Surya Roshni -
Q3 FY 24 concall and results highlights -
Sales - 1938 vs 2021 cr ( down 4 pc )
EBITDA - 158 vs 164 cr ( down 3 pc, margins stable @ 8 pc )
PAT - 90 vs 90 cr
Witnessed slowdown in demand for value-added products in steel pipes segment, flattish growth in lighting and consumer durables segment. However, lighting and consumer durables reported smart margin recovery
Debt reduced by 168 cr in 9M FY 24. Debt / Equity now @ 0.12
Segment wise results -
Steel pipes division -
Sales - 1536 cr, down 6 pc
EBITDA - 121 cr, down 11 pc
EBITDA/Ton @ Rs 6156 vs 6733. It was Rs 5104 in Q2. Sequentially, there is good improvement here
PBT - 91 vs 104 cr
Weak domestic demand for value added products
Exports registered a healthy 23 pc growth in Q3
Have an order book of 600 cr from Oil and Gas sector
Lighting and consumer durables division -
Sales - 403 cr, up 2 pc
EBITDA - 38 vs 27 cr, margins @ 9.3 vs 6.9 pc
PBT - 30 vs 19 cr
PLI led backward integration carried out by the company helped them improve margins
Professional lighting continues to grow strongly led by Govt’s thrust on infrastructure
Lighting and CD division is now debt free
Steel Pipes manufacturing facilities -
Bahadurgarh, 53 acres
Anjar, 96 acres
Gwalior, 51 acres
Hindupur, 17 acres
Lighting manufacturing facilities -
Kashipur, 26 acres
Gwalior, 44 acres
Company is largest exporter of ERW pipes from India. Company is also No-2 lighting brand in India - mainly focussed on rural / semi urban areas
Steel pipes division’s product basket includes - ERW pipes / GI pipes, API pipes, CR strips, Black pipes, Hollow Section pipes
Company is likely to be completely debt free by end of Q4 FY 24
Expecting strong order flows from GCC region, Canada for its Pipes division
Exports are contributing to 18-20 pc of steel pipe division sales. EBITDA/Ton in exports is far higher @ Rs 9000-10000 / Ton
Expecting Q4’s EBITDA/Ton to be better than Q3
Company is actively thinking about a de-merger to unlock value - as the company is quite undervalued
Company is the leader in Large Diameter pipes, API pipes in India. Their products in these segments command a premium pricing of 6-8 pc over its peers - which is a very big deal in the pipes business. The company has earned this through 40 years to hard work
Guiding for an EBITDA of Rs 600 cr and revenues of 7800-8000 cr for FY 24. Expecting a topline growth of 15 pc in FY 25
Lighting business was very difficult over last 2-3 yrs. Things are now looking up. Should be better going forward
Company’s biggest strength in lighting business is their captive manufacturing base
Company’s margin profile should improve further as the percentage of exports increases as a percentage of total business
Disc: holding, biased, not SEBI registered
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