Surya Roshni Q2 revenue rises 33% as margin falls 180 bps

Surya Roshni Limited reported consolidated revenue growth of 33% year on year to ₹2,448 crore in Q2FY27, while earnings before interest, tax, depreciation and amortisation (EBITDA) rose 1% to ₹143 crore and EBITDA margin fell 180 basis points to 5.8% from 7.6% in Q2FY26.

How did Surya Roshni perform in Q2FY27?

Surya Roshni grew revenue faster than operating profit in Q2FY27, as revenue increased by ₹603 crore from ₹1,845 crore in Q2FY26 while EBITDA increased by ₹2 crore from ₹141 crore. Profit before tax (PBT) rose 4% to ₹103 crore, and profit after tax (PAT) rose 3% to ₹77 crore.

Surya Roshni’s Q2FY27 revenue was 20% higher than ₹2,046 crore in Q1FY27, while EBITDA rose 19% from ₹120 crore and PAT increased 29% from ₹60 crore. EBITDA margin was 5.8% in Q2FY27, compared with 5.9% in Q1FY27.

For H1FY27, Surya Roshni reported revenue growth of 30% to ₹4,495 crore, EBITDA growth of 18% to ₹263 crore and PAT growth of 26% to ₹136 crore. H1FY27 EBITDA margin was 5.9%, down 60 basis points from 6.5% in H1FY26, a smaller decline than the Q2 year-on-year comparison.

Why did Surya Roshni’s EBITDA margin decline?

Surya Roshni said higher input costs, extended producer responsibility payments and a planned increase in brand investment reduced Q2FY27 margins. In Lighting & Consumer Durables, the company identified higher costs for copper, aluminium, steel and petroleum-based materials, while staggered industry price increases made distributor and retailer acceptance more difficult.

Surya Roshni also faced a favourable prior-year comparison in Steel Pipes & Strips, where Q2FY26 demand included one-time European and Canadian pre-buying ahead of Carbon Border Adjustment Mechanism implementation and quotas. Steel EBITDA per tonne fell 18% year on year to ₹4,105 in Q2FY27 from ₹5,013, although it rose 2% from ₹4,006 in Q1FY27.

In Lighting & Consumer Durables, Q2FY27 EBITDA rose 1% to ₹40 crore as revenue increased 17% to ₹507 crore, resulting in a 120-basis-point margin decline to 7.8%. The segment margin was unchanged from Q1FY27, with management saying backward integration absorbed part of the input-cost increase.

Advertising and publicity spending increased to about ₹10 crore in H1FY27 from ₹6.5 crore in H1FY26, according to management. The spending supported wires, gifting and appliances while H1FY27 Lighting & Consumer Durables revenue rose 16% to ₹964 crore and EBITDA rose 8% to ₹76 crore.

Which Surya Roshni business drove Q2FY27 sales growth?

Surya Roshni’s Steel Pipes & Strips segment drove the larger share of Q2FY27 sales growth, with revenue rising 38% year on year to ₹1,941 crore. Lighting & Consumer Durables generated ₹507 crore, up 17% year on year, while Steel Pipes & Strips EBITDA increased 1% to ₹103 crore.

Steel Pipes & Strips achieved its highest-ever quarterly sales volume of 2.67 lakh tonnes in Q2FY27, up 23% year on year and 17% sequentially, exceeding management’s guidance of 2.60 lakh tonnes. Export volume rose 64% year on year to 64,408 tonnes, or about 24% of segment volume, and capacity utilisation increased to 84% from 82% in Q1FY27.

Lighting & Consumer Durables recorded its highest-ever Q2 revenue of ₹507 crore despite Diwali falling in Q3FY27. Ceiling fans and water heaters each recorded 26% volume growth, mixer grinders grew 20%, table, pedestal and wall fans grew 18%, and LED bulb volume rose 11%.

Wires & Cables revenue increased to about ₹50 crore in Q2FY27 from about ₹38 crore in Q1FY27, taking H1FY27 revenue to about ₹88 crore. Professional Lighting had an order book of more than ₹200 crore, while Steel Pipes & Strips had an order book of about ₹1,200 crore, producing a combined disclosed order book of about ₹1,400 crore.

What does Surya Roshni expect in H2FY27?

Surya Roshni management expects a better H2FY27, citing the seasonal strength of Q3 and Q4 for Lighting & Consumer Durables, Diwali in Q3FY27, and planned execution of Steel Pipes & Strips orders. Management expects the share of value-added products to rise from about 48% of Steel Pipes & Strips volume in Q2FY27 as API export and domestic oil-and-gas orders are executed.

The Steel Pipes & Strips order book includes about 1 lakh tonnes of export orders worth about ₹850 crore, including about 80,000 tonnes of API pipes worth about ₹700 crore, for Q3 and Q4 execution. Management expects to supply more than 1 lakh tonnes of API pipes in H2FY27 and targets about 6 lakh tonnes of H2 volume after reporting 4.96 lakh tonnes in H1FY27.

Management said all legacy export orders had been executed and that current orders reflect prevailing freight rates. It also disclosed about 70,000 tonnes of fully hedged imported raw material for Q3 and Q4, while saying about half of the business is on fixed-rate contracts.

In Lighting & Consumer Durables, management said it was on track for FY27 guidance of about ₹2,200 crore revenue and ₹200 crore EBITDA, alongside 22% to 23% value growth and 25% volume growth. Management also said a decision on increasing printed circuit board capacity by another 20,000 square metres was due by December 2026.

Conclusion

Surya Roshni’s Q2FY27 results show that 33% consolidated revenue growth and record Steel Pipes & Strips volume did not translate into comparable EBITDA growth. Higher material costs, extended producer responsibility payments, brand spending and an exceptional Q2FY26 Steel comparison contributed to the 180-basis-point decline in consolidated EBITDA margin to 5.8%.

The next reported test is H2FY27 execution of the approximately ₹1,400 crore combined order book, including about ₹850 crore of Steel export orders. Management’s disclosed targets include about 6 lakh tonnes of Steel Pipes & Strips volume in H2FY27, 11 lakh tonnes for FY27, and ₹2,200 crore of FY27 Lighting & Consumer Durables revenue.