Surya Roshni Ltd
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Surya Roshni Ltd
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Ladies and gentlemen, good day, and welcome to Surya Roshni Limited Q4 FY '24 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. [Operator Instructions] These statements are not guarantees of future performance and involve risks and uncertainties after the difficult to predict. [Operator Instructions] Please note that this conference is being 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. Am I audible?
Yes, sir. Please go ahead.
Thank you. So good afternoon, namaskar. On behalf of Surya Roshni Limited, I extend a very warm welcome to everyone for joining us today. On this call, we are joined by Mr. Naresh Singhal, Executive Director, Steel Operations; Mr. Gaurav Jain, COO, Steel Operations; Mr. Jitendra Agrawal, CEO, Lighting and Consumer Durables; our CFO and Company Secretary, Mr. B. B. Singal and SGA, our Investor Adviser. And I hope everyone had an opportunity to go through the financial results, which was published yesterday.
Moving on to the overall financial performance highlights. The company's performance in FY '24 has been commendable considering few challenges we faced in both our Steel and Lighting division verticals. Our strategic focus on efficiency and cost optimization allow us to make substantial progress. We have a strong conviction that the -- very little few challenges currently faced by both the business vertical were only temporary and we are anticipating a period of consistent growth in both the business segment going forward. And the EBITDA for FY '24 stood at INR 586 crores, demonstrating good operational performance. The little dip in our operational -- operating margin were primarily due to challenges in the steel pipe business, mostly on account of price fall, and which was offset with improved margins in our Lighting and Consumer Durables segment.
Our proactive measures in capacity utilization, working capital optimization and cost rationalization has been vital in supporting our financial performance. These efforts reflect in our steady pace, which stood at INR 330 crores, closely aligned with the last year's performance.
We achieved a major milestone by becoming a 0 debt company, having successfully reduced our debt by INR 400 crores in this FY '24-'25, reduced. So our commitment to financial prudence alongside our operational strategies has helped maintaining a healthy cash surplus of about INR 65 crores.
We have declared a final dividend of INR 2.5 per share, demonstrating our ongoing commitment to delivering shareholders' value. This is in addition to the interim dividend of INR 2.5 per share already, which was disbursed.
Now coming to Lighting and Consumer Durable, despite facing substantial price erosion in Consumer and Lighting business, our annual revenue recorded a growth of nearly about 2% and now stand at INR 1,572 crores in FY '24. EBITDA growth for Q4 FY '24 and FY '24 was up by 5% and 23% to INR 45 crores and INR 150 crores, respectively, as compared to the same period last year.
EBITDA margin for Q4 FY '24 and full year '24 stood at 10.66% and 9.57%, respectively, as against 9.84% and 7.92% in Q4 FY '23 and FY -- full year '23. Significant growth in sales volume along with a favorable product mix towards higher margin products and cost saving from backward integration contributed to a robust operating profit.
Infrastructure and industrial projects have driven our professional lighting segment to high-digit growth in the Q4 FY '24 and over 20% in FY '24. The vertical of LED segment like LED Batten and Downlighter have also witnessed healthy growth in FY '24. In the financial year 2024, the fan business is experienced significant growth in mid-teens range, while the appliances segment also witnessed a robust growth of about 20%.
With our strong foundation and strategic market expansion initiatives along with ongoing investment in technology and product development, we are well positioned to capitalize on this opportunity and ensuring continued growth.
Now moving to the steel pipe and strip business. In the fourth quarter of FY '24, the steel pipe segment achieved its higher ever quarterly volume of 2.36 lakh tonnes. It experienced a volume growth of 6% in FY '24, 4% in Q4 FY '24 despite a temporary slowdown in the B2B business, mainly due to the General Elections.
Export also experienced a healthy volume growth of about more than 12% in FY '24. Despite a notable decrease in steel prices during Q4 FY '24, the overall sales revenue experienced only a minor decline. We have successfully navigated the challenges both by declining steel prices and other factors that has impacted the industry at large. Our focus on value-added products, which made up 45% of our total sales, also played a crucial role in sustaining our revenue streams.
Despite the industry headwinds, our revenue remained resilient, experienced only a minor decline in closing the quarter at INR 1,665 crores. This resilience is a testament to our diversified product mix and our strategic market positioning, which includes significant contribution from both the API pipe and our robust export operations.
Our -- even our galvanized pipe also witnesses a healthy domestic demand in the Q4 FY '24. Export constitutes about 18% sales of our total in FY '24. Additionally, our focus on value-added products, which already have said, which made up almost 45% of our total sales, played a crucial role in sustaining our revenue.
The EBITDA per tonne for Q4 FY '24 was INR 5,877 as compared to INR 6,156 in Q3 FY '24 and INR 9,868 per tonne in Q4 of FY '23. For FY '24, EBITDA per tonne stood at INR 5,401 as compared to INR 6,496 in last fiscal year. This decrease can be largely attributed to the decreased sales of some mainly API spiral pipe business, and the other part was mainly in loss of inventory in the Q4 of FY '24.
We have a strong order book of about INR 800 crores as on 31st March of 2024, of which includes the Oil and Gas sector and export business. And we are currently in the process of expanding our operational capacity in order to meet the expected increase in market demand.
Our goal is to increase our monthly production capacity by almost 15,000 tonnes per month. And by the end of June 24, our 8-inch pipe capacity, additional will be operating at -- will commence operational at Bahadurgarh plant. Roughly 50,000 tonnes per year would be the capacity and spiral plant with an annual capacity of about 60,000 tonnes is scheduled to be commissioned at our Gwalior location in the same year by the end of almost Q2 FY '25.
This plant will be mainly used for the upcoming water projects. We will have a net increase capacity of about 36,000 tonnes per annum after our new cold rolling pipe facility at Bahadurgarh become operational in the Q3 of FY '25. The steel market is showing a sign of improvement, as the steel price has begun slightly rise or you can say stable since mid of April.
And this will revise demand across our product categories, and we are optimistic about continued growth in our steel pipe segment, given the government highlighting emphases on the infrastructure development. For FY '25, we are projecting a total volume growth of about 15% in our steel pipe business. This growth will be supported by our strategic expansion and our ongoing commitment to delivering higher-quality innovating products.
And this was from my part. now I will request our CFO, Mr. B. B. Singal to share his thoughts on the other financial parts.
Thank you, respected MD, sir, and a very good afternoon to all the participants on the call. For the quarter, the revenue was INR 2,080 crores as compared to INR 2,151 crores. Q1 FY '24 EBITDA and PAT stood at INR 173 crores and INR 104 crores as compared to INR 254 crores and INR 156 crores, respectively, for the same period last year.
For FY '24, the revenue was INR 7,809 crores as compared to INR 7,997 crores. EBITDA stood at INR 586 crores as compared to INR 620 crores in FY '23, and PAT stood at INR 329 crores as compared to INR 336 crores. In the -- for the Lighting and Consumer Durables, for this quarter, the revenue stood at INR 418 crores as against INR 431 crores. EBITDA and PBT stood at INR 45 crores and INR 36 crores, registering a growth of 5% each.
For the full year, the revenue stood at INR 1,572 crores as against INR 1,545 crore, a growth of 2% year-on-year basis. EBITDA and PBT stood at INR 150 crores and INR 120 crores, a growth of 23% and 32%, respectively. The increase in operating performance in this segment can be attributed to the PLI scheme, backward integration and the increased demand for value-added products. For the steel pipe and strip segment during Q4 for FY '24, the revenue was INR 1,665 crores as compared to INR 1,721 crores. Similarly, EBITDA per metric tonne stood at INR 5,877 as compared to 6,156 in Q3 financial year '24 and INR 9,868 in Q4 of FY '23. PBT stood at INR 103 crores as against INR 181 crores last year.
For FY '24, the revenue stood at INR 6,242 crores as compared to INR 6,452 crores. Similarly, EBITDA per metric tonne stood at INR 5,401 compared to INR 6,496 year-on-year basis. While EBITDA and PBT stood at INR 436 crores and INR 325 crores, respectively. Improved capacity utilization, working capital optimization and cost relation enabled us to become a debt-free company, as we repaid our total debt of INR 400 crores in financial year '24.
As on 31st March '24, ROCE stood at 21.14% and ROE stood at 16.33%. As on 31st March '24, the net working capital days stood at 59 days, inventory days stood at 48 days, debtor days stood at 31 days and creditor days stood at 20 days. With this, I conclude our presentation, and we can now open the floor for further questions and answers.
[Operator Instructions] The first question is from the line of [ Jatin Damani from Swan Investments ].
So first of all, congrats on achieving the 0 debt and increasing the payout. Sir, in your initial remarks, you indicated that the decline in the EBITDA per tonne in the steel pipe is largely attributed to a lower volume of API sales. So can you help us understand what was the overall contribution of the API sales in Q4 vis-a-vis the last quarter, Q3?
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Sir, the other question is basically broader on the industry. Now when we compare our numbers with the one of our largest competitor or the largest player in the industry. So if you look on the raw material front, we are quite competitive as compared to what they are. But when we come to our employees and the other expenses, we are probably at the lower end in terms of the efficiencies. So what are the steps as a company we are taking to improve that efficiencies when we compare it to a larger player in the industry?
Good. Thank you. [Foreign Language]
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[Operator Instructions] The next question is from the line of Shweta Dikshit from Systematix Group.
Yes. Sir, two questions from my side. [Foreign Language] This was a decline last quarter also. [Foreign Language] What can we see -- how can we see this segment moving forward? This is the first question. [Foreign Language]
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The management line got disconnected, stay tuned till we connect the management line.
The management line has been connected. Yes, sir, go ahead.
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Yes, sir.
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[Foreign Language] this quarter, I mean 1Q, what will be your expectation in terms of EBITDA per tonne since steel price [Foreign Language] but is this sustainable at this level?
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The next question is from the line of Dishant Rakesh Jain from Quasar Capital.
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[Operator Instructions] The next question is from the line of Vikash Singh from PhillipCapital.
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The next question is from the line of Amey from Banyan Capital.
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Okay. Okay. And sir, just one more question. Sir, what is...
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Sir, can you repeat please?
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Okay. Got it. And sir, just one more question. Sir, what's the update on the demerger of consumer durable business?
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[Operator Instructions] The next question is from the line of Nitesh Dutt from Burman Capital.
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So good question. [Foreign Language]
The next question is from the line of Kaushik Dani from Abans Group.
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Okay. [Foreign Language]
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The next question is from the line of Miraj from Arihant Capital.
Most of my questions have been answered. [Foreign Language]
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Due to time constraint, that would be the last question for the day. I now hand the conference over to Mr. B. B. Singal for closing comments. Over to you, sir.
Thank you, everyone, for joining us today on this earnings call. We appreciate your interest in Surya Roshni Limited. I sincerely once again...
Management line got disconnected, please stay connected till we connect the management line.
Management line has been connected.
Thank you, everyone, for joining us today on this earnings call. We appreciate your interest in Surya Roshni Limited. I sincerely once again thank our Managing Director, Executive Director and the CEO for sparing their valuable time and addressing queries raised by participants who attended the call. For any further queries, contract SGA, our investor relation adviser. Thanks once again.
Thank you. On behalf of Surya Roshni Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.