Metrics cut 1
- Steel FY27 EBITDA/ton guidance cut to ₹4,600-4,700 per ton (from ₹4,700-4,800 per ton per Q&A)
Event Participants
Executives
5 Raju Bista (MD), Bharat Bhushan Singal (CFO & CS), Gaurav Jain (CEO, Steel), Vasumitra Pandey (CEO, Lighting & Consumer Durables), Naresh Singhal (Executive Director, Steel)
Analysts
7 Kiran Dhanwada (TableTree Capital), Love Gupta (Counter Cyclical Investments), Pranav Tendolkar (Rare Enterprises), Raj Mehta (Raj Mehta FMG), Resham Jain (VVD Asset Managers), Saket Kapoor (Kapoor Co), Viraj Mehta (Enigma Investment Partners), Shantanu Basu (Smith Limited)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Consolidated Revenue | ₹2,046 crore | +28% YoY (₹1,605 crore in Q1 FY26), driven by strong growth in both Steel (+32%) and Lighting (+15%) segments |
| EBITDA | ₹128 crore | +46% YoY (₹83 crore in Q1 FY26), margin expansion from improved steel EBITDA/ton and operational leverage |
| PAT | ₹60 crore | +77% YoY (₹34 crore in Q1 FY26), fastest growing line item due to operating leverage and zero-debt capital structure |
| Lighting Revenue | ₹456 crore | +15% YoY; strongest ever Q1 for the segment, broad-based growth led by LED bulbs, battens, downlighters, appliances, professional lighting |
| Lighting EBITDA | ₹36 crore | +17% YoY, margin at 7.9%; minimal profitability impact despite ~7% input cost increase passed on to customers |
| Steel Revenue | ₹1,590 crore | +32% YoY, volume growth of +21% YoY to 2.28 lakh tons, the highest-ever Q1 sales volume |
| Steel EBITDA/ton | ₹4,006 | +37% YoY (₹2,922 in Q1 FY26), driven by higher value-added mix (47% of volumes) and improved scale |
| Steel Volume | 2.28 lakh tons | +21% YoY, highest-ever Q1 volume; capacity utilization at ~82% |
| Net Cash Surplus | ₹155 crore | Zero-debt company as of June 30, 2026, up from net debt position; aided by working capital optimization |
| Net Working Capital Cycle | 72 days | Improved working capital management contributed to deleveraging and cash surplus |
| ROCE | 12.69% | Improved capacity utilization and cost rationalization driving capital efficiency |
| ROE | 8.95% | Reflects improved profitability on equity base |
Geographic & Segment Commentary
Steel Pipes & Strips: Strongest quarter start with revenues at ₹1,590 crore (+32% YoY) and volume of 2.28 lakh tons (+21% YoY). Growth led by section pipes, ERW API pipes, and a sharp rise in exports following US market opening. Galvanized pipes remained soft due to delayed government fund releases. Value-added products contributed 47% of volumes; exports accounted for 20% of segment volumes. Order book stands at ₹800 crore including 78,000 tons of export API orders for the US.
Lighting & Consumer Durables: Strongest-ever Q1 with revenues of ₹456 crore (+15% YoY). Growth was broad-based across LED modes (bulb, batten, downlighter), appliances, and professional lighting. Professional Lighting order book at ₹150 crore provides near-term execution visibility. Input cost increase of ~7% passed on with minimal margin impact, as EBITDA margin improved to 7.9%.
Wires & Cables (subsidiary): New business vertical achieving scale rapidly — reached close to FY26 sales volume within Q1 FY27 alone. Direct Benefit Transfer Electrician loyalty program driving adoption with 36,000 enrollments. FY26 revenue target of ₹250 crore on track with three-year guidance of ₹500 crore.
Company-Specific & Strategic Commentary
Capacity Expansion (Steel): Three new DFT mills being commissioned across Gujarat, Malanpur, and Bahadurgarh plants between August and December 2026. Company committed to adding 2-3 lakh tons of capacity annually, targeting ~16 lakh tons in FY26 and ~2 million tons by FY28-29. South India expansion at Hindupur expected operational by January 2027 with ₹60 crore investment.
US Market Opportunity: US market opening is a structural growth driver — expected to contribute 120,000-125,000 tons in FY27 (~10-11% of steel volumes). Export order book includes 78,000 tons of API ERW pipes for US. Total export contribution expected to rise from 17% in FY26 to 20% in FY27, progressing toward 25% of steel business.
Cost Optimization (Steel): Automation, energy efficiency, and plant replacement initiatives targeting per-ton cost reduction of ~₹1,100. This cost program is critical to achieving FY27 EBITDA/ton guidance of ₹4,600-₹4,700.
Brand & Distribution (Lighting): Continued investment in brand building and deeper distribution penetration, with festive season expected to drive stronger H2 performance. Wire business leveraging DBT Electrician loyalty program with 36,000 enrollments to accelerate distribution.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Steel Volume (FY27) | Quarterly trajectory: Q2 ~2.6 lakh tons, Q3 2.8-2.9 lakh tons, Q4 3.2 lakh tons | Volume growth from new capacity ramping and export expansion; management confident in achieving full-year guidance of ~1.28 lakh tons per month run-rate |
| Steel EBITDA/ton (FY27) | ₹4,600-₹4,700 per ton | Management "fully committed" to achieving despite Q1 at ₹4,006; supported by value-added mix improvement and cost reduction program |
| Full-Year EBITDA (FY27) | ~₹680 crore | Implied from Q2 target of ₹150-160 crore and stronger H2 trajectory; commentary in Q&A |
| Lighting Growth (FY27) | 22-23% value growth, ~25% volume growth | On track; festive season to drive stronger next three quarters |
| Export Mix (Steel) | 20% in FY27, progressing toward 25% | Up from 17% in FY26; US market to contribute 120-125k tons (~10-11% of volumes) |
| Capacity (Steel) | ~16 lakh tons by FY26, ~2 million tons by FY28-29 | Annual additions of 2-3 lakh tons through new DFT mills and expansions |
Risks & Constraints
| Risk | Context |
|---|---|
| Ocean Freight & Tariff Volatility | Freight cost increases and tariff differentials across export markets impacted Q1 EBITDA/ton; management indicated they are absorbing impacts and finding alternative methods, with orders repriced to account for tariffs |
| Delayed Government Fund Releases | Galvanized pipe demand remains soft due to continued delays in government fund releases; this is constraining domestic volume growth in a key product category |
| Geopolitical Uncertainty | Middle East situation remains fluid; management cites global geopolitical uncertainty as a reason for delaying decisions on demerger and buyback, preferring to wait for "appropriate time" and "macro situation" |
| Working Capital Requirements | Management noted working capital needs as a factor in timing of capital allocation decisions (buyback); net working capital cycle at 72 days remains a watch item |
| Execution Risk on Capacity | Addition of 2-3 lakh tons annually through FY28-29 requires timely commissioning of new mills across multiple plants (Gujarat, Malanpur, Bahadurgarh, Hindupur) |
Q&A Highlights
Steel EBITDA/ton Trajectory
- Question: Q1 EBITDA/ton is ₹4,006 versus guidance of ₹4,700-4,800; what gives confidence in achieving full-year guidance considering Middle East freight issues? (Viraj Mehta, Enigma)
- Answer: Management remains "fully confident" in achieving FY27 EBITDA/ton guidance despite Q1 challenges. Q2 EBITDA target is ₹150-160 crore, with full-year EBITDA of approximately ₹680 crore. (Raju Bista)
Order Book Decline & Export Mix
- Question: Order book declined from ₹1,000 crore in March to ₹800 crore; is it because exports now have higher proportion, given 78,000 tons for US? (Kiran Dhanwada, TableTree)
- Answer: The ₹800 crore order book has 75-80% from exports (US, Middle East). Higher-margin export orders, particularly API ERW pipes for the US, will sustain improved EBITDA per ton. Export contribution will rise to 25% of steel business gradually. (Raju Bista)
US Export Volume Outlook
- Question: Will US market volume of ~10,000 tons/month continue through FY27? What's total export volume target? (Pranav Tendolkar, Rare Enterprises)
- Answer: US will contribute 120,000-125,000 tons in FY27 (~10-11% of steel volumes). Total export volume expected around 3 lakh tons for the year. (Raju Bista)
Demerger & Buyback Timing
- Question: Why delay demerger and buyback when two businesses have completely different cycles and regulatory-wise there is no barrier? (Pranav Tendolkar, Rare Enterprises; Love Gupta, Counter Cyclical)
- Answer: Management is evaluating but prefers to wait for appropriate time given global geopolitical situation and uncertainty. Working capital considerations also factor into buyback timing. Decisions will be announced "very soon" at the appropriate time. (Raju Bista)
API & Spiral Pipe EBITDA Decline
- Question: API/spiral EBITDA/ton dropped to ₹5,600 in FY25-26 from ₹9,136 in FY22; what was the reason and how will it improve? (Shantanu Basu, Smith Limited)
- Answer: Q1 FY27 API/spiral EBITDA/ton was ₹3,420. Management attributed the decline to Middle East market conditions and tariff structure. Repricing of orders has been done to take care of tariff impacts in future quarters. (Raju Bista)
Quarterly Volume Trajectory
- Question: What is the volume outlook for the coming quarters given spillovers from Q1 and Q2? (Viraj Mehta, Enigma)
- Answer: Minimum 2.6 lakh tons in Q2, with Q3 at 2.8-2.9 lakh tons and Q4 at 3.2 lakh tons. This reflects commissioning of new DFT mills and export growth. (Raju Bista)
Competitive Positioning & Capacity Expansion
- Question: With 75-80% of business fixed and steel price volatility, how do you view competitive positioning, value-added mix at 47%, and future capacity expansion? (Raj Mehta, Raj Mehta FMG)
- Answer: Strategy rests on capacity expansion, deepening value-added product mix (targeting 50%), and structural cost reduction. Growth target is 20-25% CAGR through capacity additions without ceding pricing discipline to competitors. (Raju Bista)
Key Takeaway
Surya Roshni delivered a strong start to FY27 with consolidated revenue of ₹2,046 crore (+28% YoY), EBITDA of ₹128 crore (+46%), and PAT of ₹60 crore (+77%), while maintaining zero-net-debt status with ₹155 crore cash surplus. The steel segment led growth with record Q1 volumes of 2.28 lakh tons and EBITDA/ton expansion to ₹4,006, driven by US market entry (120-125k tons expected in FY27), higher value-added mix at 47%, and a 78,000-ton export API order book. Lighting delivered its strongest-ever Q1 at ₹456 crore (+15%), with the professional lighting order book at ₹150 crore and FY27 guidance of 22-23% value growth on track. Management committed to FY27 steel EBITDA/ton of ₹4,600-4,700, supported by quarterly volume trajectory reaching 3.2 lakh tons in Q4, capex-driven capacity additions of 2-3 lakh tons annually toward 2 million tons by FY28-29, and a ₹1,100/ton cost reduction program. Key watch items include ocean freight and tariff volatility in export markets, delayed government fund releases impacting GI pipe demand, and pending decisions on demerger and buyback, which management is deferring pending macro clarity.