Surya Roshni tanks after Q2 PAT drops 55% YoY

Surya Roshni dropped 9.77% to Rs 552 after the company reported weak financial results for the quarter ended 30 September 2024.

On a consolidated basis, net profit of Surya Roshni fell 55% to Rs 34 crore on 20% decline in net sales to Rs 1,529 crore in Q2 September 2024 over Q2 September 2023. Profit before tax stood at Rs 46 crore in the Q2FY25, down 56% year-on-year (YoY). EBITDA was at Rs 83 crore, down 40% YoY.

The company stated that steel pipes business experienced sharp decline in HR steel prices. Dampened demand resulted in lower revenues. However, operational efficiencies helped mitigate losses arising due to price erosion. Meanwhile, in the lighting & consumer durables segment, price erosion in LED products continued. However, better cost management and product mix resulted in a better performance.

Total expenses fell 18.3% to Rs 1452.66 crore in Q2 FY25 over Q2 FY24. During the quarter, cost of materials consumed stood at Rs 1061.70 crore (down 24.8% YoY) while employee benefits expense was at Rs 101.17 crore (up 3% YoY).

Consolidated net cash flow from operating activities decreased to Rs 110.72 crore for the six months ended September 2024, compared to Rs 252.27 crore for the same period in 2023.

Commenting on the results, the companys managing director, Raju Bista, said In Q2FY25, posed several challenges for the companys businesses due to seasonal factors, price volatility, and geopolitical tensions affecting export markets. Nonetheless, the company has managed these headwinds through stringent operational efficiencies and proactive capacity expansion, which are expected to support gradual improvement in both domestic and export markets.

Strategic initiatives in operational efficiency, high-margin product focus, and regional market expansion are expected to support improved performance in the second half of the fiscal year."

Meanwhile, Surya Roshni said it will issue one bonus share for each share held by shareholders as on the record date (1:1 bonus issue). Record date for the bonus issue of shares is yet to be determined.

Additionally, the firm also announced a dividend of Rs 2.5 per share, the record date for which has been fixed as November 29, 2024.

Surya Roshni is a diversified Indian company with a strong presence in the steel pipes & strips and lighting & consumer durables businesses. The company has grown to become the largest manufacturer of GI pipes in India and a major exporter of ERW pipes. In addition to steel products, Surya Roshni offers a wide range of lighting solutions, including conventional and LED lighting, as well as consumer durables like fans and home appliances.

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