Scripscan:Solar Explosives Ltd
Cmp:400
Traded in:Nse-bse
Story:Solar explosive is one of the largest explosives and explosive-initiating devices manufacturer in the world.It posses one of the most modern integrated explosive manufacturing facility.It buys ammonium but manufactures other raw materials in-house.The backward integration helps it to cope with its raw materil costs by having better margins in its products.It has a capacity of 175,000 tonnes of explosives, 140 million detonators and 20 million metres of detonating fuse.The explosives industry caters to the mining and infrastructure sector both of which are booming bigtime.The industry itself is a 1600crs industry and its growing at a very fast pace.Coal industry accounts majority for it revenues and with soaring prices of coal and strong demand from metals, power and cement industries, which are among the major users of coal, will lead to more coal mining operations and therefore would boost the demand for explosives.SEL is a key supplier to Coal India and has recently acquired two coal mining and selling rights and has posted about 60% year-on-year growth in its sales and adjusted PAT for this quarter.The company is setting base in Nigeria with a total capacity of about 10,000 mt and is also eyeing another location in Africa.Further, the company is venturing into specialty chemicals used in improving the working conditions in open cast mines.With all these developments,Solar explosive is set to do wonders in the bourses.The company is expected to post a 68% jump in sales and 80% jump in profits this fiscal.Its not a valuation play so therefore glancing through the numbers wont be of any good.Booming demand,high product prices,strong pedigree,expansions would catapult the company into a different league.A great buy altogether.
Regards,
Arun
I can be reached at:arunanalyst@rediffmail.com
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Wednesday, August 27, 2008
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