Surya Roshni Q3 Results Review - Below Expectations; Maintain Hold: IDBI Capital

IDBI Capital Report

Surya Roshni Ltd.'s Q3 FY24 result was below our expectations. Steel pipes segment Ebitda/tonne decreased by 9% YoY, although it recovered 21% QoQ to Rs 6,156. Also, It continued to maintain robust order book of Rs 6 billion from oil and gas sector and export business.

Lighting and consumer durables segment sales were flat YoY to Rs 4,030 million; nevertheless, segment Ebitda increased 38% YoY to Rs 380 million. Lastly, its net debt fell by Rs 1.7 billion in 9M FY24; the company aims to become net debt free by the end of FY24.

The company aims to increase the intensity of capex in FY25 and is planning a greenfield expansion. We lower our FY24 Ebitda estimate by 14% given weaker than expected Q3 FY24 Ebitda but broadly maintain our FY25 forecasts.

We introduce FY26 estimates in this report. Our revised SOTP-based target price stands at Rs 738 (earlier Rs 530); maintain 'Hold' rating

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