Surya Roshni Share Surges 106% In 6 Months on Healthy Outlook, Nears Record High

Surya Roshni has soared more than 70% this year, propelled by the fourth quarter to hit new highs.

Backed by a healthy business outlook, shares of Surya Roshni hit a new 52-week high of Rs 842.50 in intraday trade on Thursday, up 3% on the BSE. Shares of the steel products company continued to move north after reporting a solid set of numbers for the quarter ending March 2023 (Q4FY23).

Over the past six months, Surya Roshni’s market price has more than doubled, rising 106%, while the S&P BSE Sensex rose 0.57%. It was trading near its all-time high of Rs 868.40, reached on October 4, 2021.

Surya Roshni is the largest exporter of ERW pipes, the largest producer of ERW GI pipes and one of the largest lighting companies in India. In Q4FY23, the company achieved its highest-ever EBITDA/MT of Rs 9,868 in steel pipes and strips.

The company reported an 88% year-on-year rise in consolidated profit after tax (PAT) to Rs 1.56 crore on lower finance costs and an improved product mix of value-added products. However, revenue fell 7% year-on-year to Rs 2,151 crore.

Efficient capacity utilisation in manufacturing premium value-added products has improved EBITDA per tonne. The company’s debt has been significantly reduced as long-term debt has been fully repaid. With a debt of Rs 404 crore, the company aims to become debt-free within the next two years.

Management stated that the company continues to deliver sustainable growth on a quarterly and annual basis, with current Ebitda levels established as a benchmark for future growth.

The company said that the inflow of inquiry orders is good and will continue to focus on participating in multiple smart lighting projects in the professional lighting field. Professional Lighting delivered several prestigious projects during the year. The company has a strong order book and will continue to ramp up aggressively in FY24.

In steel pipe and strip, the company reported a strong 110% increase in profit before tax (PBT) in the fourth quarter and an 80% growth in FY23. A higher share of value-added products, especially API-coated pipes and export products, supported this growth. The company’s recently commissioned large-diameter DFT facility is expected to accelerate growth and profitability, the company said.

Strong export orders, API-coated pipe and spiral pipe, provide strong revenue visibility for FY24. It added that the company’s Largedia section pipeline facility with DFT in Gwalior will further accelerate revenue and realisation.

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