With an all-time high of 2,956%, this stock fixes record date for dividend
Premium- Surya Roshni Ltd is an industrial-focused small cap company with a market cap of ₹2,063.19 crore.
Surya Roshni Ltd is an industrial-focused small cap company with a market cap of ₹2,063.19 crore. One of India's major manufacturers of steel pipes and lighting, the corporation. In India and around the world, Surya is one of the most renowned and trusted brands for PVC pipes, lighting, and consumer durables (FMEG). For the fiscal year 2021–2022, the Board recommended a dividend of Rs. 4.00 per equity share (or 40% on the paid–up equity share capital), for which the record date has been made public.
On 19th May, the company said in a regulatory filing that “In accordance with the Regulation 30 read with Part A of Schedule Ill and Regulation 43 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, it is further notified that the Board recommended a dividend of Rs. 4.00 per equity shares (i.e. 40% on the paid up equity share capital) for the financial year 2021-22 subject to the approval of the shareholders at the ensuing Annual General Meeting (AGM) of the Company."
On 13th August, the company said in a regulatory filing that “In terms of Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors of the Company in their meeting held today i.e. 13th August, 2022, interalia, has approved the following: Fixed Friday, 2nd September, 2022 as the Record Date for the purpose of determining entitlement of the Members for payment of Dividend for the Financial Year 2021-22 and Forty Ninth (49th ) Annual General Meeting (AGM) of the members of the Company will be held on Wednesday, 2 st September, 2022 at 12.00 Noon."
The firm generated revenue of Rs. 1,840 in Q1FY23 as opposed to Rs. 1,453 Cr. in Q1FY22, representing a YoY rise of 27%. EBITDA decreased by 24% year over year to ₹71 Cr in Q1FY23 from ₹93 Cr in Q1FY22. The firm generated a profit after tax (PAT) of ₹22 Cr in Q1FY23 as opposed to ₹37 Cr in Q1FY22, which represents a YoY decline of 41%.
Commenting on the results, Company’s Managing Director, Mr. Raju Bista, said “The company posted a resilient set of numbers with top-line grew by 27%, amid numerous headwinds such as steep correction in commodity prices, constant depreciation in the domestic currency and sustained inflationary pressure, the performance on account of our healthy product mix driven by growing share of value-added products across Lighting and Consumer Durables and Steel pipes reflect our operational excellence. The company’s resilience to external challenges underlines the company’s brand equity, strong financial position and ability to deliver superior products across businesses."
“In Lighting and Consumer Durables, the company continued to witness traction in new age lighting solutions with LED battens and LED down-lighters growing at 39% and 199%, respectively. LED lighting as a whole grew by 79% YoY during the quarter. The company has continued to strategically launch products in lighting and consumer durables as per the trends in the market. The company has undertaken price hikes in the past few quarters to mitigate the impact of rising input costs. Benefit of cost moderation will accrue in near future. The company is closely monitoring the global and domestic events and remains well placed to weather the risks that may arise," said Mr. Raju Bista.
“Initiatives under PLI scheme will improve in house production of components for LED lighting which will lower our dependency on outsourcing and improve costs. The replacement cost now stands at 6.7%, a significant reduction on QoQ basis. The company has enhanced the focus on dealers relationship, new products introductions and BTL activities to further improve the brand equity. The company’s R&D is focusing on reduction in replacement costs and be the first mover in smart and innovative lighting solutions. The company’s marketing team has been successful in improving the presence and market share in Metro and Tier-1 cities along with deepening the existing strong presence in the rural markets. The fans segment witnessed a healthy demand growth during the quarter, driven by a severe heatwave situation across the country. The company will also continue to focus on participating in multiple Smart Lighting projects in Professional Lighting," Mr. Raju Bista further added.
“In the Steel Pipes and Strips, the company’s performance in terms of realizations and profitability was affected as there was inventory rationalization by the dealers and distributors on account of a steep correction in global commodity prices. Although this has affected financial performance in the short term, we firmly believe that the long-term prospects for our Steel and Strips business remain intact, considering the enquiries generation, strong traction in the orderbook and growing share of new-age, value-added products and exports. This, coupled with the recently inaugurated large-dia DFT manufacturing facility is expected to enhance the margin profile going forward. The company will continue to invest in R&D, promotional activities and product launches along with working capital optimization and debt reduction to further create a value for the shareholders," said Mr. Raju Bista.
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Mr. Vinay Surya – Managing Director said, “We are happy with the operational and financial performance of the company for Q1FY23 in the current scenario. Although there was an impact on the profitability mainly due to various ongoing macroeconomic challenges, the company’s strong footing in the market and leadership position across lighting and steel pipes products allowed the company to rationalize the fixed costs and supply chain in order to defend the margins."
Vinay Surya further added that “The Company has created a strong dealer and distributor network for Steel Pipes as well as Consumer Lighting across the country over the last four decades, especially into tier II , tier III and rural areas. The quality of the entire product range is at par with all the leading national and international specifications. The company’s brands are well trusted by the customers, driven by the company’s constant pursuit for excellence, the highest standards of quality and through the adoption of the latest technology. The company’s prompt aftersales service has further enhanced the customer delight and satisfaction. The company also enjoys cordial relationships with all the stakeholders such as various government authorities, suppliers, customers, employees, bankers, etc. The company has recently augmented the emphasis on various ESG initiatives. We firmly believe that this will create a long-term value for our shareholders."
Commenting on the financial performance, Mr. Bharat Bhushan Singal – CFO said, “For the quarter, Revenue grew by 27% to ₹ 1,840 crore from ₹ 1,453 crore, while EBITDA and PAT stood at ₹ 71 crore and ₹ 22 crore respectively on YoY basis from ₹ 93 crore, ₹ 37 crore respectively. In Lighting & Consumer Durables, for the quarter, the Revenue, EBITDA and PBT grew by 56%, 33% and 76% respectively on YOY basis to ₹ 335 crore, ₹ 22 crore and ₹ 14 crore respectively. In the Steel Pipes and Strips, during Q1FY23, the company witnessed revenue growth of 21% YoY. However, EBITDA/MT stood at ₹ 3,103 in Q1FY23."
Mr. Bharat Bhushan Singal further added that “The relentless focus on working capital optimization led to continuous reduction of working capital cycle on YOY basis to 57 days in Q1 FY23 (from 73 days in Q1 FY22) for the company, Lighting Consumer Durables to 71 days in Q1 FY23 (from 113 days as of Q1 FY22) and in Steel Pipes Strips to 54 days in Q1 FY23 (from 66 days as of Q1 FY22). The steady revenue growth, lower debt, Working Capital optimization, cost rationalization and focus on debt reduction has led to improvement in Ratios, Debt Equity Ratio further improves to 0.30 as compared to 0.37 in FY22."
The shares of Surya Roshni Ltd closed on Friday at ₹382.00 apiece, up by 3.37% from the previous close. The stock price has risen from ₹12.50 as of 1st January 1999 to the current price level which indicates an all-time high of 2,956.00%. On a YTD basis, the stock has fallen 26.22% so far in 2022.
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