Detailed Narrative
Q3 FY26 Consolidated Performance and Financial Health
Surya Roshni reported a consolidated revenue of Rs. 1,927 crores for Q3 FY26, marking a 3% year-on-year growth. EBITDA stood at Rs. 148 crores with a margin of 7.7%, and PAT was Rs. 80 crores. For the nine-month period, revenue reached Rs. 5,377 crores, EBITDA Rs. 371 crores, and PAT Rs. 188 crores. The company maintains a strong financial position as a zero-debt entity with a net cash surplus of Rs. 245 crores as of December 31, 2025, alongside a net working capital cycle of 61 days, ROCE of 17.57%, and ROE of 12.65%.
Lighting & Consumer Durable Segment Growth Drivers
The Lighting and Consumer Durable segment delivered a stable operating performance in Q3 FY26, with revenue growing 6% year-on-year to Rs. 476 crores and a strong sequential growth of nearly 10% over Q2 FY26. This growth was primarily fueled by festival season demand, healthy volume across consumer lighting categories, and robust performance in professional lighting, including infrastructure-led applications. Despite elevated input costs, the segment maintained an EBITDA margin of approximately 8.8%.
Steel Pipe & Strip Segment: Inventory Loss and Strategic Focus
The Steel Pipe and Strip segment recorded revenue of Rs. 1,451 crores in Q3 FY26, with a dispatch volume of 2.37 lakh tonnes. EBITDA for the segment was Rs. 106 crores, with margins of 7.3%. Profitability was notably impacted by a one-time📎 inventory loss of around Rs. 500 per tonne due to a sharp correction in steel prices during October and November. However, EBITDA improved sequentially by about 4% quarter-on-quarter, and the company is focusing on capacity expansion and new DFT lines for sustained growth in hollow section and structural pipes.
Export Market Diversification and ONGC Opportunity
Exports contributed significantly to Q3 FY26, accounting for almost 19% of total volume and growing nearly 10% year-on-year. To mitigate headwinds from EU quotas and the Carbon Border Adjustment Mechanism, Surya Roshni is actively expanding into Middle Eastern and African markets. A significant opportunity has emerged in the API segment, with ONGC approving Surya Roshni's ERW pipes as an alternative to Seamless pipes, a first for an Indian company, with an initial 4,500-tonne order already dispatched.
Ambitious Growth Targets for FY27
Management has set ambitious targets for FY27, projecting a minimum Steel Pipe volume of 1,100,000 tonnes, representing 17-18% growth. The Steel division's EBITDA is targeted at Rs. 540-550 crores for FY27, with an EBITDA per tonne of at least Rs. 5,000. For the Lighting division, revenue is expected to reach around Rs. 2,100 crores (15% growth) with an EBITDA of approximately Rs. 200 crores. Overall company EBITDA is projected to reach Rs. 750 crores by FY27.
Capital Allocation and Shareholder Value
The company is undertaking CAPEX of around Rs. 250 crores in existing plants, including Rs. 160 crores for internal projects and Rs. 100 crores for new work orders. Management acknowledged analyst suggestions regarding demerger and buybacks, confirming their commitment to providing shareholder advantages, including interim dividends, and will place the buyback suggestion to the Board. The focus remains on disciplined execution and optimal capital allocation to drive future growth.