Surya Roshni Limited (SURYAROSNI) Q3 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Surya Roshni Limited Q3 FY '26 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is now being recorded. I now hand the conference over to Mr. Raju Bista, Managing Director of Surya Roshni Limited. Thank you, and over to you, sir.

Thank you very much. Good evening, everyone. On behalf of Surya Roshni Limited, I once again extend a very warm welcome to everyone for joining us today. On this call, we are joined by B.B. Singal, CFO and Company Secretary; Mr. Gaurav Jain, CEO, Steel Division; Mr. Vasumitra Pandey, CEO, Lighting and Consumer Durable; Mr. Naresh Singhal, Executive Director, Steel Division; and SGA, our Investor Relations Advisor. I hope everyone had an opportunity to go through the financial results. Now moving on to the overall financial performance. In the Q3 FY '26, our consolidated revenue increased by 3% year-on-year to INR 1,927 crores. While EBITDA stood at INR 148 crores with margins of 7.7%. Consolidated PAT for the quarter is INR 80 crores. For the nine-month period extended -- period ended December 2025, the company reported consolidated revenue of INR 5,377 crores, EBITDA of INR 371 crores and PAT of INR 188 crores compared to INR 5,290 crores, INR 397 crores and INR 217 crores, respectively, in nine months FY '25. We are a zero debt company with a net cash surplus of INR 250 crores as of December 31, 2025. Coming to Lighting and Consumer Durable, during Q3 FY '26, the Lighting and Consumer Durables segment delivered a stable operating performance despite a challenging of uneven demand condition on select appliances category. Segment revenue for the quarter stood at INR 476 crores, representing a growth of about 6% year-on-year and a strong sequential growth of nearly 10% over Q2 FY '26. This was largely driven by festival season demand, healthy volume across consumer lighting categories and the traditional stronger second half demand profile for this lighting business. EBITDA margin stood at approximately 8.8%, while EBITDA margin remained under pressure due to elevated input cost and category mix, absolute EBITDA improved sequentially over Q2 of FY '26, driven by higher volumes and better operating leverage. Category-wise, consumer lighting continued to perform well during the quarter. We witnessed very strong volume growth across LED bulb, batten and downlighter segment, supported by sustained retailer engagement, regular product launches and enhanced brand visibility initiatives. Professional lighting also remained a key growth driver with consistent transaction across infrastructure-led applications such as airport, railway, tunnel, stadium and facade lighting. Now moving on to the Steel Pipe and Strip segment. During FY '26 Q3, the Steel Pipe and Strip segment delivered a stable operating performance in a challenging environment marked by volatility in steel prices and uneven demand condition across select end markets. Revenue stood at INR 1,451 crores, supported by dispatch volume of 2.37 lakh tones, reflecting steady year-on-year growth and sequential improvement over Q2 FY '26. Volume momentum remained healthy across most product categories, reinforcing our confidence in achieving full year volume as guided for FY '26. On the profitability front, EBITDA for the quarter stood INR 106 crores with margins of approximately 7.3%. Margins were imported -- impacted by a onetime inventory loss of around INR 500 per ton arising from the sharp correction in steel prices during October and November month. Importantly, despite the headwinds, EBITDA improved sequentially by about 4% quarter-on-quarter, supported by better operating leverages and partial recovery in realization as steel price stabilized towards the later part of the quarter. However, hollow section and structural pipes continue to be the very key growth drivers aided by strong demand from infrastructure, industry fabrication and engineering applications. Volume in this segment increased meaningfully, and we continue to invest in capacity expansion across our plants at Anjar, Gwalior, Bahadurgarh and Hindupur, along with the installation of new DFT lines to support sustained growth in this particular category. Export accounted for almost 19% of volume growth in Q3 FY '26 and with export volumes growing almost 10% year-on-year. As of the end of the quarter, the order book stood at approximately INR 500 crores for Steel division and almost INR 150 crores for lighting, led by spiral pipes, export and domestic API orders. Overall, while near [term] volatility persists, particularly on raw material price, exports and government linking projects, we remain focused on mix optimization, disciplined execution and capacity augmentation. Now I will request our CFO, Mr. B.B. Singal, to share his line.

Thank you, respected MD, sir, and a very good afternoon to all the participants on the call. For the quarter, the revenue was INR 1,927 crores as compared to INR 1,868 crores, a growth of 3% year-on-year basis. EBITDA and PAT stood at INR 148 crores and INR 80 crores as compared to INR 156 crores and INR 90 crores, respectively. For 9 months FY '26, the revenue was INR 5,377 crores as compared to INR 5290 crores, a growth of 2% year-on-year basis. EBITDA and PAT stood at INR 371 crores and INR 188 crores as compared to INR 397 crores and INR 217 crores, respectively. In Lighting and Consumer Durables for the quarter, the revenue stood at INR 476 crores as against INR 451 crores, a growth of 6% year-on-year basis. EBITDA and PBT stood at INR 42 crores and INR 31 crores as compared to INR 45 crores and INR 35 crores, respectively. For nine-months financial year '26, the revenue stood at INR 1,308 crores as against INR 1,232 crores, a growth of 6% year-on-year basis. EBITDA and PBT stood at INR 112 crores and INR 82 crores in nine-months financial year '26 as compared to INR 115 crores and INR 87 crores, respectively, in the same period last year. In the steel pipes and strips during Q3 FY '26, the revenue was INR 1,451 crores as compared to INR 1,417 crores, a growth of 2% year-on-year basis. Similarly, EBITDA per metric ton stood at INR 4,810 compared to INR 5,163 in the same period last year. EBITDA and PBT stood at INR 106 crores and INR 76 crores as against INR 111 crores and INR 86 crores, respectively. For nine-months FY '26, the revenue is INR 4,069 crores as compared to INR 4,061 crores. Similarly, EBITDA per metric ton stood at INR 4,320 compared to INR 4,840, EBITDA and PBT stood at INR 259 crores and INR 171 crores in nine-months of FY '26 as against INR 282 crores and INR 203 crores, respectively, in the same period last year. Improved capacity utilization, working capital optimization and cost rationalization enabled us to become a zero debt company and having cash surplus of [indiscernible] INR 245 crores in nine-months FY '26. In Q3 FY '26, our net working capital cycle was 61 days with a return on capital employed, ROCE of 17.57% and a return on equity, ROE of 12.65%. With this, I conclude the presentation, and we can now open the floor for further questions and answers.

Thank you very much. [Operator Instructions]. The first question is from the line of Dhaval Dama from Enigma Small Opportunities Fund. Please go ahead.

Hi sir. This is Viraj here, [Foreign Language]. We are short of our ambition by like [Foreign Language].

Hello? Yes Viraj [Foreign Language]

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[Foreign Language] We were just probably 2, 3% short here and there [Foreign Language]

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The next question is from the line of Shyam from MSA Capital

Hello sir, good evening.[Foreign Language] other markets will cover up and offset that export.

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[Foreign Language] they should be able to cover up for that shortfall.

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[Foreign Language] year-on-year because of the slowdown [Foreign Language] do you think this is the start of some improved tender activity to happen FY '27.

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[Foreign Language] are you looking to shift your utilization back to the domestic market more?

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The next question is from the line of Kiran from TableTree Capital.

[Foreign Language] So this year, we had a very tough year. Q1, we had an SAP issue. Now Q3, we are having an API issue. So this year seems to be probably the most challenging year of Surya Roshni in the past few years that we have seen. Sir, [Foreign Language] let's say, we do 9.3 lakh, 9.4 lakh tons [Foreign Language] are we seeing -- or do you see the potential for a 12 lakh ton kind of number where we can get -- where we can sell through that volume? Or is it going to be substantially lesser given the challenges with Jal Jeevan Mission and everything else?

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[Foreign Language] is it including some volume from Jal Jeevan Mission or a government program standpoint or is it not including that, that can be an optionality [Foreign Language]

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The next question is from the line of Keshav Garg from Counter Cyclical. Please go ahead.

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Thank you Ladies and gentlemen, we will take that as the last question for today. I now hand the conference over to Mr. B. B. Singal for his closing comments. Over to you, sir.

Thank you, everyone, for joining us today on this earnings call. We appreciate your interest in Surya Roshni Limited. I sincerely once again thank our MD sir and the CEOs for sparing their valuable time and addressing queries raised by participants who attended the call. For any further queries, you kindly contact SGA, our Investor Relations advisor. Thanks. Good evening to all. Thank you very much.

Thank you. On behalf of Surya Roshni Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.