Release Date: May 15, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Surya Roshni Ltd (BOM:500336, Financial) achieved zero-debt status by reducing debt by INR400 crores in FY24.
- The company declared a final dividend of INR2.5 per share, in addition to an interim dividend of INR2.5 per share.
- The lighting and consumer durable segment recorded a 2% annual revenue growth, reaching INR1,572 crores in FY24.
- The steel pipe segment achieved its highest ever quarterly volume of 2.36 lakh tons in Q4 FY24.
- Surya Roshni Ltd (BOM:500336) has a strong order book of about INR800 crores as of March 31, 2024.
Negative Points
- EBITDA per ton for the steel pipe segment decreased to INR5,877 in Q4 FY24 from INR9,868 in Q4 FY23.
- Overall revenue for FY24 was INR7,809 crores, a slight decline from INR7,997 crores in FY23.
- The steel pipe and strip segment's revenue decreased to INR1,665 crores in Q4 FY24 from INR1,721 crores in Q4 FY23.
- The company faced challenges in the steel pipe business due to price falls, impacting operating margins.
- Despite the growth in lighting and consumer durables, the segment faced substantial price erosion in the consumer lighting business.
Q & A Highlights
Q: Congrats on achieving zero debt and increasing the payout. Can you help us understand the decline in EBITDA per ton in the steel pipe segment, particularly the contribution of API sales in Q4 compared to Q3?
A: The decline in EBITDA per ton is largely due to a lower volume of API sales. The overall contribution of API sales in Q4 was less compared to Q3, impacting the EBITDA per ton.
Q: How does Surya Roshni plan to improve efficiency compared to larger competitors, especially in terms of employee and other expenses?
A: We are focusing on enhancing operational efficiencies through strategic initiatives and cost optimization measures. This includes better resource management and leveraging technology to streamline processes.
Q: What is the outlook for the spiral pipe segment, considering the impact of the general elections?
A: Despite the temporary slowdown due to the general elections, we expect the spiral pipe segment to recover and grow. We are optimistic about the demand driven by infrastructure projects and government initiatives.
Q: What are your expectations for EBITDA per ton in Q1 FY25, given the recent increase in steel prices?
A: We anticipate an upward trend in EBITDA per ton due to the stable or rising steel prices. This, coupled with volume growth, should positively impact our financial performance.
Q: Can you provide an update on the demerger of the consumer durable business?
A: The demerger process is progressing as planned. We are working on the necessary regulatory and operational steps to ensure a smooth transition.
Q: What is your strategy to handle potential price wars in the steel pipe segment, given the increasing competition?
A: We are focusing on value-added products and leveraging our technological and engineering capabilities to maintain a competitive edge. Our diversified product mix and strategic market positioning will help us navigate any price wars.
Q: What are your revenue and growth projections for the lighting division in FY25 and FY26?
A: We expect the lighting division to continue its growth trajectory, driven by increased demand for value-added products and strategic market expansion. We are projecting significant revenue growth in both FY25 and FY26.
Q: How do you plan to sustain growth in the steel pipes segment, considering the current market conditions?
A: We are expanding our operational capacity and focusing on high-margin products. Our strategic initiatives and government infrastructure projects will support sustained growth in the steel pipes segment.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
