Surya Roshni surges 14% on healthy business outlook

As the company's major sales comes from rural, semi urban & exports; Going forward, the management expects home appliances and pipe segments to perform well back by various government initiatives.

Shares of Surya Roshni surged 14 per cent to Rs 433.35 on the BSE in Friday’s intra-day trade on the back of heavy volumes. The buying at the counter is attributed to the healthy business outlook for pipes and home appliances segment.

At 09:54 am, the stock traded 12 per cent higher at Rs 426.35, as compared to 0.77 per cent rise in the S&P BSE Sensex. The average trading volumes on the counter more-than-doubled with a combined around 810,000 equity shares changing hands on the NSE and BSE.

However, in the past one year, Surya Roshni has underperformed the market, by falling 15 per cent, due to disappointing operational performance on account of rising input cost. In comparison, the benchmark Sensex was up 6 per cent. The stock had hit a record high of Rs 868 on October 4, 2021 and it touched a 52-week low of Rs 336 on August 16, 2022.

With strong emphasis of Government on 'Aatma Nirbhar Bharat Abhiyaan' and 'Vocal for Local' and PLI Scheme for LED lighting products / components, higher demand from agriculture, manufacturing, exports and from rural India is expected in future.

As company’s major sale comes from rural, semi urban & exports and therefore, going forward, both the segments of the company shall be performing well. With both short term and long term strategies in place, the Company aligned its resources to the needs of the industry and customers to achieve its future goals, Surya Roshni said in the FY22 annual report.

During the year, the Company shall become larger and stronger with its continuous cost reduction, overhead rationalization, value added products and creating demand for different applications of its products, it said.

Surya Roshni have seen favourable demand outlook for PVC due to the Government initiatives such as Housing for All, ‘Nal se Jal’, Project AMRUT and Swachh Bharat Mission. The demand outlook for non-agricultural pipes appears to be good, as the major urban real estate markets show signs of a sustained recovery. The sector is expected to see an average annual growth of 10 per cent, the company said.

The business is expected to maintain a positive momentum in exports of its value-added products like API Pipes, across geographies like Middle East, Europe and Australia which are hardly unfazed by major geo-political challenges.

In the consumer lighting, the Company will continue with the high growth momentum by focussing on further improving the distribution and reach, across urban, semi-urban and rural India. There will be several new product launches, across LED Lamps, battens and down lighters, with a strong focus on smart lighting products. Besides, the Company will continue to aggressively drive channel financing, the release added.