The stock rallied and made a hit a 52 week high of Rs.514.25 in today’s trading session after the company received order of Rs 170.52 crore for coated line pipes for gas grid pipeline project from Indradhanush Gas Grid (IGGL).
In an exchange filing, the company said “The Company has received an order worth Rs. 170.52 crore (excluding GST) for the supply of coated line pipes to lndradhanush Gas Grid Limited (IGGL) for the NorthEast gas grid pipeline project.”
Surya Roshni reported a 96% year on year (YoY) increase in consolidated net profit at Rs 59 crore for the March ended quarter (Q4FY21), on the back of healthy revenues. The company’s revenue increased by 29% year on year to Rs 1,722 crore.
According to management, the company’s strong profit growth is translating into a significant improvement in return ratios. Better realisations accounted for the increase in margin. Working capital optimization and strong cash flow generation resulted in a Rs 374 crore debt reduction during FY21. According to management, the debt-to-equity ratio has improved to 0.52x from 0.88x as of March 2020.
In lighting and consumer durables, management is confident in maintaining the steady growth trajectory seen in the previous three quarters. Margin expansion has resulted from a favourable product mix toward value-added products. According to the management, the company is focusing on certain products with high growth potential, such as LED battens and downlighters, a high value product mix, and smart lighting.
The capacity utilization in steel tubes and pipes has been optimal. API pipes have seen good traction with a large order book, which has resulted in a significant increase in EBITDA/tonne in this quarter. The company is participating in tenders under various government initiatives such as the Jal Jeevan Mission across India and has received a large number of orders as a result. The export market is also improving and is expected to grow by more than 25% in FY22.
Surya Roshni’s steel pipes and strips are sold under the brand ‘Prakash Surya,’ while those in the lighting and consumer durables segment (including all types of lamps, home appliances, PVC pipes, and so on) are sold under the brand ‘Surya.’
Steel pipes and strips manufacture a wide range of products and is India’s largest manufacturer of GI pipes and largest exporter of ERW Pipes. The business has been strengthened further with the establishment of a 3LPE coating facility unit in 2018 (primarily for the oil and gas and CGD sectors), whereas the lighting business, as the second largest lighting company in India, manufactures a wide range of traditional to modern LED lightings. A wide range of fans and home appliances are available from consumer durable.
Surya Roshni was founded in 1973 with a steel pipe plant in Bahadurgarh, Haryana. This plant is now one of the largest in Asia, with an annual production capacity of 180000 MT of steel pipes. Fluorescent tube lights, GLS lamps, CFL lamps, HPSV Lamps, HPMV Lamps, Metal Halide Lamps, and ERW pipe are now part of the company’s product portfolio. Surya Roshni is the second largest seller of GLS and FTL in India.
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