Solar Industries eyes Rs 100 cr revenue from defence business in FY18Industrial and military explosives manufacturer Solar Industries India (SIIL) is expecting Rs 100 crore revenue from its defence business this fiscal as it eyes 20 per cent increase in total income.
Industrial and military explosives manufacturer Solar Industries India (SIIL) is expecting Rs 100 crore revenue from its defence business this fiscal as it eyes 20 per cent increase in total income.
"We are bullish about the government's initiatives in the defence sector. It is not only focusing on strengthening it but is also promoting indigenous defence production.
"We already have an order book of Rs 142 crore in the defence business and we expect a topline of Rs 100 crore from this segment this fiscal," the company's Chief Financial Officer Nilesh Panpalliya told PTI here.
He said the government's 'strategic partnership programme' and Defence Procurement Procedure 2016 guidelines are expected to give boost to indigenous manufacturers.
"In March this year, the government floated RFP's for procurement of eight types of ammunition items like large calibre gun propellants, tank ammunition, artillery fuzes, rockets and gun ammunition. As we manufacture these products we intend to participate in these tender processes," Panpalliya said.
Currently, SIIL's defence business contributes nearly one per cent of the total revenues. However, with the company expecting to bag new orders, which are likely to be awarded in the next one year, it is hopeful that the defence segment's contribution could increase significantly.
The company entered into the defence sector four years ago and has set up India's first HMX plant in private sector, a large composite propellant plant and facilities for producing various other products like pyros and war heads.
The facility manufactures HMX and HMX based compositions like Octol, Oma and Okfol for high explosive anti-tank ammunition and missiles like Akash, LR Sam, Invar and Konkur.
He further said the company is eyeing a 20 per cent increase in its total income this fiscal, backed by the growing demand for industrial explosives in the coal mining as well as infrastructure segments.
For fiscal 2016-17, SIIL's gross sales increased by 9 per cent to Rs 1,711.28 crore from Rs 1,574.01 crore in FY16.
"Coal and Power Ministry's target of achieving one billion tonnes of coal production from CIL by FY20 will create demand of 80 million tonnes of explosives and we will capitalise this demand with our existing capacity," Panpalliya said.
Similarly, there is renewed focus on infrastructure and housing sectors. "Both put together, we see a healthy growth in demand for our products. Our total order book is around Rs 800 crore and we expect that to go up given these opportunities," Panpalliya said.
Besides, the company also has manufacturing units in Turkey, South Africa, Nigeria and Zambia, and the revenues from exports contribute to nearly 28 per cent of the total income.
"The demand in overseas market is showing signs of improvement and there is a boost in the India's infrastructure segment, which is beneficial for us," he added.