Surya Roshni Limited

Surya Roshni reported a robust Q4 FY25, with consolidated revenue growing 3% year-on-year to ₹2,146 crores. EBITDA saw a strong 22% year-on-year growth to ₹211 crores, and the EBITDA margin expanded by 155 basis points to 9.85%. Profit after tax (PAT) increased by 25% to ₹130 crores. For the full year FY25, revenue stood at ₹7,436 crores, a 5% decline from the previous year primarily due to lower HR coil prices, but EBITDA improved by 4% to ₹609 crores, with PAT growing 5% to ₹347 crores.

The Lighting & Consumer Durables business delivered a healthy performance despite industry challenges^🌐, achieving 10% year-on-year revenue growth in Q4 FY25 to ₹458 crores. For FY25, revenue grew 8% to ₹1,690 crores, with EBITDA at ₹162 crores. The company is targeting double-digit revenue growth for FY26 and is entering the domestic wiring cable market with a planned investment of ₹25 crores, aiming for ₹100 crores revenue in FY26 and ₹500 crores in the next 3 years, leveraging its 3 lakh electrical retail outlets.

The Steel Pipes and Strips segment achieved a historical quarterly sales volume of 2.60 lakh tons in Q4 FY25, representing a 9% year-on-year growth. For the full year, total volume reached 8.8 lakh tons, the highest annual volume in the company's history. Q4 FY25 revenue was ₹1,688 crores, with EBITDA per ton improving 14% year-on-year to ₹6,708. The company plans to increase its total capacity from 1.2 million tons to almost 2 million tons in the next three years, with significant additions from Bahadurgarh (1.36 lakh tons), Gwalior (60,000 tons spiral plant), Hindupur (1.5 lakh tons), and a new greenfield project (3 lakh tons).

Surya Roshni is now a zero-debt company with a net cash surplus of ₹342 crores as of March 31, 2025. The company has outlined a ₹500 crores capex plan over the next two years, with ₹250 crores allocated for greenfield projects and ₹125 crores for the Hindupur facility. A final dividend of ₹3 per share was declared, bringing the total dividend for FY25 to 170%, demonstrating a commitment to 100% annual dividend growth. Net working capital cycle improved to 55 days from 65 days, and inventory days reduced to 38 from 48 days.

The company is targeting a sales volume of 1.1 million tons for FY26 and expects EBITDA per ton to improve to ₹5,800-₹6,000. Value-added products, currently 44% of revenue, are targeted to reach 55-60% in the next three years. Significant export opportunities exist in the US market for API oil and gas 5CT pipes, with favorable duty rates (2.3% vs 19%), and the company aims to export 20,000 metric tons this year. Overall pipe business volume growth is projected at 12-15%, with structural pipes growing at 20% annually.

Management believes both Lighting & Consumer Durables and Steel Pipes businesses have become sizable, and a demerger is seen as the right time to unlock value for shareholders. The company is actively pursuing this with the board. The strategic focus remains on operational efficiencies, better product mix, and value-added products to enhance profitability, even with conservative volume guidance, prioritizing margins over sheer volume.