This smallcap stock is up 8%, has zoomed 67% in one month; here's why

On January 1, Surya Roshni had said that it's lighting and consumer durable business is debt free i.e. completely borrowing free segment as on December 31, 2023.

Shares of Surya Roshni hit a new high of Rs 839, as they rallied nearly 8 per cent on the BSE in Wednesday’s intra-day trade in  an otherwise subdued market. The stock surpassed its previous high of Rs 838.20 touched on January 1, 2024.

At 12:56 PM; the stock was up 6 per cent at Rs 825. In past one month, the stock price of Surya Roshni has zoomed 67 per cent, as against less than 2 per cent gain in the benchmark index.

On January 1, Surya Roshni announced that the company's Lighting and Consumer Durable business is debt free i.e. completely borrowing free segment as on December 31, 2023. The segment has no long term and Working Capital borrowings as on date, the company said. The management said the company remains committed to sustain high-growth trajectory.

Surya Roshni started with the manufacturing of steel tubes and later, diversified into lighting in 1984, PVC pipes in 2010 and consumer durables like fans and home appliances in 2014-15.

Surya' Brand and ‘Prakash Surya’ have a strong presence of more than four decades in India. It enjoys strong Pan India presence with extensive dealer network in both of its businesses i.e. Steel Pipes & Strips and Lighting & Consumer Durables.

In September quarter (Q2FY24), in spite of marginal decline in revenue on account of price erosion with the comparable quarter, the company reported an improved profitability on YoY basis, on back of favourable volume growth in Steel Pipes and value-added products in Lighting and Consumer Durables segment. The consolidated profit after tax jumped 12 per cent YoY to Rs 76 crore, while revenue was down 3 per cent YoY at Rs 1,916 crore.

In the Steel Pipes and Strips, the management expects volume growth to continue at the similar rate for H2FY24 driven by domestic market with an aim to achieve EBITDA / Ton matrix similar to previous year.

The company has an order book from Oil & Gas sector for API pipes and expects resurgence in export demand in the medium term. The management also expects the positive business momentum for GI pipes to persist throughout the fiscal years 2024 and 2025.

The demand for new age lighting and consumer durables has exhibited robust growth in recent quarters. The company's recent product launches are expected to strategically leverage emerging trends, thereby bolstering market position, the management said.

Meanwhile, shares of Surya Roshni turned ex-stock split on October 6, 2023 in the ratio of 2:1 i.e., sub-division of 1 equity share of the face value of Rs 10 each into 2 equity shares of the face value of Rs 5 each.

The rationale behind the split is to enhance the liquidity in the capital market to widen the shareholder base and to make the shares more affordable to small investors, the company said.