Surya Roshni Limited Q3 FY26 Earnings Call Summary

Summary

Surya Roshni Limited - Q3 FY 2026 Earnings Call Summary Wednesday, February 11, 2026 4:00 P.M. (IST)

Event Participants

Executives 5 B. B. Singal (CFO & Company Secretary), Gaurav Jain (CEO, Steel), Naresh Singhal (ED, Steel), Raju Bista (MD), Vasumitra Pandey (CEO, Lighting & Consumer Durables)

Analysts 3 Dhawal Dhama/Viraj (Enigma Small Opportunities Fund), Keshav Garg (Counter Cyclical), Shyam Sampat (MSA Capital)

Financials & KPIs

Geographic & Segment Commentary

Steel Pipes and Strips: Revenue reached ₹1,451 crores with healthy growth in Hollow sections and Structural pipes (25% QoQ) for infrastructure use. Despite an 8% degrowth in Black Round Pipes and 35% in API, exports grew 10% YoY, accounting for 19% of total volume. Capacity expansion is underway at Anjar, Gwalior, and Hindupur with new DFT lines.

Lighting & Consumer Durables: Segment revenue grew 6% YoY to ₹476 crores, led by Professional Lighting (Infrastructure/Airports) and Consumer Lighting (LEDs). The newly launched “Wire” business saw high acceptance, though it faced initial supply constraints. Management is increasing capacity for wires and luminaires to meet rising B2B and B2C demand.

Company-Specific & Strategic Commentary

API Innovation: Surya is the first Indian company to have ERW pipes approved as an alternative to Seamless pipes for ONGC; 4,500 tonnes already dispatched.

Capacity Expansion: Investing ₹250 crores in existing plants for capacity augmentation, including ₹160 crores in active projects and ₹100 crores in upcoming work orders.

Brand Visibility: Invested an additional ₹10-12 crores in marketing/publicity during Q3 to support the new Wire category and enhance brand presence.

Export Diversification: Offsetting EU quota restrictions (CBAM) by expanding into Middle Eastern and African markets to maintain export momentum.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Steel Margins & Inventory

• Question: Why were volumes lower than the 2.6L tonne target? (Viraj)
• Answer: API segment saw a 35% degrowth. However, Q4 will see a major rebound with EBITDA expected at ₹5,600-5,700/tonne due to inventory gains of ₹40-45 crores (Raju Bista).

Demerger & Capital Allocation

• Question: Will the company consider a demerger or buyback given the high cash levels? (Viraj/Keshav Garg)
• Answer: Demerger is a valid suggestion under consideration. Buyback will be discussed at the Board level, especially given the new tax benefits (Raju Bista).

API vs. Seamless Opportunity

• Question: Is the ONGC order for ERW pipes a permanent shift? (Shyam Sampat)
• Answer: Surya is the first to get ERW approved as an alternative to Seamless for ONGC; this is a major “silver lining” for future high-margin volumes (Raju Bista).

Export Strategy

• Question: Will CBAM permanently hit European exports? (Keshav Garg)
• Answer: While EU quotas reduce available volume by ~1,000 tonnes/month, the company is active in Middle East/Africa and uses advance authorization for duty-free imports to stay competitive (Raju Bista).

Key Takeaway

Surya Roshni delivered a resilient Q3 FY2026 with consolidated revenue growing 3% to ₹1,927 crores and maintaining its zero-debt status with ₹245 crores in surplus cash. While the Steel segment faced a ₹12 crore inventory loss due to price corrections and a 35% contraction in API volumes, the Lighting segment grew 6% YoY, bolstered by the successful launch of the “Wire” category. Management is strategically pivoting toward B2B professional lighting and substituting high-value seamless pipes with ERW for ONGC, which is expected to drive margin expansion. For FY 2027, the company guided for a significant EBITDA step-up to ₹750 crores, supported by a 1.1 million tonne steel volume target and ₹2,100 crore lighting revenue. Investors should monitor the stability of steel prices and the successful execution of the ₹250 crore capacity expansion as the company pursues its medium-term growth targets.