Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Surya Roshni Ltd (BOM:500336, Financial) announced a 50% interim dividend and a 1:1 bonus share issue, rewarding shareholders.
- The lighting and consumer durable segment achieved a 5% year-on-year revenue increase, driven by better cost management and product mix.
- The company reported robust volume growth of about 50% in the water heater segment, indicating strong seasonal demand.
- Expansion into semi-urban and rural markets is enhancing the company's geographical presence and resilience against price pressures.
- Operational efficiencies in the steel pipe segment helped mitigate losses from price erosion, maintaining an EBITDA margin of INR 2401 per ton.
Negative Points
- The steel pipe business faced a significant decline in revenue due to a drop in steel prices and slow demand.
- Export volumes declined due to geopolitical conflicts, particularly in the Middle East, affecting overall performance.
- The professional lighting segment experienced delays in project orders due to general elections, impacting growth.
- The company recalibrated its full-year volume growth target for the steel pipe segment to 7-8%, reflecting current market conditions.
- There was a 20% sequential decline in steel business volumes, attributed to cautious purchasing behavior among distributors.
Q & A Highlights
Q: Can you explain the sharp drop in the overall revenue and volume in the steel business?
A: The decline in revenue and volume is primarily due to a significant drop in steel prices, which led to cautious purchasing behavior among distributors. This resulted in a 20% sequential decline in volume. However, we expect recovery in the coming quarters with new orders in the API and oil and gas sectors. - Managing Director
Q: What is the outlook for the lighting and consumer durables segment, given the delays in project orders?
A: Despite delays due to the general election, the lighting segment showed resilience with a 5% year-on-year increase in revenue. We expect the order book for professional lighting to improve in the second half, supporting our growth targets. - CEO, Lighting and Consumer Durables
Q: How do you plan to improve margins in the steel pipe segment in the second half of the year?
A: We anticipate margin improvement due to stabilizing steel prices and increased demand, particularly in the agriculture and export markets. Operational efficiencies and a better product mix will also contribute to margin recovery. - CFO
Q: What are the company's plans regarding capacity expansion and capital expenditure?
A: We are investing in expanding our facilities, including a new cold rolling facility and a spiral plant, which are expected to be operational by mid-December. This expansion aligns with our strategy to enhance capacity and efficiency. - COO, Steel Operations
Q: Can you provide more details on the company's strategy for the lighting division and new product lines?
A: We are focusing on expanding our premium product offerings and increasing our geographical presence, particularly in semi-urban and rural markets. This strategy aims to offset price erosion in core product lines and reinforce our market position. - CEO, Lighting and Consumer Durables
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
