Surya Roshni in FY26: Stable revenue, softer margins, and a big FY27 revenue jump on the table

Surya Roshni Limited ended Q4 FY26 with consolidated revenue of INR 2,163 crore, broadly flat year on year. Profitability, however, softened. EBITDA for the quarter came in at INR 170 crore and PAT at INR 98 crore, down versus Q4 FY25. For the full year FY26, revenue stood at INR 7,540 crore versus INR 7,436 crore in FY25, while EBITDA declined to INR 541 crore and PAT to INR 286 crore.

Management described Q4 as a sequential improvement quarter, supported by better realizations and product mix. But the year as a whole reflected a challenging operating environment across both businesses, with steel price volatility and export disruptions on one side and input cost pressure in consumer facing categories on the other.

The company highlighted that it remained a zero debt company with a net cash surplus of INR 337 crore as of March 31, 2026. It also declared a final dividend of INR 2.50 per share, taking the total dividend for FY26 to INR 5.00 per share including the interim dividend.

Two segment company, two different FY26 stories

Surya operates primarily through two segments: Steel Pipe and Strips, and Lighting and Consumer Durables. In FY26, steel remained the dominant contributor to revenue, while lighting delivered healthier growth momentum.

Lighting and Consumer Durables posted Q4 FY26 revenue of INR 501 crore, up 9% year on year. For FY26, segment revenue grew 7% year on year to INR 1,809 crore. EBITDA for FY26 in this segment was INR 156 crore, marginally lower than FY25, and EBITDA margin moderated.

In the earnings call, management highlighted that March 2026 was the highest ever monthly sales month across all categories in this segment, calling it a reflection of distribution depth and brand strength. Professional Lighting also stood out, with management stating the business achieved double digit growth and closed FY26 with revenue of INR 473 crore and an order book of INR 160 crore at the end of Q4.

Steel Pipe and Strips reported Q4 FY26 revenue of INR 1,662 crore, down 2% year on year but up 15% sequentially. Q4 volumes were described as the highest ever quarterly dispatch for the segment at about 2.6 lakh tonnes. Despite this volume strength, margin pressure remained visible. Q4 EBITDA in steel was INR 126 crore, and EBITDA per ton was INR 5,121 versus INR 6,708 in Q4 FY25.

For FY26, steel revenue was INR 5,731 crore, broadly flat versus FY25. EBITDA fell to INR 385 crore from INR 446 crore, and EBITDA per ton declined to INR 4,553 from INR 5,392. Management attributed the year’s volatility to steel price swings, export market disruptions, and pressure in tender based higher margin categories.

Financial summary

Margin discussion: value added mix improving, but product economics under pressure

Surya’s steel narrative has increasingly been built around a shift to value added products. In FY26, management stated value added products contributed about 43% of overall steel volumes. The investor presentation also positioned API and spiral pipes, 3LPE coating, and hollow sections as value accretive categories.

However, the economics of the API and spiral category have compressed. The presentation’s mix and EBITDA per ton table shows API and spiral EBITDA per ton at INR 5,600 in FY26 versus INR 9,300 in FY25 and INR 12,134 in FY23. In the Q&A, management accepted that the category is tender driven and exposed to heightened competition, and that government spending patterns matter.

This became a key theme in the earnings call, with multiple investors questioning repeated misses versus earlier commentary and comparing Surya’s profitability trajectory to peers. Management pointed to the Middle East crisis as a catalyst that impacted exports in late February and created raw material availability stress in India.

Separately, management flagged incremental cost pressures for FY27 including higher fuel and power costs, and an estimated INR 30 to 40 crore impact linked to gratuity and new labour law provisions. These comments underline that even if volumes recover, margin stability will remain the primary variable to track.

Strategic initiatives: wires and cables, PLI backward integration, and capacity ramp

The company’s investor presentation laid out a broader strategy beyond the legacy steel and lighting portfolios.

One of the clearest new growth vectors is Wires and Cables. Management stated FY26 wires and cables revenue of INR 38 crore and provided a FY27 revenue target of INR 260 crore. It also reiterated a three year guidance of INR 500 to 600 crore for this business. Management claimed that the company is now an end to end manufacturer, with 180 meter reel packs already in the market and a DBT enabled electrician loyalty program operational.

On backward integration, the presentation highlights commencement of LED components manufacturing under the PLI scheme for the Large Investment category. The company stated it has already invested a cumulative incremental INR 25 crore in plant and machinery, has received the third year claim, and is eligible for the fourth year claim. The incentive is stated as 4% to 6% on sales over the base year for five years.

In PVC pipes, the presentation reported FY26 revenue of INR 102 crore versus INR 94 crore in FY25 and stated capacity has reached 12,500 MTPA. The company tied the opportunity to government initiatives such as Housing for All, Nal se Jal, AMRUT and Swachh Bharat Mission.

In steel, expansion continues through new projects and brownfield additions. The investor presentation mentions commissioning of a new spiral pipe project at Malanpur, Madhya Pradesh, with an outlay of INR 50 crore and capacity of about 24,000 tons per annum, aimed at water projects in Rajasthan, MP and UP.

During the call, management also spoke about capacity enhancement. It stated steel capacity has already increased to about 1.4 million tons, is expected to reach about 1.6 million tons in FY27, and could rise further to about 1.9 million tons in FY28 to FY29.

FY27 guidance: a sharp revenue step up, driven by exports and newer categories

The most important incremental information from the call was explicit FY27 guidance. Management indicated FY27 revenue of around INR 9,400 to 9,500 crore, comprising about INR 7,200 crore from steel and about INR 2,200 crore from lighting. On EBITDA, management guided around INR 680 to 700 crore at the consolidated level, with steel contributing about INR 480 crore and lighting about INR 200 crore.

In steel, management guided FY27 volume of 11 lakh tons, up from 9.04 lakh tons in FY26. It also highlighted exports as a key driver, stating FY26 exports of 1.36 lakh tons and a target to cross 2.5 lakh tons in FY27. Management referenced the opening of the US market and said it had already booked about 65,000 tons, with potential for a larger run rate.

The company also stated the steel division order book is about INR 1,000 crore, led largely by exports, spiral pipes, and domestic API orders, providing visibility into H1 FY27 and potentially the highest ever half year for value added product sales.

Takeaways for investors

Surya’s FY26 performance was a mix of stability and pressure. Revenue held up, but margins and profits weakened, particularly in steel. At the same time, the balance sheet remains a differentiator, with management stating the company is net cash positive and committed to shareholder returns through dividends.

FY27 is framed as an inflection year, with management guiding a sizeable jump in revenue and EBITDA. Execution will need to be visible across three areas: export scaling without disruption, recovery in value added profitability, and real traction in newer categories such as wires and cables. The next few quarters should indicate whether the FY27 guidance is achievable under the cost and geopolitical uncertainties management itself highlighted.