Surya Roshni Limited (SURYAROSNI) Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to Surya Roshni Limited Q2 and H1 FY '27 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. Please note that this conference is being recorded. I now hand the conference over to Mr. Raju Vista, Managing Director, for his opening remarks. Thank you, and over to you, sir.

Thank you, and good afternoon, everyone. On behalf of Surya Roshni, I extend a very warm welcome once again to everyone for joining us today. On this call, we are joined by Mr. D.P. Singhal, CFO and Company Secretary; Mr. Gaurav Jain, our CEO of Steel Division; Mr. Asitrade CEO of Lighting and Consumer Durables, Mr. Nate Single, Executive Director and our Investor Relations adviser. As we approach Diwali explained by warmest wishes to you annual families for the bright and prosperous Diwali. I hope everyone had an opportunity to go through the financial results. Now quickly moving on to the overall financial performance highlights. Q2 has been a quarter of record performance of Rose Consolidated net revenue grew by 33% year-on-year and 20% sequentially to INR 2,448 crores, INR 143 crores and 877 crores, up 19% and 29% quarter-on-quarter, respectively. For H1 FY '27, consolidated revenue grew 30% year-on-year and INR 4,495 crores. EBITDA grew 18% to INR 263 crores and PAT grew by 26% to INR 136 crores, driven by 22% volume growth in steel pipe and stream and 16% revenue growth in lighting and consumer durable. With a combined order of over INR 1,400 crore cross both businesses. And the second half traditionally being our strongest period, we are -- we enter H2 FY '27 with strong visibility and remain on track to deliver our FY '27 target and promises. We remain zero debt tax company with a cash surplus. Now coming to lighting and consumer durables. The lighting and consumer durables segment deliver its best ever second quarter with even of INR 507 crores, up by 17% year-on-year and 11% sequentially. Even though Diwali falls in Q3 this year for H1 FY '27, revenue grew 16% to INR 964 crores. EBITDA for Lighting for the quarter stood at INR 40 crores, with margins steady sequentially to 7.8%. Input cost rose across copper, aluminum, steel and poles material in-house manufacturing absorbed much of the increase, and we are also passing on price increases quickly. Professional Lighting ended the quarter with an order book of over INR 200 crores, our strongest in many quarters giving clear execution visibility for H2 FY '27. We remain on track for our FY '27 guidance of 22 to 23 percent value growth and about 25% volume growth or about INR 2,200 crores of revenue and INR 200 crores of EBITDA. With Diwali festival in Q3, that is running at full capacity, a strong order book and expanding distribution, we expect a better -- even better second half. Beyond FY '27, we target about 20% value growth in FY '28 and about 15% of CAGR through FY '30 with EBITDA margins of about 9% to 9.5%. Moving on to the pipe and strip Q2 '27 was a defining quarter for steel pipe and segment, volume reached a record of 2.67 lakh tonnes up by 23% year-on-year and 17% sequentially. Ahead of our guidance of 2.6 lakh tonnes, making a seasonal weak quarter, our strongest revenue get year-on-year to for 1,941 crores. For H1 FY '27, volume grew by 22% to INR 4.96 lakh tonne revenue, 35% to INR 3,531 crores for the quarter. EBITDA stood INR 103 crores with EBITDA per ton improving to INR 415 per tonne from INR 4,06 in Q1 FY '27. Export rose 64% year-on-year to about 65,000 tonnes with U.S. volumes more than doubling sequentially. Value-added product contribute about 40% of entire volumes and volume section grew 35% as a rising steel price from August let the distributor to restock. We enter H2 with our strongest visibility in years. Our order book stands at about INR 1,200 crores, including about 1 lakh tonne of port order worth crores of INR 800 crpres which about 80,000 tonnes are API pipes, all for execution in Q3 and Q4. Domestic oil and gas tendering has after a prolong land and our domestic API order book has grown to about 20,000 metric tons. Having delivered about 5 lakh tonnes in H1, we are confident of about 6 lakh tonne in H2 and our FY '27 volume target of 11 lakh tonnes, which exports at 22% to 25% of volumes. Looking further ahead, we target about 14 lakh tonne in volume in FY '28 and EBITDA per ton of about INR 4,600 to 4,000 and about 2 million tonnes by FY '30. Now I request our CFO, Mr. BB Singal to share his thoughts.

Thank you, respected MDs and we tomato all participants on the call. For third quarter, the revenue was INR 2,448 crores as compared to INR 1,845 crores a growth of 33% year-on-year basis. EBITDA NPAT stood at INR 143 crores and INR 17 crores as compared to INR 41 crores and INR 74 crores in Q2 FY '26, a growth of 1% and 3% year-on-year basis, respectively. For H1 FY '27, the revenue was INR 4,495 crores as compared to INR 3,450 crores, a growth of 30% y-on-y basis. EBITDA and PAT stood at INR 263 crores and INR 136 crores as compared to INR 223 crores and INR 108 crores a growth of 18% and 26% year-on-year basis, respectively. In lighting and consumer durables, revenues for the quarter stood at INR 507 crores as against INR 434 crores. a growth of 17% Y-on-Y basis. Vita and PBT stood at INR 40 crores and INR 28 crores as compared to INR 39 crores and INR 29 crore in Q2 FY '26. For H1 FY '27 revenue stood at INR 964 crores, as against INR 832 crores, a growth of 16% Y-o-Y basis. EBITDA and PBT stood at INR 76 crores and INR 51 crores as compared to INR 70 crores and with INR 51 crores, a growth of 8% and 1%, respectively. Industry pipes and trips during the quarter, the vendor was INR 1,941 crore as compared to INR 1,411 crores, a growth of 38% year-on-year basis. The per metric tonne stood at INR 4,105 compared to INR 5,013 in Q2 FY '26 and INR 46 in Q1 FY '27. EBITDA and PBT stood at INR 103 crores and INR 75 crores as against INR 102 crores and INR 70 crores, a growth of 1% and 7%, respectively. For FY '27, the revenue was INR 3,571 crores as compared to INR INR 2,618 crores, a growth of 30% buy-on-by-basis. Beta with EBITDA per metric ton of INR 4,059 compared to INR 4,037. EBITDA and PBT at INR 188 crores and INR 132 crores as against INR 154 crores at INR 95 crores, a growth of 22% and 40%, respectively. In Q2 FY '27, our net working capital cycle was 63 with a return on capital employed ROC of 15.74% and return of equity ROE of 11.35%. We continue to be a zero dot company with a cash surplus of INR 75 crores as on September 26. With this, I conclude the presentation, and we can now open the floor for further questions and answers.

[Operator Instructions] The first question is from the line of Keshav Garg from Counter Cyclical PMS.

Sir, my question is regarding our EBITDA per tonne for the Steel division, which has come around INR 4,000 per tonne for the first half and sir, going forward, also, we are expecting it to be around INR 45 crores, INR 4,600 per tonne versus our earlier guidance of over INR 550 per ton. So should we expect this number of around INR 4,000, INR 4,500 per tonne to be the new normal for profitability of steel vision?

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[Operator Instructions] Next question is from Saket Kapoor from Kapoor & Co.

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[Operator Instructions] We take the next question from Rehan Jin from VisManagers.

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