Surya Roshni –
Q3 FY 24 results and concall highlights –
Sales – 1938 vs 2021 cr
EBITDA – 158 vs 164 cr
PAT – 90 vs 90 cr
Dip in sales due – slowdown in demand of value added products in Steel pipes business and flattish growth in lighting and consumer durables segments
The margins in lighting and consumer durables business saw significant improvement. Professional lighting segment witnessed high teen growth
Gross debt reduced by 168 cr in 9M FY24. Debt/Equity now stands at 0.12. Company aims to be debt free by Q1 FY 25 – one year ahead of its target
Lighting and Consumer durables segment is now debt free
Segment wise Sales / EBITDA / PBT –
Steel Pipes and Strips- 1536 cr / 121 / 92 cr
Lighting and durables- 402 cr / 37 cr / 30 cr
Despite a domestic slowdown in Steel Pipes business, exports grew by a healthy 23 pc
EBITDA / ton also improved to Rs 6156 vs Rs 5104 ( QoQ )
Steel pipes and strips division –
Company’s 04 manufacturing plants are located in – Haryana, MP, Gujarat and AP
Products include – Structural, GI, ERW, Spiral, Black pipes and CR strips. Company is the largest exporter of ERW pipes from India
Lighting and FMEG division –
No 2 consumer lighting brand in India
Emerging brand in Fans, Home appliances
Lighting division saw an EBITDA margin expansion of 250 Bps in Q3
The high value add segment in the steel pipes business include – ERW pipes and Spiral pipes. In Q3, ERW pipes witnessed a modest volume growth but the Spiral pipes division saw a sharp decline of 38 pc
Exports form about 20 pc of company’s steel pipes business. EBITDA / Ton is better in export markets. It is generally in the range of Rs 9000 – 10000 / Ton. In Q3, exports grew by 25 pc
Company is guiding for EBITDA / Ton for Q4 to be better than Q3 with a volume growth of 10 pc
Volume growth guidance for FY 25 @ 15 pc for both Steel and Lighting division
Board will give due consideration to the possibility of a demerger of Lighting business. The board admitted that the company is clearly undervalued considering their superior EBITDA / Ton vs industry peers and an almost debt free status. Demerger can lead to significant value unlocking for shareholders
Company is a big exporter of Pipes to ME, Canada, Europe and Australia/NZ. Infra / construction boom in ME is a nice tail wind for the company
Company has lined up a brownfield capex spend of 150 cr for the next FY. Also likely to announce another Greenfield capex of around 300 cr in the next board meeting. It is likely to be in the Western India. This shall greatly help the country save logistics costs while selling in Maharashtra, AP, Telangana etc
Company does significantly better EBITDA/Ton vs APL Apollo in the ERW segment
Company is guiding for an EBITDA of Rs 600 cr with a topline of 7800 to 8000 cr for FY24 with a 15 pc growth potential for FY25
Lighting industry has had tough 3-4 yrs. Things should only get better from here. This yr, company hopes to clock an EBITDA of around 9 pc for full FY. Should be able to clock double digit EBITDA margins for next FY
Disc: bought again after Q3 results, a small position, biased, not SEBI registered
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