Smallcap stock jumps 4% after receiving ₹116 Cr work order from GAIL India Ltd

The shares of a prominent Pipes and Lighting manufacturer gained up to 4 percent after the company secured a prominent work order from GAIL India Limited worth Rs 116.15 crore. 

Price Movement 

With a market capitalization of Rs 5,635.68 crore, the shares of Surya Roshni Ltd were trading at Rs 258.95 per share, decreasing around 1.71 percent as compared to the previous closing price of Rs 263.45 apiece. 

Reason for Rise 

The share of Surya Roshni Ltd has seen positive movement after securing a prominent work order from GAIL India Limited worth Rs 116.15 crore for Supply of HFW 355.60 X 8. 7 & 10.3 WT, GR X-70 PSL-2, Coated Pipes. 

Financial Performance 

In Q3 FY’25, the company’s revenue declined 4 percent YoY due to an 18 percent fall in HR coil prices but rose 22 percent QoQ. EBITDA surged 87 percent and PAT jumped 163 percent QoQ. The Lighting and Consumer Durable segment saw strong 12 percent YoY growth, led by professional lighting and home appliances. 

Business Segment 

The Lighting and Consumer Durables segment recorded nearly 15 percent YoY growth in professional lighting, led by strong demand for LED street lights and a Rs 150 crore order book. Focus on premiumization, innovation, and cost control improved margins. Rs 25 crores is being invested in Gwalior for a new wire unit. 

In the Steel Pipe and Strip segment, volumes rose 8 percent YoY, but revenue fell 8 percent to Rs 1,417 crores due to lower HR coil prices. However, sequential revenue rose 25 percent, with EBITDA/ton jumping 78 percent QoQ to Rs 5,163. Value-added products made up 45 percent of revenue, with a Rs 600 crore order book. 

Also read: Goldman Sachs Backed stock in focus after receiving ₹5.93 Cr incentives under PLI scheme 2.0

Capex and Capacity Expansion 

The company plans Rs 500 crores capex over two years to boost capacity from 12 to 19 lakh tons. Key investments include Rs 125 crores at Hindupur to add 2 lakh TPA, Rs 75 crores at Bhuj for large pipes, and upcoming plants at Gwalior and Bahadurgarh. 

Market Dynamics 

Steel prices are at a five-year low, creating a stable cost environment. Management anticipates no further price declines, which could help stabilize profitability. However, global trade uncertainties and US tariff policies have weighed on export sales, impacting overall growth in international markets.

Strategic Focus 

The management targets double-digit revenue growth in lighting and consumer durables for FY’25, supported by investments in technology and product expansion. With a strong focus on long-term profitability and innovation, the company maintains zero debt and achieved a cash surplus of Rs 222 crores in 9M FY’25. 

Future Outlook 

The management expects at least 15 percent annual volume growth post-capex, driven by a focus on value-added products and operational efficiency. They aim to enhance margins and profitability, targeting EBITDA per ton of Rs 7,000 by FY ’27–28 through improved gross margins and better operational leverage. 

Company Snapshort 

Surya Roshni Limited has emerged as India’s largest ERW Pipes exporter, largest GI Pipes producer, and the second largest in the lighting segment. Its focus is on developing the value-added product mix (3LPE Coated pipes, Alkyd pipes, etc.). 

Written by Abhishek Singh

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