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Surya Roshni Ltd
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Ladies and gentlemen, good day, and welcome to the Surya Roshni Limited Q2 FY '25 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of the future performance and involve risks and uncertainties that are difficult to predict.
[Operator Instructions] Please note that this conference has been recorded. I now hand the conference over to Mr. Raju Bista, Managing Director of Surya Roshni Limited. Thank you, and over to you, sir.
Thank you very much, and good afternoon, everyone. Once again, on behalf of Surya Roshni, I extend a very warm welcome to everyone for joining us today in this con call. On this call, we were joined by Mr. Naresh Singhal, ED, Steel Operations; Mr. Jitendra Agrawal, CEO, Lighting and Consumer Durable; Mr. Bharat Bhushan Singal, who is our company's CFO and Company Secretary as well; Mr. Gaurav Jain, ED and COO, Steel Operationd; and SGA, our Investor Relations adviser.
I hope everyone had an opportunity to go through the financial results. And now quickly moving on to the overall financial performance and highlights. As far as Q2 FY '25 is concerned, we continue to navigate a complex and challenging market landscape. Both our Steel Pipe business and Lighting & Consumer Durable segment encountered unique market dynamics that influence our results. The Steel Pipe business experienced sharp decline in the hot-rolled coil prices, also slow demand resulting in lower revenue. However, operational efficiencies helped mitigate losses arising due to the price erosion.
Similarly, in the Lighting & Consumer Durables segment, both better cost management and better product mix has resulted in a good performance. And I'm happy to announce -- to inform you that the company has -- in fact the Board has approved to reward our shareholders as an interim dividend 50%, which is INR 2.50 per equity share on the pre-bonus paid-up capital share.
Also happy to inform you that the company has also declared bonus share in the ratio of 1:1, 1 bonus share for every 1 existing share of INR 5 per each fully paid up.
Now coming to the Lighting & Consumer Durables. Our Lighting & Consumer Durables segment focus, resilience achieving 5% quarter-on-quarter -- year-on-year increase in revenue. In consumer lighting, we saw good volume growth across all our subsegment in spite decline in prices of LED product, which is still continuing. And in Professional Lighting segment, it delivered a decent growth, but due to the general election in quarter 1, there has been a delay in some of the project orders. However, the inquiry book received a very good response in Professional Lighting segment. The business registered higher single-digit growth in Q2 FY '25 and double-digit growth in H1 FY '25.
Now coming to the consumer appliances, the seasonal demand for water heater was robust and so...
Sorry to interrupt. Sir, we lost your audio there.
Is it okay now?
Yes, yes, you may proceed.
So in consumer appliances, the seasonal demand for water heater was robust and saw excellent volume growth of about 50% additionally. New segment in the mixer grinder and iron categories, along with a positive response to our newly launched Mono Block residential pumps. Similarly on our regional expansion into semi-urban and rural markets where premium product adoption is rising quickly positions as to tap into growth outside the traditional metro areas, adding resilience to our portfolio against ongoing price pressures.
By expanding our premium offering and increasing our geographical presence, particularly in semi-urban markets, we aim to reinforce our market position and offset price erosion in core product lines. Our focus remain on achieving FY '25 revenue growth of approximately 12% to 15% alongside caution optimism for EBITDA margin stability.
Now coming to the Steel Pipes and Strips segment. One of the key factors affecting our Q2 FY '25 performance was a significant reduction in HR coil prices, which fall by approximately INR 7,500 per metric ton during the quarter ended Q2 FY '25. The downward trend leads to cautioned purchasing behavior among distributors who opted to limit their inventory holding in anticipation of further price adjustment. The decline in steel price also placed pressure on EBITDA with an approximately loss of about INR 3,000 per ton in inventory, which also includes prolonged monsoon and export freight subdued government tendering for API order. Nevertheless, our proactive operation efficiencies enable us to offset some of this impact, allowing us to sustain an EBITDA per ton of INR 2,401 (sic) [ INR 2,901 ].
Our value-added products mix, such as API, Spiral and Galvanized pipe constituted approximately 45% of our revenue in H1 FY '25, underscoring our ongoing strategy to enhance margins through premium offerings.
The API faced muted demand due to limited government tendering while the Spiral large-dia pipe saw robust performance driven by substantial order inflow, particularly within the water sector. Export volume declined on account of enhanced freight and geopolitical conflicts such as in the Middle East. However, we remain optimistic about export recovery within the next 6 months, driven by stabilizing demand.
The commissioning of our pilot plant at Gwalior is scheduled for next month with a healthy order backlog that will enhance Q3 volume and performance. Our ERW mill in Bahadurgarh plant operational since July already started, has already achieved 7,000 tons in outputs. And additionally, expansion are underway. Our Bahadurgarh cold rolling facility and spiral plant are set through launch by mid-December, contributing to our Q4 output.
The Hindupur facility expansion is underway with an initial CapEx allocation of about INR 30 crores. We anticipate full scale operation at the Hindupur facility within the next 12 months. Meanwhile, the expansion at our Anjar Gujarat facility will advance following a technical reviewing in collaboration with the supplier. This strategic investment, aligned with our focus on efficiency and capacity, are anticipated to strengthen the operational backbone of the steel pipe segment.
We have recalibrated our full year volume growth target to 7% to 8% year-on-year for FY '25 initial segment. Reflecting current market condition, we anticipate EBITDA per tonne to stabilize within the range of INR 5,000 to INR 5,200 per ton, supported by our operational efficiency and a positive demand outlook for the coming months.
The recent recovery in steel price added by government intervention signals a promising trend for margin recovery. Looking forward, we are optimistic about Q3 and Q4 as we continue to leverage our expanded capacity, diversified geographic focus and operational efficiencies.
By strategically positioning ourselves in value-added and export market, we aim to drive growth in the business vertical. Now for the other financial issues, I will like to request our CFO, Mr. B. B. Singal, to share his points.
Thank you, respected M.D., sir, and a very good afternoon to all the participants on the call. For the quarter, the revenue was INR 1,529 crores as compared to INR 1,916 crores. EBITDA and PAT stood at INR 83 crores and INR 34 crores as compared to INR 139 crores and INR 76 crores, respectively.
For first half of financial year '25, the revenue was INR 3,422 crores as compared to INR 3,791 crores. EBITDA and PAT stood at INR 242 crores and INR 127 crores as compared to INR 255 crores and INR 135 crores, respectively.
In Lighting & Consumer Durables, for the quarter, the revenue stood at INR 395 crores as against INR 377 crores, a growth of 5% year-on-year basis. EBITDA and PBT stood at INR 36 crores and INR 26 crores, respectively. For H1 financial year '25, the revenue stood at INR 781 crores as against INR 751 crores, a growth of 4% year-on-year basis. EBITDA and PBT stood at INR 70 crores and INR 52 crores as compared to INR 68 crores and INR 54 crores, respectively.
In the Steel Pipes and Strips, during Q2 of financial year '25, the revenue was INR 1,135 crores as compared to INR 1,539 crores. Similarly, EBITDA per metric ton stood at INR 2,901 compared to INR 5,104. EBITDA and PBT stood at INR 48 crores and INR 20 crores against INR 104 crores and INR 76 crores respectively.
For H1 FY '25, the revenue was INR 2,643 crores as compared to INR 3,042 crores. Similarly, EBITDA per metric ton stood at INR 4,653 per metric ton compared to INR 4,758. EBITDA and PBT stood at INR 172 crores and INR 117 crores against INR 187 crores and INR 131 crores, respectively.
Improved capacity utilization, working capital optimization and cost rationalization enabled us to become a zero-debt company and having cash surplus of INR 136 crores in H1 financial year '25.
With this, I conclude the presentation, and we can now open the floor for further questions and answers.
[Operator Instructions] First question is from the line of Jatin Damania from Swan Investments.
Sir, just to start with your steel business, now if we look at the steel business, there is a sharp drop in the overall revenue as you rightly indicated about the fall in the prices. But when you look at overall volume, our volume has also declined almost by 20% sequentially basis. So can you help us understand, which segments reported or witnessed the sharp drop in the overall volume?
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[Operator Instructions] The next question is from the line of Aditya Pal from MSA Capital Partners.
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[Operator Instructions] The next question is from the line of Farokh Pandole from Avestha Fund Management LLP.
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Volume -- why you expect voluem to pick up in the second half for the Pipe business. And eventually, we are looking at 6% to 7% growth with better mix over this year -- over last year. But the -- as you have explained, first half margin and second quarter margin was extremely low. So what are the reasons that we are expecting improvement in margin for second half so that we'll be over INR 5,000 per ton.
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Okay. [Foreign Language] overall EBITDA for this year, we are looking at INR 590 crores for the whole company. And the cash level is INR 130 crores currently.
INR 136 crores, yes.
Net cash level.
Yes, yes, yes.
[Foreign Language] In terms of order book, your order book [Foreign Language], are we seeing -- forget what is already in the order book? Are we also seeing in October and November an improved sort of conversation with respect to inquiry for better outlook of volume. So that risk of 6% to 7% of volume for the whole year [Foreign Language].
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[Foreign Language] what is the INR 400 crores further will be spent equally over the next 2 years?
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[Operator Instructions] The next question is from the line of Keshav Garg from Counter Cyclical PMS.
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[Foreign Language] So sir, taking both these factors together, [Foreign Language] due to overcapacity and due to low growth in the economics?
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[Foreign Language] That was very reassuring. [Foreign Language]. Sir, my understanding is [Foreign Language] are we just trading, or [Foreign Language]?
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The next question is from the line of Ashwin Kedia from Alchemy.
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The next question is from the line of Chintan Patel from Abans Investment Managers.
[Foreign Language] volume, more than 10 lakh tons volume and INR 700 crores plus EBITDA in steel division by FY '26. So still, we are on that guidance or there is some revision?
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[Foreign Language] for FY '25. I'm talking about for FY '26.
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Okay. And EBITDA per ton, sir?
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So the incremental...
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Okay. Understood. [Foreign Language]
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The next question is from the line of Devang from Eagle View Ventures.
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As there are no further questions from the participants, I now hand the conference over to Mr. B. B. Singal for closing comments.
Thank you, everyone, for joining us today on this earnings call. We appreciate your interest in Surya Roshni Limited. I sincerely once again thank you to our MD and CEO for sharing their valuable time and addressing queries raised by participants who attended the call. For any further queries, if any, contact our Investor Relations adviser, SGA. Thank you.
Thank you. On behalf of Surya Roshni Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.