Surya Roshni Q1 Results Review - Weak Realisations Driving Underperformance: IDBI Capital

IDBI Capital Report

Surya Roshni Ltd.’s Q1 FY25 performance was below our expectations. Revenue increased marginally by 1.1% YoY to Rs 18.9 billion due to muted growth in lighting and consumer durable segment (up 3% YoY) and flattish growth in steel pipes segment.

Steel pipes segment’s Ebitda/tonne increased by 38% YoY to Rs 6,065, driven by a better product mix and Surya aims to sustain Ebitda/tonne at similar levels for FY25.

Surya commenced trial runs at the Bahadurgarh facility with a capacity of 50,000 mtpa and expects spiral pipes plant with a 60,000 mtpa capacity at Gwalior to start by Dec-24.

These facilities will increase production capacity by 12,000 to 15,000 tons per month from Q4 FY25. We adjust our FY25E/FY26E Ebitda estimate by +3%/-3%, respectively.

We arrive at the target price of Rs 604 (earlier Rs 627) based on SOTP method and maintain our Hold rating on the stock.

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