SURYAROSNI - Surya Roshni Ltd. Share Price

The management of Surya Roshni Limited provided an optimistic outlook, focusing on growth across both key segments. In Lighting & Consumer Durables, they anticipate double-digit revenue growth for FY25, driven by innovation, premiumization, and expansion in professional lighting (e.g., LED street lights with a Rs.150 crore order book). They aim for double-digit EBITDA margins via cost optimization and backward integration under PLI schemes. A Rs.25 crore investment in a domestic wire business unit at Gwalior is expected to leverage their distribution network, targeting Rs.100"“300 crore revenue over three years.

For Steel Pipes & Strips, despite soft HR coil prices, volume growth (8% YoY in Q3) and capacity expansion are key. New facilities in Gwalior (spiral plant) and Hindupur (large-diameter pipes) will add ~260,000 tons/year capacity, targeting infrastructure projects (JJM, oil/gas). A Rs.500 crore capex over two years aims to boost capacity to ~19 lakh tons annually, focusing on high-margin products (API, spiral, galvanized pipes) contributing 45% of steel revenue. Export markets (Middle East, Canada, Europe) and a Rs.600 crore order book provide visibility. Management expects EBITDA/ton to rise from Rs.5,163 to Rs.7,000+ in two years via value-added mix and operational efficiency.

Overall, the company targets debt-free growth (Rs.222 crore cash surplus), margin expansion, and volume-led scalability, supported by stable steel prices and robust demand in infrastructure and consumer segments.

Question 1:
"Sir, I wanted to quickly understand from you that the previous concall that is Q2 concall, we had said that we can achieve 9 lakh tons volume this year, 9 lakhs and a few thousand tons this year. But for us to achieve that, we would really need to grow our volumes by 40%-45% Y-o-Y. So, that is my first question that do you think that this 9 lakh is achievable or do you want to revise the guidance for this FY25?"

Answer Summary:
The company revised its FY25 volume guidance downward to 8.8"“8.9 lakh tons (from 9 lakh) due to lower-than-expected demand in the API segment (impacted by general elections) and muted export growth amid global trade uncertainties. However, profitability was maintained through cost optimization and improved per-ton margins.

Question 2:
"Sir, next would be that again in the last couple of concalls, we said that in FY26 we can grow our volume to 12 lakh tons, 1.2 million tons. But the revenue would grow by 10%-12%. From 9 to 12 lakh, we are growing 33% tons but the revenue and volume are not matching. So, just wanted to understand, wanted your clarification that are these numbers, is my understanding correct?"

Answer Summary:
The company reaffirmed its FY26 target of 12 lakh tons, supported by ongoing Rs.500 crore capex (e.g., spiral plants, cold rolling expansions) to add ~6 lakh tons of capacity over three years. Revenue growth (10"“12%) will lag volume growth (33%) due to price erosion in steel pipes and a focus on value-added products.

Question 3:
"Sir, your spread, that is realization minus cost of production, is by far the best in the industry. But when we go from gross margin to EBITDA per ton, your overhead per ton is the highest. So, internally, have you thought about how to reduce it?"

Answer Summary:
Higher overheads are attributed to value-added product manufacturing (e.g., API, spiral pipes). Margins remain competitive vs peers, and EBITDA/ton will improve to Rs.7,000 over two years via premiumization, export growth, and operational efficiency.

Question 4:
"Sir, what is the status of our GP facility? When is it expected to come on stream?"

Answer Summary:
The GP facility project was canceled due to unfavorable ROI. Instead, the company is investing in large-diameter pipes at Hindupur and partnered with a GP coil manufacturer for long-term supply.

Question 5:
"Sir, broadly, where will the demand for API pipes come from? How do you see the demand for API pipes over the next 3 years?"

Answer Summary:
API demand is driven by government gas pipeline projects (e.g., cross-country lines, household distribution). Tenders, paused during elections, have resumed. The segment's EBITDA contribution will rise with higher value-added exports and new capacities.

Question 6:
"What is our net cash position at this point? And capex, this Rs.300 crores we are going to spend over the next 3 years. And our capacity, total steel pipe capacity will go to 18 lakh tons?"

Answer Summary:
Net cash stood at Rs.225 crores (Q3 FY25). Capex of Rs.500 crores over two years will expand capacity to 19 lakh tons by FY27. The company aims to maintain a net cash position post-investments.

Question 7:
"The Rs.25 CR capex we are doing in the wire business, is that included in the Rs.500 CR capex plan or is it apart from that?"

Answer Summary:
The Rs.25 crore wire business capex is separate. It targets Rs.100"“300 crore revenue in three years, leveraging existing distribution networks.

Question 8:
"Next year, in FY26, can we confidently say that the average quarterly volume run rate of 2.20 lakhs to 2.50 lakhs ton?"

Answer Summary:
FY26 quarterly volume is expected to average 2.2"“2.5 lakh tons, supported by new capacities (e.g., spiral plants, DFT mills) and export growth (15% annually, targeting Middle East/Canada).