Iron & Steel Products company Surya Roshni announced Q3FY25 results Revenue: Rs 1,868 crore compared to Rs 1,938 crore during Q3FY24, change -4%. EBITDA: Rs 156 crore compared to Rs 158 crore during Q3FY24, change -2%. PBT: Rs 121 crore compared to Rs 121 crore during Q3FY24. PAT: Rs 90 crore compared to Rs 90 crore during Q3FY24. Raju Bista, Managing Director, said: “We are pleased to have delivered a resilient performance in Q3FY25, despite macroeconomic headwinds. The consolidated revenue stood at Rs 1,868 crore, reflecting a marginal decline of 4% YoY, primarily impacted by the steel pipes segment due to softened steel prices. However, EBITDA margin remained stable at 8.33%, underscoring our cost discipline and operational efficiency. Overall, despite challenges in the steel segment, we continue to demonstrate steadfastness through product diversification, cost optimization, and strategic growth initiatives, positioning itself well for an improved performance in the coming quarters.” Vinay Surya, Managing Director said: “In Lighting and Consumer Durables, we have delivered another quarter of resilient growth, reinforcing our leadership position in the market. We continue to drive business expansion through innovation, cost optimization, and a strong distribution network, allowing us to navigate sectoral headwinds effectively. “In the Steel Pipes and Strips, we experienced a volume growth of 8% year-on-year in Q3FY25. While revenue in this segment was down 8% year-on-year at Rs 1,417 crore, compared to Rs 1,536 crore last year, we are pleased with the strong sequential recovery, as revenue increased by approximately 25% from Rs 1,135 crore in the previous quarter. Thus, despite headwinds, the company has demonstrated resilience by focusing on volume growth, optimizing product mix, and enhancing profitability in key segments. Current capacity utilization in Q3FY25 stood at 78-80%, and for 9MFY25 it was ~72% due to the significant volume decline in Q2FY25. The current steel prices are at a five-year low, and we believe further declines are unlikely. Bharat Bhushan Singal, CFO said: For the quarter, the revenue was Rs 1,868 crore as compared to Rs 1,938 crore. EBITDA and PAT stood at Rs 156 crore and Rs 90 crore as compared to Rs 158 crore and Rs 90 crore, respectively. For 9MFY25, the revenue was Rs 5,290 crore as compared to Rs 5,729 crore. EBITDA and PAT stood at Rs 397 crore and Rs 217 crore as compared to Rs 414 crore and Rs 225 crore, respectively. Result PDF
Conference Call with Surya Roshni Management and Analysts on Q2FY25 Performance and Outlook. Listen to the full earnings transcript.
Iron & Steel Products company Surya Roshni announced Q2FY25 results Revenue: Rs 1,529 crore compared to Rs 1,916 crore during Q2FY24, change -20% YoY. EBITDA: Rs 83 crore compared to Rs 139 crore during Q2FY24, change -40%. PBT: Rs 46 crore compared to Rs 104 crore during Q2FY24, change -56%. PAT: Rs 34 crore compared to Rs 76 crore during Q2FY24, change -55%. Raju Bista, Managing Director, said: “In Q2FY25, posed several challenges for the company’s businesses due to seasonal factors, price volatility, and geopolitical tensions affecting export markets. Nonetheless, the company has managed these headwinds through stringent operational efficiencies and proactive capacity expansion, which are expected to support gradual improvement in both domestic and export markets. Due to external economic factors, the company faced a challenging Q2FY25, with consolidated revenue stood at Rs 1,529 crores. Strategic initiatives in operational efficiency, high-margin product focus, and regional market expansion are expected to support improved performance in the second half of the fiscal year.” “In Lighting and Consumer Durables, we faced a challenging environment during Q2FY25, with significant headwinds in form of price erosion in LED lighting products and adverse weather conditions, including floods and rains across various regions. These external factors limited consumer and professional lighting demand. But despite these challenges, the segment demonstrated resilience. The topline of this vertical increased by 5% YoY in Q2FY25 on back of healthy volume growth in several subsegments, even though steep price erosion in LED products limited overall growth. In Lighting segment, price erosion in LED was notably severe, which affected the segment's margins. However, the company successfully maintained margin stability through cost innovation and an increased focus on higher-margin products. Volume growth was recorded in high-wattage battens, downlighters, and panel sales within the LED segment, which helped to cushion the impact of price declines. Professional lighting continued its positive momentum with a high single digit growth in Q2FY25 and double-digit growth rate in H1FY25. The segment faced some delays in project decisions due to the recent general elections, but a strong order book, provides optimism for sustained performance. The professional lighting segment, backed by a healthy order book and scheduled project executions, is expected to contribute significantly to Q3FY25. In the Appliance segment, particularly water heaters, showed excellent volume growth. The company also launched products in mixer grinders and irons. The positive response to our newly launched Mono Block residential pumps, initially targeted for the northern and central markets, has prompted us to plan for further geographic expansion. Seasonal preparations for the festive period, beginning with Onam and extending through Diwali, were integral to the business strategy in Q2FY25. Extensive product launches and promotional activities were timed for this season, which included social media campaigns, dealer meets, and point-of-sale enhancements. We are optimistic about the upcoming quarters, expecting improved performance in professional lighting and consumer appliances on account of demand due to the festive season. We continue to aim for revenue growth close to 12% for FY25, with a cautiously optimistic outlook for EBITDA margin. Our expansion efforts in consumer durables and increasing geographical presence in semi-urban markets are anticipated to further strengthen our market position and instill resilience against ongoing price pressures.” “In the Steel Pipes and Strips, the company recorded a revenue decline of 26% YoY for Q2FY25 at Rs 1,135 crore. Market hesitancy due to declining steel prices led distributors and dealers to scale back on inventory holdings, impacting topline performance. Additionally, the fall in sales can also be attributed to seasonality, as excessive rains led to reduced demand across various product lines. A significant headwind this quarter was the sharp reduction in steel HR prices, by Rs 7,500 per ton during the quarter ended Q2FY25. This price drop not only dampened demand, as stockists and distributors delayed purchases, but also exerted considerable pressure on profitability, eroding EBITDA by an estimated Rs 3,000 per ton on account of inventory valuation adjustments. However, through rigorous operational efficiencies, the company managed to stabilize its EBITDA per ton at Rs 2,901. Value-added products continued to constitute about 45% of total revenue in H1FY25. While demand in the API pipes segment remained subdued due to limited government tendering activity, the Spiral Pipes segment exhibited robust performance, supported by strong order inflows, particularly in the water pipe segment. The order book for spiral pipes remains healthy. The spiral plant at Malanpur (Gwalior), which is expected to commence operations in the coming month, has already secured a six-month order backlog. Galvanized Pipes segment faced a challenging quarter, recording a 28% YoY decline. Demand was particularly impacted by the monsoon. However, we anticipate a recovery in the upcoming quarters as seasonal conditions normalize. The ERW segment saw a YoY contraction in volume, influenced by lower inventory levels held by distributors amidst falling steel prices. The CR Strips segment demonstrated modest growth, with volumes increasing by 5% in Q2FY25. Export volumes declined, primarily due to geopolitical tensions in key markets, notably the Middle East. Despite these challenges, we remain confident in the potential for export recovery over the next six months, as demand stabilizes both domestically and internationally." Vinay Surya – Managing Director said: “In Lighting and Consumer Durables, we presented a more resilient performance with a 5% YoY growth in revenue in Q2FY25. This was achieved despite facing headwinds on account of steep price erosion in LED products as well as adverse weather conditions impacting demand across various regions. The company managed to protect margins through a focus on high-margin and premium products, along with continuous cost-innovation efforts, which countered the impact of price erosion. Consumer Lighting saw steady demand despite price erosion in LED products. However, our new launches across high-wattage battens, downlighters, and panels, contributed to both volume and margin growth. The Professional Lighting sub-segment grew in healthy double digits in H1FY25, driven by a strong order book and major projects are set to commence execution in Q3. In the Consumer Appliances category, the water heaters particularly saw strong seasonal demand. We also had preparations in place for the festive season launches extending from Onam to Diwali, which should reflect in our Q3FY25 results. Ahead of the Diwali season, the company invested in a significant marketing campaign, especially on social media, emphasizing decorative lighting. Furthermore, we held dealers and electricians meets to showcase new products and provided merchandising materials to enhance visibility at the point of sale. These initiatives were aimed at stimulating demand and ensuring that dealers were well-prepared to serve customers during the high-demand festive period. Additionally, regional trends indicate stronger growth in semi-urban and rural markets over urban areas, with premium products gaining traction outside metro markets. Our focus in expanding premium offerings and strengthening our presence in semi-urban and rural markets are expected to provide tailwinds. We remain optimistic for Q3 and Q4, driven by a robust order pipeline in the professional lighting segment and sustained demand in consumer durables.” “In the Steel Pipes and Strips, the price corrections in steel over the three months of Q2FY25 significantly led to the overall revenue decline, as dealers delayed their purchases. To mitigate the impact of declining prices, we implemented rigorous cost management strategies and operational efficiencies. The recent upward trend in steel prices provides an optimistic outlook for margin improvement. Steel prices rose by 3% over October and November, and this pricing trajectory is expected to support enhanced profitability across product segments. Our value-added product portfolio continues to contribute significantly, maintaining a 45% share of total sales in H1FY25. With the commissioning of the new Spiral plant, we anticipate an increase upto 50% in coming years in this share, underscoring our focus on value addition. The ERW mill in Bahadurgarh, operational since July, has already achieved a production output of 7,000 tons. The Bahadurgarh cold rolling expansion and Spiral plant in Gwalior are on track to commence operations, with turnover contributions beginning in Q4FY25. The Hindupur facility expansion is underway with an initial capex allocation of Rs 25–30 crore, while the Anjar facility expansion will proceed following a technical review with suppliers. Full operations at Hindupur facility are projected to begin in 12 months. These strategic investments, aligned with our focus on efficiency and capacity, are anticipated to strengthen the operational backbone of the Steel Pipe segment. Q2FY25 presented a unique set of challenges across various sub-segments of the Steel Pipe business. While market dynamics, price volatility, and geopolitical factors impacted performance, our proactive operational adjustments, coupled with strategic expansions and efficiency initiatives, reinforce a positive outlook for the coming quarters. With a focus on executing our capex projects and leveraging favorable trade conditions, we remain well-positioned to drive growth and value creation in the Steel Pipe business.” Bharat Bhushan Singal, CFO said: “For the quarter, the revenue was Rs 1,529 crore as compared to Rs 1,916 crore. EBITDA and PAT stood at Rs 83 crore and Rs 34 crore as compared to Rs 139 crore and Rs 76 crore, respectively. For H1FY25, the revenue was Rs 3,422 crore as compared to Rs 3,791 crore. EBITDA and PAT stood at Rs 242 crore and Rs 127 crore as compared to Rs 255 crore and Rs 135 crore, respectively. In Lighting & Consumer Durables, for the quarter, the revenue stood at Rs 395 crore as against Rs 377 crore, a growth of 5% YoY. EBITDA and PBT stood at Rs 36 crore and Rs 26 crore, respectively. For H1FY25, the revenue stood at Rs 781 crore as against Rs 751 crore, a growth of 4% YoY. EBITDA and PBT stood at Rs 70 crore and Rs 52 crore, as compared to Rs 68 crore and Rs 54 crore, respectively. In the Steel Pipes and Strips, during Q2FY25, the revenue was Rs 1,135 crore as compared to Rs 1,539 crore. Similarly, EBITDA/MT stood at Rs 2,901 compared to Rs 5,104. EBITDA and PBT stood at Rs 48 crore and Rs 20 crore as against Rs 104 crore and Rs 76 crore, respectively. For H1FY25, the revenue was Rs 2,643 crore as compared to Rs 3,042 crore. Similarly, EBITDA/MT stood at Rs 4,653 compared to Rs 4,758. EBITDA and PBT stood at Rs 172 crore and Rs 117 crore as against Rs 187 crore and Rs 131 crore, respectively. Improved capacity utilization, working capital optimization and cost rationalization enabled us to become a zero-debt company, and having cash surplus of Rs 136 crore in H1FY25.” Result PDF
Iron & Steel products company Surya Roshni announced Q1FY25 results: EBITDA increased by 36% YoY to Rs 159 crore in Q1FY25 EBITDA per ton for the Steel Pipe and Strips segment rose by 38% YoY to Rs 6,065 Fan business recorded a 43% volume growth in Q1FY25 due to strong market penetration Professional Lighting business saw a 18% growth driven by infrastructure projects Appliances segment witnessed a 15% volume growth in Q1FY25 Commenting on the results, Company’s Managing Director, Raju Bista, said “We are pleased to report a very healthy operating performance for Q1FY25, despite the slowdown on account of general elections. Our continuous focus on value-added products in the steel pipes segment and innovative offerings in the lighting & consumer durables division have been the key drivers of this growth. EBITDA for Q1FY25 stood at Rs 159 crore, up by 36%, as compared to Rs 116 crore last year. The EBITDA margins improved by 217 basis points to 8.37% on account of significant improvement in operating profitability of steel pipes business and stability in the margins of lighting and consumer durable business. We registered 56% growth in PAT at Rs 92 crore in Q1FY25 versus Rs 59 crore in the same period last year.” “In Lighting and Consumer Durables, we exhibited a steady growth of 3% in Q1FY25. This performance reflects positive outcomes across various sub-segments. The EBITDA margin for Q1FY25 was recorded at 9%. In professional lighting, we achieved a substantial growth of 18%, driven by strong performance in street lighting, industry lighting, and façade lighting. Although the consumer lighting business faced challenges due to ongoing price erosion, there was double-digit volume growth in most sub-categories. Despite short-term price deflation, the volume growth and introduction of value-added products are expected to ensure revenue and profitability growth in the lighting business. The appliance segment witnessed a volume growth of 15%, with significant contributions from the induction cooktops and mixer grinders, particularly in semi-urban and rural markets. Fans business registered an impressive volume growth of 43%, supported by the hot summer season and the introduction of new products in Q4FY24. Enhanced market penetration and improved margins in the fans category further contributed to this growth. We anticipate a revenue growth of 12% to 15% for FY25, driven by aspiring consumers, government focus on infrastructure, and industrial capex. We also remain confident in achieving an EBITDA of Rs 180 crore for FY25, focusing on high-margin products, cost management, and leveraging backward integration with Production Linked Incentive (PLI) benefits. We are focusing on expanding our presence in semi-urban and rural areas, which have shown significant growth potential. While maintaining a strong presence in Tier 2 and Tier 3 cities, we also continue to strengthen our foothold in metro markets. We have tailored strategies for different tiers to promote high-margin products in strong markets and enhance distribution in areas with lower market share We anticipate that the lighting and consumer durables industry will maintain its growth trajectory. This growth will be fueled by the rising aspirations of consumers and increased government investment in infrastructure. Our robust presence in both B2C and B2B segments, coupled with our unwavering commitment to delivering top-notch, cutting-edge products, positions us favorably to seize these opportunities. We anticipate that our continued focus on technology and product development, as well as our strategic market expansions, will lead to consistent growth and profitability in the coming fiscal years.” Adding further, Vinay Surya – Managing Director said, “In Lighting and Consumer Durables, we recorded a growth of 3% in Q1FY25. Almost all business segments registered double-digit volume growth. The gross margins expanded across most segments due to a better margin mix and effective cost management strategies. High-capacity utilization at our manufacturing plants, has positively impacted EBITDA through better operational efficiency. There is a growing preference for energy-efficient, high-quality, and aesthetically pleasing products among consumers. To cater to this demand, we introduced higher wattage and more efficient Platina LED lamps, a range of downlighters(Shine Nxt), and new generation flood lights for consumer lighting applications. We also launched energy-efficient and decorative ceiling and table pedestal wall fans, including starlabelled models. Increase in the number of distributors, particularly in the fan category, over the past year has significantly contributed to the impressive growth in this category in Q1FY25. We have also for the first time, started manufacturing of ventilation fans at our Kashipur facility. We also expanded into the induction cooktops and mixer grinders segment, with a special focus on high-performance commercial mixer grinders. In professional lighting, we have started focusing on indoor lighting and solar lighting to capitalize on growth opportunities. We also launched higher performance streetlights, offering a smart value proposition with lower cost of ownership. We have entered in new product segment of Mono Block Residential Pumps via launch of ‘Surya Water Pumps’ in the month of July 2024. The market size for such pumps is Rs 1,000 crore and is growing fast driven by 'Har Ghar Nal Se Jal' scheme of Government of India. Our comprehensive go-to-market (GTM) strategy includes leveraging existing distribution channels and exploring new avenues to reach consumers. We employ multiple GTM approaches to cater to different product categories, ensuring effective reach and penetration across various market segments. We recognize the critical role that the in-shop experience plays in influencing consumer perceptions and driving sales. Over the quarters, we have intensified our efforts to enhance the in-shop experience across our retail outlets. We see it as a crucial component of our marketing strategy, contributing to the overall performance and growth of the company. Strategic display of our products at over 2,000 retail points ensures high visibility and availability of our offerings. We also have regular engagement exercises with retailers across different parts of the country to strengthen relationships and ensure product availability. These initiatives have already shown positive results, with marked improvements in customer satisfaction and increased sales. We have also implemented significant training programs to ensure that all team members and staff can now provide deep product insights, demonstrations, and personalized suggestions, making every client engagement more informative and engaging. Our regular interactions with electricians and other influencers also enable us to drive brand loyalty and encourage product recommendations. We are confident in our ability to navigate the obstacles and seize the opportunities that lie ahead. Our strategic efforts are linked with client needs, ensuring that we are well-positioned to continue growing and succeed in the lighting and consumer durables industry.” Commenting on the financial performance, Bharat Bhushan Singal – CFO said, “For the quarter, the revenue was Rs 1,893 crore as compared to Rs 1,875 crore. EBITDA and PAT stood at Rs 159 crore and Rs 92 crore as compared to Rs 116 crore and Rs 59 crore, registering a growth of 36% and 56% YoY respectively In Lighting & Consumer Durables, for the quarter, the revenue stood at Rs 385 crore as against Rs 374 crore. EBITDA and PBT stood at Rs 35 crore and Rs 26 crore, registering a growth of 5% and 1% YoY respectively. In the Steel Pipes and Strips, during Q1FY25, the revenue was Rs 1,509 crore as compared to Rs 1,503 crore. Similarly, EBITDA/MT stood at Rs 6,065 compared to Rs 4,388, registering a growth of 38% YoY. EBITDA and PBT stood at Rs 124 crore and Rs 97 crore as against Rs 83 crore and Rs 55 crore, registering a growth of 49% and 76% YoY respectively. Improved capacity utilization, working capital optimization and cost rationalization enabled us to become a zero-debt company, and having cash surplus of Rs 156 crore in Q1FY25. As on 30th June 2024, ROCE stood at 22.93% and ROE stood at 16.71%. As on 30th June 2024, the net working capital days stood at 67 days, inventory days stood at 51 days, debtor days stood at 38 days and creditor days stood at 23 days.” Result PDF