Hey everyone!
I invested in Surya Roshni when I was fairly new to the game in India (August last year), with a cost basis in the high 600s.
To me, investing in this company was a no brainer even at those levels for the following reasons:
• A sales multiple less than 1, and what I felt was a larger than justified valuation differential when compared to APL Apollo Tubes
• Significant tailwind opportunities from government programs like Har Ghar Nal Se Jal, and the expansion of gas transmission/distribution pipelines in the country
• A continuing increase in steel consumption per capita in India, especially when you consider that China’s consumption is an order of magnitude higher (64.2 kg in India versus 691.3 kg in China in 2020)
• What I saw as an “obvious” demerger opportunity, where the non-steel business could be spun off. I didn’t see any synergies between the two divisions of the company, and felt that both divisions ought to have a focused management team and wholly independent value creation plans. I felt that the lighting and consumer durables division was being neglected, and that huge opportunities in the FMEG space were not being taken advantage of.
• Lowering levels of net debt
Sadly, the stock has been the worst performer in my portfolio. I could really use a second opinion, so as to determine if there’s some hidden value in this company that the market has not realized yet, or if there are valid reasons why the stock is trading at less than half of its all time high.
Regarding the demerger bit that I mentioned earlier, I took note of a very interesting comment from the management when they shared FY22 results: “The company’s Steel Pipes & Strips and Lighting & Consumer Durables businesses are now independent and self-sustaining in terms of profitability, debt servicing and investment for growth, resulting into constant growth in revenue and profitability, coupled with upgrades in credit ratings.”
Looking forward to your thoughts on Surya Roshni 
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