Solar Industries shares plunge 17% in 2 days. Why Jefferies, Nuvama still see up to 46% upside

Solar Industries shares have experienced a sharp correction, falling over 17% in two trading sessions. This decline follows the company's announcement to acquire South Africa's Omnia Holdings for approximately Rs 12,951 crore. The move is a significant strategic step for the Indian explosives major, expanding its footprint into the African market and diversifying its revenue streams beyond domestic operations.

Despite the recent volatility, the stock has attracted attention from major brokerages. Jefferies and Nuvama have maintained a 'Buy' rating on the stock, citing the long-term earnings growth potential that the acquisition is expected to unlock. They view the deal as a strategic fit that leverages Solar Industries' strong cash flows and operational expertise to drive value in a new geography.

Investors should monitor the execution of this large-scale acquisition. Key focus areas include the integration timeline, the realization of synergies, and the company's ability to manage its debt levels post-deal. The market will also be watching for updates on the company's future growth guidance and how the new African operations perform in the coming quarters.