Shares of Surya Roshni have delivered stellar returns to their shareholders, gaining 63.60 percent in the last six months, moving from Rs. 378.65 apiece to Rs. 619.50. From its 52-week low of ₹323 apiece marked on August 16, 2022, the stock rose nearly 94.73 percent to hit a new 52-week high of ₹629 on January 19, 2023.
The stock surged 19.50 percent over the past one year, surpassing the Nifty50 index by 17.46 percent, which returned 2.04% during the same period. In the current month so far, the stock produced a return of 26.40%. Also, it is up by 92% from one year low.
Over the last three years, the stock generated a stunning return of 227%, while it increased by 39% over the previous five years.
Recently, on January 19, the company said that it had received an order worth ₹123.95 crore from Indian Oil for the supply of API-SL coated pipes and bare pipes in the state of Tamil Nadu.
Surya Roshni is a small-cap stock with a market capitalization of ₹3,370 crore. The company operates in the steel and lighting consumer durables division.
The steel division manufactures electrical resistance welded (ERW) steel pipes and tubes, cold-rolled, formed sections and profiles, and cold-rolled (CR) strips. The lighting division manufactures fluorescent tube lamps (FTL) and more. The company exports its products to over 50 countries around the world.
For the December ending quarter, the company reported over two-fold increase in its consolidated net profit at ₹89.66 crore. The company posted a net profit of ₹40.49 crore in the year-ago quarter. Sequentially, the net profit was up by 0.21%.
The revenue from operations came in lower at ₹2,021.28 crore in Q3FY23 than at ₹2,030.30 crore in the corresponding quarter of last fiscal. The operating expenses fell marginally by 3.82% YoY to ₹1,859 crore.
The revenue from the lighting and consumer durables division rose 6.35 per cent to ₹395.73 crore from ₹372.07 crore in Q3 FY22, while revenue from the steel pipes and strips segment dropped 2.16 per cent to ₹1,625.55 crore in Q3 FY23, as against ₹1,661.47 crore earlier.
Following the company's Q3 results, brokerage firm IDBI Capital maintained its “buy” rating on the stock and raised its target price to ₹760 apiece from ₹567 earlier, indicating a strong upside of 23%.
The brokerage pointed out that even though the revenue from steel pipes category fell, the EBITDA/t jumped 76% YoY due to an improvement in the product mix in favor of API and GI pipes.
Due to strong demand from the Oil & Gas, CGD, and water transportation sectors, the company is seeing a consistent flow of orders for API pipes and other value-added products. Surya Roshni currently has an order book worth over Rs. 7 billion (exports and API Pipelines), the brokerage stated.
On the lighting and consumer durables division, the brokerage said that the rise in revenue came on the back of the company’s strong focus on the premium fan category.
Going ahead, the company has a strong pipeline to launch new products in lighting and consumer durables and also aims to focus on distribution to increase its presence in tier-1 cities, according to the brokerage.
02 analysts polled by MintGenie on average have a 'strongbuy' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.