Surya Roshni Limited (SURYAROSNI) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Surya Roshni Ltd. Q2 H1 FI27 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 now the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing start then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rajiv Vistav, Managing Director, for his opening remarks. Thank you, Vanuva Thiyosa.

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. B.B. Singhal, CFO and Company Secretary, Mr. Gaurav Jain, CEO, Steel Division, Mr. Vashumitra Pandey, CEO, Lighting and Consumer Durable, Mr. Narej Singhal, Executive Director, And S.J., our investor relations advisor. As we approach Diwali, I extend my warmest wishes to you and your families for a bright and prosperous Diwali. I hope everyone had an opportunity to go through the financial regions. Now, quickly moving on to the overall financial performance highlights. Q2 FY27 has been a quarter of record performance of Surya Roshni. Consolidated revenue grew by 33% year-on-year and 20% sequentially to 2,448 crore. Habitat stood at 143 crore and pet at 77 crore. Up 19% and 29% quarter-on-quarter respectively. For H1FY27, consolidated revenue grew 30% year-on-year and 4,495 crore. EBITDA grew 18% to 263 crore and PET grew by 26% to 136 crore. 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 1,400 crore across both businesses, And the second half, traditionally being our strongest spirit, we enter H. We enter H2F527 with strong visibility and remain on trade to deliver our F527 target and promises. We remain a zero debt company with a cash surplus. Now coming to lighting and consumer durable. The lighting and consumer durable segment deliver its best ever. Second quarter with revenue of 507 crore, up by 17% year-on-year, and 11% Also, Diwali falls in Q3 this year for H1F527. For the quarter, it's two. The order book of our 200 crore, our strongest in many quarters, giving clear execution visibility for H2 FY27. We remain on track for our FY27 guidance of 22% to 23% value growth and about About 25% volume growth, or... Kali festival in Q3, factories running at We expect a better, even better second half. Beyond F527, we target about 20% value growth in F528 and about 15% of CAGR through F530 with EBITDA margins of about 9.5%. Now moving on to the steel pipe and strip, Q2 FY27 was a defining quarter for steel pipe and strip segment, volume rich, a record of 2.67 lakh tons, up by 23% year on year. Ebitda for the quarter stood at 103 crores, with EBITDA per ton improving to Rs 4,105 per ton. From... 4,060 in Q1 F527. Thank you. And hollow section grew 35% as rising steel price. We enter H2 with our strongest visibility in years. Our order book stands at about 1200 Thank you. 80000 tons are API pipes, all for execution in Q3 and Q4. Domestic oil and gas tendering has revived after a prolonged lull, and our domestic API order book has grown to about 20000 metric tons. Having delivered about 5 lakh tons in H1, we are confident of about 6 lakh tons in H2. Further ahead, we target about 14 lakhs tonne in volume in FY28 and EBITDA per tonne of about 4,600 to 4,800 rupees and about 2 million tonne by FY30.

Now, I request our CFO, Mr. B.B. Singhal, to share his thoughts. Thank you, respected MD, sir, and a very good afternoon to all the participants on the call. For the quarter, the revenue was 2,448 crore as compared to 1,845 crore, a growth of 33% year-on-year basis. Beta and PET stood at Rs. 143 crore and Rs. 77 crore as compared to 141 crore and 74 crore in Q2 FY26, a growth of 1% and 3% year-on-year basis, respectively. For H1 FY27, the revenue was 4,495 crore as compared to Rs. 3,450 crore, a growth of 30% Y-on-Y basis. Beta and pad stood at at least 263 kg. and Rs. 136 crore as compared to 223 crore and Rs. 108 crore, a growth of 18% and 26% year-on-year basis, respectively. In lighting and consumer durable, revenues for the quarters to dead Rs. 507 crore as against 434 crore, a growth of 17% on Y on Y basis. Abita and PBT. For H1 FY27, revenue stood at Rs. 964 crore, as against Rs. 832 crore, a growth of 16% Y-on-Y basis. Abita and PBTs stood at Rs.76 crore and Rs.51 crore. As compared to 70 crore and Rs. 51 crore, a growth of 8% and 1% respectively. In the pipes and strips, during the quarter, the revenue was 1,941 crore as compared to 1,411 crore, a growth of 38% year-on-year basis. The beta permit is 4,105. Compared to 5,013 in Q2 FY26 and Rs.4006 in Q1 FY27. Beta and PPT stood at Rs.103 crore and Rs.75 crore as against Rs.102 crore and Rs.70 crore, a growth of 1% and 7% respectively. For H1 FY27, the revenue was 3,531 crore. As compared to Rs. 2618 crore, a growth of 30% Y on Y basis, with EBITDA per metric ton of Rs. 4059, compared to Rs. 4037. EBITDA and PPT stood at Rs. 188 crore and Rs. 132 crore, as against Rs. 154 crore and Rs. 95 crore, a growth of 22% and 40% respectively. In Q2, FY27, our net working capital cycle was 63 days with a return on capital employed, ROCE, of 15.74% and return of equity, ROE, of 11.35%. We continue to be a zero debt company with a cash surplus of 75 crore as on September 30, 26. With this, I conclude the presentation and we can now open the floor for further questions and answers.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Keshav Kirk from Counter-Cyclical PMS. Please go ahead.

Sir, thank you for this opportunity. Sir, my question is regarding our EBITDA per ton for the steel division, which has come around Rs.4,000 per ton for the first half. And, sir, going forward also, we are expecting it to be around Rs.4,500, Rs.4,600. So, should we expect this number of around 4,000 to 4,500 per ton to be the new normal for profitability of steel division?

Thank you. And second, because the price increase in the case of our export and our API business is a fixed business, like the trade business, the price increase will automatically pass on. So, the benefit of that will get us in the quarter of three. So, new normal is not possible, but gradually, our EBITDA has an improvement. So, going forward, H1 was 4,000, and H2 was 4,100. So, Q3 के अंदर में 4800 to 4900 हम एस्पेक कर रहे हैं, और Q4 के अंदर में 5000 रुपया बर्टन से उपर हो जाएगा. So, minimum new normal मुझे लगता है 5000 रुपया बर्टन का है, और पूरे साल भर में भी जो है, उसके आज़ पास में ही हम लोग इस साल का भी हमारा रहेगा.

Sir, as far as our steel and electronic business, this is a competitive environment, demand conditions, raw materials, many moving parts, which are not in our control. So, sir, all that we can do is to put our best foot forward. Sir, but the thing in our hands, when we didn't do that, despite the repeated guidance, there is a disappointment for us. If we see that our stock was 5 years ago, where we were, today we were debt-free. Sir, the government's policy was very conducive. Thank you. Thank you.

देखिए वो अल्रेटी हमारे कार्ट्स में है और होफुली जल्दी हम जो है बोर्ट से बुर्बल लेकर कि उसकी एनाउस्मिन भी करेंगे और देखिए इतना दुनिया वर्मा टॉर्मोईल है इस समय जो हम बेस्ट कर सकते हैं अपने अफ़र्ट से वो कर रहे हैं हमारा पहल Thank you.

Thank you, sir. Thank you very much, sir. Very happy Diwali to you and your team. Thank you.

Thank you. Ladies and gentlemen, to ask a question, please press star and fun. Next question is from Saket Kapoor from Kapoor & Company. Please go ahead.

Yes, welcome to the call. Please welcome to the call. My voice is pointing to you, sir.

Yes, absolutely.

Yes, sir, we have done volumes in the first half in 4.96, so what do we keep the volume in the edge 2?

Yes, look, as I also said in the statement, in Q1 versus Q2, we have made 2.67,000,000 tons and Q3 and Q4, we will make up 6,000,000 tons. and welcome to the call. Good morning, everyone, and welcome to the call.

Thank you, thank you. Thank you. Good morning, everyone,

and welcome to the call. In the phone call, I can't take any decision about this, but I will talk to you about the board and if something is good, I will listen to you before the board meeting. This is also my commitment.

Yes, sir. Sir, if we came to the capital work in progress, we have seen the closing balance for CWIC closer to 59 crore. So, in the first half, sir, I think, the capx, I think, was our 99 crore. So, in the second half, what do you think capx will be? And what are the planning of capx's coming in the future?

Thank you, everyone, and welcome to the call. Good morning, everyone, and welcome to the call. So, total, I mean, this year, we have 150-155 crore, and the next year, we have 75 crore investment in Hindupur, and our green field is almost full of 200-300 crore, and the next year, we will be able to extend something, and the next year, we will be able to extend something, and the next year, we will be able to extend something. So, this is our capacity. Thank you.

You said that the greenfield capacity will be $80,000 to $300,000.

Yes.

And the volume of the cost is about 5 tons. So, the land is also inclusive.

Yes, the land is included in this area. And on the lower side, I think that the investment will be $300,000 to $3,300,000.

So, it's a project file that is a specification of the data.

Thank you, everyone, and welcome to the call.

Sir, if we have a question on the lightning, we see that there is a lot of pressure on commodity. We have maintained our margins. So, since we have an inventory, this margin is maintained, and can we see a decline in this segment? How are you seeing the vertical edge of 7.8?

Thank you. Thank you. Good morning, everyone, and welcome to the call. And the price increase trend, we see some of the pre-booking, the import material is also maintained, and the third thing is the biggest thing is that our reach is the same. Good morning, everyone, and welcome to the call. Thank you.

Good morning, everyone, and welcome to the call. India Regulation.

So, we are not going to have a social responsibility.

How much impact on our X-1 in ETR?

It has 3.5 crores.

Yes, sir. One question is on my advance tax. On H1, because you have a net tax, you have a refund in tax flow. So, H1, we have a net tax. We have exactly what tax pay for June and September. Here, our figure is 56.53.

Good morning, everyone, and welcome to the call.

So, 60 crore, we've got the first half of June and September total.

Yes, yes.

Sir, one question is, my professional lighting has been given. You mentioned that you have mentioned that it's 200 crore for the order booking. Exactly, sir, it's our maintenance work that is only the supply of the electrical goods that constitute the professional lighting part. And in this segment, the margins and our thought process is what we can grow.

Thank you. The order book is 200 crore, 25% of our maintenance is the ratio. So, our full stress is inside. First of all, the overall lighting business was 25% of the trade. Now, the volume of the trade is 65-70%.

Yes, sir. And wires and cables, the segment is quite crowded, and there are quite small brands and big players. And now, sir, it's about 50-80 crore business, but what, sir, it's our rujan, and this segment is exactly our backward integration, so this is very price sensitive, and it's full of consumer focus. So, what is our thought process in the future? In this case, we have a whole work in our own, that we go to the job work and all. In fact, in the Lightning business, how much is our outsource percentage? You talked about backward integration. So, we also work on white-levels, from the third parties, that we have a whole in-house work.

One thing, the wire business is about 95 to 100 crore. Thank you. This business is also our strength because already our channel partners deal with this product, but there is no replacement or any kind. There is a little pressure on the margin. If you manage a little efficiently, then this business is also okay. Thank you. Overall, lighting consumer, 80% of people in-house are manufacturing. 18 to 20% depends on the price of 80, or 20. They keep outsourcing.

Yes, sir. Thank you very much for all questions. We will be ready for listening to good stories.

Our share of 600 rupees is your growth.

Thank you. Ladies and gentlemen, before we take the next question, a reminder to all the participants, if we wish to ask a question, please press star and one. We will take the next question from Reshan Jain from Vividi Asat Managers. Please go ahead.

Yeah, hi, Seth. Sir, I have a second question. The first question is, how do you see the demand in the second half of the ATI pipes in the second half? Because there were a lot of tenders that were open to the ATI pipes, where the demand was reduced. Do you have any view of that?

The ATI in the last two years was a little pressure. The city gas distribution was already tendered. The cross-country line lies there. Thank you.

And this is the margin that was the first margin in the API price. We are maintaining the new tenders as much as we maintain.

Thank you. Thank you.

Okay. Sir, my second question is, this year's new capacity, it has more than DFT capacity, and it is more than the structural tubes, so how do you see the demand conditions there? I think the DFT capacity has more than

four plants. Thank you, everyone, and welcome to the call. But one thing is that the price has a lot of pressure. You can get a ton of EBITDA of 2500-2600 ton, but a certain volume becomes a lot of pressure. So the price is sensitive, but overall growth is more than normal. Good morning, everyone, and welcome to the call.

Sir, the third question is that there was another plan for putting up a larger capacity, because whatever the plant is in the south, west and north, there is nothing in the east, so is there something a plan for us? Thank you,

everyone, and welcome to the call. We have identified the land in the Maherashtra, but I think that in 2-3 months, we will have a call and precisely where we will put it. However, we have a condition that we have to be able to import the port. What I've said earlier, is the investment of Dysos to 300 crore of our house.

Okay, so this is 1,500-3,000 crore, and you will get the capacity of 3.5-4,000,000 crore?

Yes, it will get the capacity of 3.5-3,000,000 crore.

Okay, sir. Sir, and this buyback, all investors are saying, please consider this. Thank you.

Thank you. Ladies and gentlemen, a reminder to all, to ask a question, please press star and 1. Next question is from Svashank, an individual investor. Please go ahead.

Thank you for taking my question. My question was, primarily, that other expenses we've seen go up 70%. Can you just break that down in terms of how that has gone up so much?

Do you want to repeat it? Sorry.

My question is that 70% increase in other expenses. Can you explain what is driving that increase? Is it just freight or is it something else also?

No, it's freight. It's because of the freight. And because of our administrative expenditures, it's a little bit less than the freight. It's a little bit of publicity.

Got it, got it. And so, one more question I had was with regards to working capital. We've seen an...

GD.

We have lost the participants' connection, so we will move ahead. A reminder to all, please press star and 1 to ask questions. Next question is from Keshav Garg from Counter-Cyclical PMS. Please go ahead.

Sir, in our country, steel prices are higher than China, Vietnam and Southeast Asian countries due to duties and so on. Sir, are we facing some disadvantages of high steel prices?

No, it is in this case, but we have an option available to import. We have already 60,000 tons of material booked, and comparatively, we have booked at a price. It's a short-term impact, but the long-term impact on the balance sheet is not given. Overall, if you look at the steel price, it's about Rs. 32,000 in the range, and I think it's about Rs. 64,000 in the range.

Understood, sir. So, sir, basically, we can export the advance authorization scheme from duty-free steel import and export?

Yes, sir.

Okay, sir. Sir, as we have seen in the Electronics Division, we have seen a lot of SKU, the latest being wire. Sir, in that regard, in the Steel Division, do you have a plan to go to a seamless tube or a higher value added product that you are evaluating?

No, seamless, we haven't thought about it all together, because it's a different line, it's a lot of heavy investment, it's a long time, but our existing business, which is section, galvanizing, round pipe, spiral, API, API, and the other side of it, and the other side of it, the other side of it, the other side of it, Thank you. So, almost 64-65% of export growth has grown. In America, we have 800-800 growth in our hands. And we have already been booked for months. So, this is our strength, our focus is not our focus.

Understood, sir. And sir, like the industry leader, like APL Apollo, so sir, is there a high value added product which is not a high value added product which is not in our portfolio?

Hello, everyone, and welcome to the call.

Thank you.

Look, we don't have any product in the loss of business. Number one. Number two, our core strength is our distribution. We don't have a lot of material with this brand. We don't need to add additional oil. You have seen before, we were in trade, then in the aluminum, then in the fan, then in the appliances, then in the wire, then in the other switches. So gradually, these materials are where our 75-80% distribution segment is already in this category. Thank you. So, if we give complete range, obviously, we have a advantage of the T.O.D. and the rest of the scheme. And in this product category, we have a regular basis.

Thank you. Good morning, everyone, and welcome to the call. Is it even required?

Look, this is the thing that the symphony is dealing with the SQV, we don't do that. Hello? Yes sir. So, we don't deal with industrial products, but we do not deal with the symphony. So, we have the trade focus. So, the material needs to be made in the trade. And the material needs to be made in the SQU. And the material needs to be made in the cooler. The material is also outsourced. The branding of the lighting, the ROC is now 14.2%. So, gradually, this is increasing.

Thank you very much.

Thank you. Ladies and gentlemen, please press star and one to ask a question. Next question is from the line of Anna Sahib, an individual investor. Please go ahead.

Happy to value to all sir. Sir, I just know that Indian pipe business growth outlook how will it be for next two quarters? And in the last call, you said that government spending on your business depends. So how will it be for next two quarters?

Look, overall, India's growth of 10-12% in this segment. And the case of Surah Roshni, which I have told, that we will have 6,000,000,000 in the next quarter, and 5,000,000,000 in the first quarter. I think that we will have 11,000,000,000 in the next quarter.

And this is the government spending on your business, right? So, how does the government spending keep in mind?

The government spending, see, every business has its effect. The government, as much as the money you earn, the demand is increasing. You don't have the product directly, you don't have the product, you don't have the product, you don't have the product, you don't have the product, you don't have the product. But in our case, there is a lot of government spending, the API, because they give PSU, direct government to supply. Good morning, everyone, and welcome to the call. So, gradually, in that segment, there is also an investment in that segment. There is already a tender, the city gas line, and the gross country line is also in the pipeline. So, I think it will be good for the month and the next year, I think it will be good for the next year.

Okay, sir. Thank you, sir. And happily. Thank you, sir.

Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the concern over to Mr. PB Singles for closing comments. Over to you, sir.

Thank you, everyone, for joining us today on this opening call. We appreciate your interest in Surah Roshni Limited. I sincerely once again thank our MD, sir, and the CEOs for sparing your time and addressing queries based by the participants who attended the call. As we celebrate Diwali on behalf of the entire Surya Roshni family, I extend our warmest wishes to you and your families for a joyous and prosperous festive season. For any further query, if any, contact as GA, our Investor Relations Advisor. Thanks. Good evening. Thank you and happy Diwali tour.

Thank you very much, sir. On behalf of Surya Roshna Ltd, that concludes this conference. Thank you all for joining us today, and you may now disconnect your lines.