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SMR
06-02-2015, 10:55 PM
Surya Roshni Limited is a holding Company. The Company’s core business consists of lighting and steel tube products. The Company has presence in over 54 countries. The Company product lineup includes tube lights, Compact fluorescent lamps, light emitting diode (LED) lamps, metal halide lamps, street lighting, high bay lighting, flooding lighting, landscape lighting and high mast. It operates in three segments: steel, lighting and fan. Steel segment is engaged in the production of steel tubes and pipes and cold rolled strips. Lighting segment is engaged mainly in the manufacture of different varieties of lamps and related products. The fan segment includes the electrical fans marketed under SURYA brand name. The Company has set up a Spiral Welded Pipe manufacturing plant in Gujarat.

Official website: www.surya.co.in

SMR
06-02-2015, 10:57 PM
Surya Roshni’s 4QFY2015 numbers have come in broadly in line with our estimates. The top-line for the quarter improved by 1.0% yoy to Rs785cr. The Steel business reported a 17.3% yoy decline in revenues to Rs507cr (gross revenue) and the Lighting business posted a robust growth of 53.9% yoy to Rs336cr (gross revenue). The EBITDA margin for the quarter contracted by 112bp yoy to 6.8%, mainly due to higher other expenses. Interest expense for the quarter declined by 35.9% yoy to Rs24cr while depreciation and other income remained flat on a yoy basis. Consequently, the net profit increased by 61.7% yoy to Rs16cr, vis-à-vis our expectation of Rs11cr. Structural shift in the Lighting industry presents new growth opportunity: The Lighting business is primed for a good performance owing to the structural shift in the industry towards LED (Light Emitting Diodes) lights. Citing cost efficient nature of LEDs, Electric Lamp and Components Manufacturers Association (ELCOMA) projects the share of LEDs in the Lighting industry to increase substantially. Major initiatives like changing all street lights and lights in public spaces to LED lights, by the government, are expected to fuel growth of LEDs. As a result, the lighting industry is expected to grow at a CAGR of 22.8% over FY2014-17E to Rs25,000cr and reach the Rs37,000cr mark by FY2021. This bodes well for the Lighting division of the company which is likely to contribute more significantly to the overall top-line, mainly due to the company’s vast retail presence. Exploring newer avenues: Thanks to its strong network of retailers, the Fan business (which was launched in January 2014) has received a good response in a relatively shorter period of time; clocking revenues of ~Rs60cr in FY2015. Encouraged by the good response, the company has entered the Home Appliances business and will also be venturing into the business of providing solar based lighting systems for rural and urban use. Leveraging upon its strong network, we expect the company to successfully scale up its new ventures. Outlook and Valuation: With higher contribution from the Lighting business and entry into newer businesses, we expect the company to post a CAGR of 6.2% in the top-line over FY2015E-17E to Rs3,223cr. Owing to better margin profile of the Lighting business, the EBITDA margins are estimated to improve from 7.8% in FY2015E to 8.7% in FY2017. Consequently, the net profit is expected to post a CAGR of 25.0% over FY2015E-17 to Rs84cr. At the current market price, the stock is trading at 6.4x its FY2017E earnings. We reiterate our Buy rating on the company and have revised the target price to Rs152 based on SOTP valuation.

Source: http://www.angelbroking.com

SMR
08-17-2015, 03:12 PM
Surya Roshni’s top-line for 1QFY2016 improved by 8.8% yoy to Rs731cr, which is slightly higher than our estimate of Rs712cr. The Lighting business posted a robust growth of 22.4% on a yoy basis to Rs318cr while the Steel business reported flat revenues for the quarter, ie of Rs466cr, at the gross level. The EBITDA margin contracted by 65bp yoy to 7.6%. The interest expense for the quarter declined by 14.3% yoy to Rs25cr, while the depreciation expense rose 9.2% yoy to Rs15cr. Other income remained flat on a yoy basis. Consequently, the net profit increased by 5.3% yoy for the quarter to `12cr (vis-à-vis our expectation of Rs15cr). Structural shift in the Lighting industry presents new growth opportunity: The company’s Lighting business is primed for a good performance owing to the structural shift in the industry towards LED (Light Emitting Diodes) lights. Citing cost efficient nature of LEDs, the Electric Lamp and Components Manufacturers Association (ELCOMA) projects the share of LEDs to increase substantially, going forward. Major government initiatives like changing all street and public space lights to LED lights, are expected to fuel growth of LEDs. As a result, the lighting industry is expected to grow at a CAGR of 22.8% over FY2014-17E to Rs25,000cr and reach the Rs37,000cr mark by FY2021. This bodes well for the Lighting division which is likely to contribute more significantly to the overall top-line, mainly due to the company’s vast retail presence. Exploring newer avenues: Thanks to its strong network of retailers, the Fan business (which was launched in January 2014) has received a good response in a relatively shorter period of time. Encouraged by the good response, the company has entered the Home Appliances business and will also be venturing into the business of providing solar based lighting systems for rural and urban use. Leveraging upon its strong network, we expect the company to successfully scale up its new ventures. Outlook and Valuation: With higher contribution from the Lighting business and entry into newer businesses, we expect the company to post a CAGR of 6.2% in the top-line over FY2015E-17E to Rs3,223cr. The EBITDA margin is estimated to improve from 7.8% in FY2015 to 8.5% in FY2017. Consequently, the net profit is expected to post a CAGR of 21.6% over FY2015E-17 to Rs80cr. At the current market price, the stock is trading at 7.6x its FY2017E earnings. We maintain our Buy rating on the company and revise our target price to Rs183, based on a target PE of 10.0x for FY2017E.

Source: http://www.angelbroking.com/