Surya Roshni Limited — Investor Meet, 25-11-2024: Analysts/Institutional Investor Meet/Con. Call Updates

1. **Financial Performance:** Surya Roshni reported Q2 FY25 revenue of ₹1,529 Cr, a decline from ₹1,916 Cr YoY. EBITDA fell to ₹83 Cr from ₹139 Cr, and PAT dropped to ₹34 Cr from ₹76 Cr. For the first half, revenue was ₹3,422 Cr, down from ₹3,791 Cr, with EBITDA at ₹242 Cr compared to ₹255 Cr last year. The Steel Pipe segment saw significant pressure with revenue down to ₹1,135 Cr from ₹1,539 Cr and EBITDA per ton decreasing to ₹2,901.

2. **Future Outlook and Growth Drivers:** Management remains optimistic, targeting a 12% to 15% revenue growth for FY25 and forecasting EBITDA margin stability. The focus is on expanding premium offerings and enhancing geographical reach, particularly in semi-urban markets.

3. **Order Book and Operational Updates:** The company is scheduled to commission a spiral plant at Gwalior next month, which is expected to boost Q3 performance. Significant CAPEX, including ₹30 Cr for the Hindupur facility, is planned, aiming for increased output and efficiency in the Steel segment.

4. **Analyst Q&A Insights (Detailed):**

- **Revenue and Profitability:** Analysts expressed concern over revenue declines amid falling prices but were reassured by management’s confidence in achieving a 12% volume increase in Steel.

- **Market Position and Competitive Landscape:** Management emphasized strategic investments in value-added products to maintain a competitive edge, targeting an expansion from 45% to 60% in this category.

- **Operational Challenges or Risks:** Significant price drops in raw materials and extended monsoons have impacted margins. Management remains cautious yet optimistic about recovering lost ground in the coming quarters.

- **Capex and Capital Allocation:** A total CAPEX of ₹500 Cr planned over three years is aimed at enhancing production capabilities. The first half saw ₹50 Cr spent, with further investments expected in H2.

- **Strategic Priorities and Long-Term Vision:** There’s a clear focus on improving margins by launching new products and expanding into new markets, aiming for an EBITDA of ₹590 Cr for FY25.

5. **Market or Regulatory Updates:** The management highlighted a pickup in government tenders post-elections, indicating a rebound in infrastructure projects, crucial for the Steel Pipe segment.

6. **Strategic Focus Areas:** A clear drive toward innovation and cost control is evident. Management aims to enhance product mix and efficiency in operations as central themes to weather current market challenges.

7. **Investor Insight:** The firm’s ongoing strategic focus, alongside signs of recovery in both pricing and order volume, leans towards a potential ‘buy’ position, given the resilience shown in the Lighting segment and growth prospects in the Steel division, despite short-term pressures.