correction as an opportunity to add the stock, pointing to the potential benefits of the acquisition. The deal, Solar Industries’ largest overseas acquisition, is aimed at expanding its global commercial explosives and blasting solutions business, particularly across Africa’s mining markets.
The acquisition is expected to be completed in early to mid 2027, subject to customary conditions, including competition approvals under relevant jurisdiction. Upon successful completion of the transaction, Omnia will be delisted from the Johannesburg Stock Exchange and A2X Markets securities exchange.
Also read | Solar Industries shares crash 14% after acquisition of South Africa’s Omnia Holdings for Rs 12,951 crore
Jefferies on Solar Industries share price
Jefferies maintained its ‘Buy’ call for the shares of Solar Industries with a target price of Rs 28,160 apiece, implying more than 46% upside potential from the stock’s previous closing price of Rs 19,250 apiece. The international brokerage said the bulky acquisition could dilute the company’s FY28-29 EPS by 4-6%, and that for FY30 by 1% on normalised growth assumptions at Omnia. Defence share is likely to fall to 22-25% by FY30, as against 35-40% expected earlier.
However, Jefferies believes the correction offers a heightened opportunity to own a business with a 30% EPS CAGR potential and 25%+ ROE even considering the acquisition. Solar Industries saw its profits rise 10x in the last decade between market share gains globally in explosives, an acquisition in South Africa in 2024 and its foray in defence, the international brokerage noted, adding that management has a healthy track record on sound capital allocation and cash flow focus.“While share of defence on a consolidated basis will likely reduce, we believe that if the EPS CAGR and ROE profile of the consolidated entity remains at 30%+ and 25%+, respectively, any derating should be limited. Solar will likely move from a net cash entity to net debt:equity on consolidation of 1.2x in FY28, but this should quickly reduce to 0.5x by FY30 given strong cash flows,” Jefferies said.
Also read | Solar Industries to acquire South Africa’s Omnia for Rs 12,951 crore in biggest global expansion push
Nuvama on Solar Industries share price
Nuvama also has a ‘Buy’ call on the shares of Solar Industries with a target price of Rs 23,435 apiece, implying around 22% upside potential from the stock’s previous closing price. The brokerage said the acquisition will give Solar Industries enhanced control over Ammonium Nitrate sourcing, currently being externally procured, while expanding global reach.
Although its defence mix falls to 22% (post-deal) versus 27% of FY26 revenue, Nuvama views the debt-funded deal as pro-growth and self-financed.
Solar Industries share price
Solar Industries shares have dropped around 17% in one week and 7% in a month, but overall jumped more than 53% in 2026 so far. The stock has gained 27% in one year.
In the longer term, the shares of the explosives-maker have delivered explosive returns for its shareholders, rallying over 300% in three years and around 850% in five years. The company currently has a market capitalisation of around Rs 1.68 lakh crore.
Also read | Solar’s $1.3 bn bet is a turn for India’s defence-industrial complex
Disclaimer: This article has been written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or an Investment Adviser. Debaroti Adhikary and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.