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Indian markets have many listed companies from the Steel tubes and pipes industry and the Lighting and Consumer Durable industry. However, there must be very few companies involved in such diverse industries at the same time and Surya Roshni is one of them.


Recently, we were looking at Surya Roshni as the stock is down almost 50% from its peak price of 850 in Oct’21.

While Surya is more famous for its lighting products; did you know that Steel tubes and Pipes segment accounted for 80% of its sales in FY 22 and 76% of its earnings before interest and taxes.

Overall, the numbers of the company look interesting and we therefore decided to dig deeper into the industry and have shared the details below from the Q2 FY 23 con-call transcript of the company:


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It's a food processing company, virtually debt free, compounded profits at 20% + consistently, maintained returned ratios like ROE and ROCE at 20% +, doubled its market share in exports in its segment in the last 6-7 years and yet available at less than 7 times Pre-tax earnings.

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Surya Roshni - Notes from Q2 FY 23 con-call transcript

Lighting and Consumer Durable division

  • Q2 and H1 FY 23 revenue grew by 12% and 29% year-on-year respectively
  • LED revenue grew by 29% and 48% year-on-year during Q2 FY 23 and H1 FY 23 respectively backed by value-added products like LED, downlighters, Battens and other luminaries
  • Professional lighting too witnessed robust 37% growth and 49% growth in terms of revenue for Q2 and H1 FY 23 along with a good inflow of order
  • Consumer durable too showed a significant pickup in demand towards the end of Q2 FY 23, may be due to the festival season and we expect some spillover effect in Q3 as well
  • The company has undertaken multiple price hikes in order to mitigate rising input cost. We are witnessing stabilization in input cost especially on the commodity front and we believe that most of the input cost has peaked out and we should witness a downtrend in the H2 FY 23
  • This downward trend along with already undertaken price hikes should help the company to improve the margins further especially in lighting and consumer durable
  • 8% EBITDA margin is there at present in the consumer durable and last year also it was around 8%. So, we will maintain EBITDA margin at 10% for the whole year
  • Capacity utilization - there are 3 things in lighting and consumer durable, so the first part is lighting division and in that 2 types of lighting are there; one is the conventional lighting which was of the old bulb, so its utilization is not much now, it is nearly 20% and rest we have almost converted it into LED
  • As far as LED which is a growth segment is concerned, our capacity utilization in that is 65%-70%, so we have much scope. In the next 3 years we don’t need more than Rs 25 crore investment in lighting

Steel pipe and Cold rolling division

  • HR coil is a raw material for us and we sell them by converting it and making them into pipes. When the HR prices increase, there is some gain in the stock and when the price reduces, then there is little loss in stock
  • Steel pipe and steel performance was affected in terms of revenue due to steep correction in global steel price. At one time it was Rs 75,000 a ton, now it has come down to Rs 55,000
  • Volume is almost at same level, but EBITDA has grown by 30% year-on-year to Rs 5,259 per ton in Q2 FY 23, mainly on account of healthy revenue mix and value-added products such as API coated pipes
  • EBITDA per metric ton stood at Rs 5,259 compared to Rs 4,060 year-to-year
  • In coming 2 quarters we will maintain around Rs 5,500. This whole year you will see EBITDA at Rs 5,000 per ton
  • Volume - Q1 volume - 170,000 tonnes, Q2 volume - 204,000 tonnes...in H2 we are expecting to do volumes between 4,50,000 tons to 5,00,000 tons
  • Capacity - 13 lakh tons capacity is already installed including DFT. To rated or actual, the maximum possible utilization is around 90%
  • Value added products - Number 1 is the API steel, another is the GI pipes and the third one is the large dia section pipes of DFT which we have recently installed and all coated pipes


  • In steel division, we are already going on almost 80%-85% capacity utilization. Before next board meeting we are going to announce some additional CAPEX and capacity
  • Over a period we realized that putting a unit in Hindupur, it was very good for South market, because earlier we used to send from Bahadurgarh or from other plant. On a similar line we are working on one in West, one in the East, and works are going on for GP line galvanized line

Balance Sheet

  • The company has reduced debt by Rs 72 crore in first half of financial year 23 and has become long-term debt free
  • The working capital cycle remained largely stable on a sequential basis at 58 days in second quarter financial year 23 compared to 57 days in quarter 1 financial year 23 for the company


  • Lighting division growth is expected to be around 17-18% and 10% for steel division




Disclaimer: This is not a recommendation to buy/sell Surya Roshni. These notes are as announced by the companies on exchanges and only for the purpose of information and education.


Best Regards,

Ekansh Mittal
Research Analyst
Web: https://www.katalystwealth.com/


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