Surya Roshni gains 7%, hits record high on Rs 171 crore order win from IGGL

Illustration by binay sinha
Shares of Surya Roshni rallied 7 per cent and hit a record high of Rs 514.25 on the BSE in the intra-day on Tuesday after the company received order of Rs 170.52 crore for coated line pipes for gas grid pipeline project from Indradhanush Gas Grid (IGGL).

The stock of the company engaged in steel pipes and strips, lighting, and consumer durables business, surpassed its previous high of Rs 522, touched on February 9, 2018.

“The Company has obtained order amounted to Rs. 170.52 crore (excluding GST) for supply of coated line pipes to lndradhanush Gas Grid Limited (IGGL) for NorthEast gas grid pipeline project,” Surya Roshni said in exchange filing.

For the January-March quarter (Q4FY21), Surya Roshni reported 96 per cent year on year (YoY) jump in consolidated net profit at Rs 59 crore, on the back of healthy revenues. The company’s revenue grew 29 per cent YoY at Rs 1,722 crore.

The management said the strong profit growth was translating to substantial improvement in return ratios. The margin improvement was due to better realizations. The working capital optimization and strong cash flow generation led to debt reduction by Rs 374 crore during FY21. The debt to equity improved to 0.52x from 0.88x as of March 2020, the management said.

In lighting and consumer durables, the management is confident of maintaining the steady growth trajectory that it has witnessed in the last three quarters. Favourable product mix towards value added products have resulted in margin expansion. The company is focusing on certain products like LED battens and downlighters, high value product mix and smart lighting which have good growth potential, the management said.

In steel tubes and pipes, the capacity utilisation has been optimal. API pipes have witnessed good traction with a substantial order book and that has reflected in the significant increase in EBITDA/tonne in this quarter. The company is participating in tenders under the various government initiatives like Jal Jeevan Mission across India and have received good quantum of orders for the same. The export market is also picking-up and is expected to grow over 25 per cent in FY22.

Surya Roshni’s products in steel pipes and strips segment are sold under the brand ‘Prakash Surya’ and those in the lighting and consumer durables segment (including all types of lamps, home appliances, PVC pipes, etc) are sold under the ‘Surya’ brand.

The steel pipes & strips manufacturer a wide range of products and is the largest manufacturer of GI pipes in India and is the largest Exporter of ERW Pipes. The business has further strengthened with setup of 3LPE coating facility unit in 2018 (mainly to oil & gas and CGD sector), whereas, being the 2nd largest lighting company in India, the lighting business manufactures an array of conventional to modern LED lightings. The consumer durable offers a variety of fans and home appliances.

At 09:30 am, the stock of Surya Roshni was up 5 per cent at Rs 504, as compared to 0.01 per cent decline in the S&P BSE Sensex. A combined 170,000 shares have changed hands on the counter on the NSE and BSE, so far.

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