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IDBI Capital Report
Surya Roshni Ltd.'s Q3 FY26 performance was below expectations. Revenue grew 3% YoY to Rs 1,920 crore, driven by a 2% YoY increase in steel pipes revenue, while LCD segment grew by 6% YoY to Rs 470 crore.
Consolidated Ebitda margin contracted 49 basis points YoY to 7.5%, owing to higher employee costs. Ebitda/tonne for steel pipes decreased by 7% YoY to Rs 4,810/tonne, due to decline in high margin API and 3 LPE pipe segments, and an inventory loss of Rs 500/t.
Management has further lowered its FY26 volume guidance for the steel pipe segment to 0.93-0.94 million tonnes vs 1.1 mt guidance at the start of the fiscal year.
The brokerage cuts FY26E/FY27E Ebitda estimates by 10%/18%, respectively and rolls over to FY28E estimate. Accordingly maintains Hold rating with target price of Rs 268 based on SoTP.
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