Surya Roshni Ltd Management Discussions.

Company Overview

Amidst the journey from a subtle beginning to spearheading the technological revolution in the 21st century, Surya Roshni has exceedingly come a long way from being just another steel tube making unit back in 1973. Today, Surya Group has emerged into a colossal of 5,975 crore (US$ 850 million) Indian manufacturing company, exporting products to over 50 countries across the globe. It has manifested, a strong brand image and created an irreplaceable mark onto the minds and consideration of customers.

Surya Roshni business interests are broadly aligned into two areas: Steel Pipes & Strips and Lighting & Consumer Durables.

In the Steel Pipes & Strips segment, the Company manufactures range of steel pipe products for Agriculture, Infrastructure, Oil & Gas and Construction Sectors. Its offerings for the Oil & Gas sector are approved by the American Petroleum Institute (API). The pipe manufacturing units are strategically located in Haryana, Gujarat, Andhra Pradesh and Madhya Pradesh that allows the Company to mark its presence across the length and breadth of the country and across the globe including the Middle East, Europe, Africa and Asia. The merger of its associate company e-Surya Global Steel Tubes Limited has further boosted the Companys positioning in the industry.

Suryas Lighting Segment which was initiated in 1984 with the dream of ‘Lighting Every City Every Home, three decades down the line, it is appraised as one of the leading brands in the Lighting industry. The LED technology has opened up a new frontier and is potentially acknowledged as the future of lighting technology. The Company ensures that the LEDs manufactured are energy efficient with extremely lower maintenance cost and comes with the facilitation of a remarkable life span. All these factors add to the advantages of LED lighting that will ensure that the revolution in the lighting industry is propelled forward.

Under Lighting & Consumer Durables, the Company offers a wide range of lighting products - from GLS to LEDs and LED luminaries. Under the Consumer Durables, it offers several models of Fans and Kitchen Appliances like - Mixer Grinders, Induction Cooktops, Toasters, Irons, Water Heaters and Air Coolers, among others. The Companys

lighting manufacturing units are located in Uttarakhand and Madhya Pradesh.

The Company is strongly positioned as one of Indias largest exporter of ERW Pipes, largest producer of ERW GI pipes and second largest lighting company. Its large distribution network of over 2,500 distributors and 2,50,000 retailers countrywide drives the B2C business of the Company. Besides its B2B project business is equally gaining importance and driving revenues year on year. With ISO 9001:2015, ISO 14001:2015 & OHSAS 18001:2007 certifications under its belt, and products that are accredited with an international performance of safety standards, Surya stands tall on its commitment to deliver eco-friendly and quality products. Surya is also known for being one of the most trusted and preferred brands with various Govt. departments, institutions and international buyers. The Company has recently been awarded with ‘Brand Excellence Award in Lighting Category in North India Best Brand Awards, 2018 and was also awarded with ‘Champions of Rural Market award from the prestigious newspaper The Economic Times. The Company is geared up with fresh capacities and new product lines to cater to the underlying industrial opportunities. With strong fiscal prudence, enhanced focus on value-added products and increasing operational efficiency measures, the Company is all set to drive strong returns to stakeholders going ahead.

Industry structure and developments

As India marches ahead on a solid growth trajectory to complete 75 glorious years of independence, Indian industries remain committed to building a better India. Differences between rural and urban India will be reduced, making physical, digital and social infrastructure in rural areas at par with the best in the country, with a special focus on education and health. The Government has ambitions plans of making India a 5 trillion economy by 2025. This will be driven by shift in consumer behavior and expenditure patterns. With an enormous population,

favourable demographics and high catch-up potential due to low initial GDP per head India will continue to rise in the global GDP league table in the coming decades.

a. Steel Tubes and Pipes

Steel is one of the worlds most essential materials. It is a fundamental to the growth of any nation as it forms the backbone of industrialisation. Steel demand in India is primarily driven by strong economic performance and investments in housing, infrastructure like railways, ports, roads, airports, etc. The industry has evolved significantly over the years and is further expected to continue its growth momentum.

Globally, Oil & Gas Industry is one of the largest consumers of Steel Tubes and Pipes. The demand remained comparatively lower over the past few years owing to subdued oil prices. Recently, with the pull-out of the US from the Iran nuclear deal sent oil prices to a four-year high, reaching $80/barrel. Increasing prices will lead to surge in drillings leading to additional demand for new pipes. The steel tubes and pipes market is expected to reach an estimated $97.7 billion by 2023 with a CAGR of 3.9% from 2018 to 2023. The major drivers for this market are increasing construction of new pipelines for oil and gas, water and wastewater, replacement of aging pipelines, and infrastructure development across the Middle East and North American markets.

The Indian Steel Tubes and Pipes industry has an enormous untapped growth potential. The industry offers seamless, SAW, ERW pipes, galvanised pipes, steel sections and steel panels. Today, India has evolved as the leading ERW steel tubes manufacturing hub in the world with the domestic demand levels of around 10 MTPA. It ranks amongst the top three manufacturing hubs in the global pipe industry, after Europe and Japan. The pipes are extensively exported to countries like the US, Europe, Malaysia, Thailand, the Middle East, and Indonesia owing to its competitive pricing, high quality and locational advantage.

Steel pipes demand is mainly driven by infrastructure activities like shipping, aviation, housing, roads & highways, power and oil & gas transportation, city gas distribution and railways & airport modernisation. Last three years have witnessed a significant demand uptake owing to an improvement in the overall tender activity by the government-run oil and gas companies. The industry is set to leverage opportunity from Indias $10 billion push to expand its natural gas network to more of its urban masses and cut pollution. Besides, low penetration of pipes and measures such as the setting up of the National Gas Grid, river water interlinking projects, revamping the water and sanitation infrastructure, and higher oil prices, will lead to a spurt in exploration and production investments and thereby higher demand for pipes.

Surya Roshni is the largest exporter of ERW pipes and largest producer of ERW GI Pipes in India. It manufactures ERW Steel pipes (Galvanised Black, Hollow section), API, Spiral and CR strips, having wide applications of its products in agriculture, infrastructure building, oil & gas and construction sectors. The positive industry optimism coupled with Governments reforms on formalizing the economy will drive demand for Companys products going ahead.

Gas Transmission

Globally, economies are shifting from oil to gas. Natural gas distribution companies have revived their

investment plans, which include construction of new pipelines as well as replacement of aging pipelines. The Governments vision to achieve a gas-based economy needs a massive network of pipelines for transportation of natural gas to various corners of the country.

There has been an increasing concern over the pollution levels of major cities and towns across India. This necessitates the Indian Policy makers to consistently stress the role of natural gas in Indias overall energy mix in the 21st century. This will not only lead to improvement in the environment but will also reduce the overall energy costs. At present, India has around 16,788 kms of operational natural gas pipeline and around 14,239 kms are under development. Major part of domestic production in India has been concentrated over western and southern region of the country and in absence of adequate natural gas pipeline infrastructure the northern and eastern region of the country are gas starved. However, to satiate the increasing demand and strengthen the domestic gas distribution within the country, the Centre has planned an initial spend of Rs. 70,000 crore to spread gas pipelines across the country. It further aims to increase the share of natural gas from the current levels of around 6% to 15% by 2022 and upto 20% by 2030. The demand at the same time is expected to grow to 745 MMSCMD by 2029-30.

City Gas Distribution

The Government has envisaged to develop the National Gas Grid and City Gas Distribution networks in the country to enhance the availability and accessibility of natural gas to public at large. City Gas Distribution (CGD) refers to transportation or distribution of natural gas to consumers in domestic, commercial or industrial and transport sectors through a network of pipelines. The current prominent method of delivery i.e. delivering gas through cylinders is energy intensive and tedious because of the needless involvement of intermediaries including gas agency, distributors etc. Piped supply, on the other hand, is more efficient, accessible and helps in maintaining a continuous supply in the event that the fuel is used in industries.

At present, 31 companies are developing CGD networks across 81 geographical locations in 21 states and Union territories, supplying clean cooking fuel in the form of piped natural gas to about four million households. The Government have ambitions plans to provide 10 million PNG connections. Besides, CGD has been accorded the highest priority in gas allocation while allocating 100% domestic gas for the domestic PNG and CNG segments. On the regulatory front, the Petroleum and Natural Gas Regulatory Board (PNGRB) has reformed to a large extent the CGD authorisation regulations to address the impediments faced in previous bid rounds. Also, some state governments have introduced sector-specific policies/guidelines enabling overall growth of CGD network in India.

During 2018-19, India completed two rounds of city gas distribution auction. Both the bidding rounds saw more contracts awarded than ever, higher than all the previous 8 bidding rounds combined. That would extend the CGD coverage to over 400 districts equivalent to over 70 per cent of Indias population. This will lead to development of massive CGD infrastructure of providing PNG connection to close to five crore homes, setting up about 8,000 to 10,000 CNG stations and laying of 25,000 km to 30,000 km of steel pipeline in the next eight years.

According to Live Mint, investments as much as 1.1 trillion is expected to pour into distribution projects over the course of the next decade

Surya Roshni is evenly poised to respond to the industrial opportunities stated above through its best- in-class quality offerings in its steel pipes and strips segment. The Company is geared up to achieve its business goals through adoption of latest technology, achieving operational efficiencies, providing excellent

customer services and launching innovative and diversified products and retain its prominent position in the Indian steel pipes Industry.

b. Lighting

The Indian lighting industry is evolving rapidly. There has been a shift from conventional Fluorescent Lighting (FTL and CFL) incandescent bulb and High Intensity Discharge (HID) lamps to LEDs owing to its energy efficiency. The conventional lighting has been on a decline mode since four years and the market is currently going through a visible demand shift. India is the second most populous country in the world and yet, is only the fifth largest electricity consumer - a situation that has led to an ever-widening demand- supply gap. However, the acceptance levels of the LEDs is now on a rise with higher demand being driven from the construction segment, replacement as well as rural India. There has been also a significant rise in the demand for battens, downlighters and smart lighting for households. The Electric Lamp and Component Manufacturers Association of India (ELCOMA) predicts that LED market will grow to 261 billion by 2020, taking the LED Market share to 80% of the total lighting Industry.

Key factors that are expected to boost the market include declining LED prices coupled with favourable government initiatives to provide LED lights at subsidised cost. Under Street Lighting National Programme (SLNP), EESL seeks to replace 3.5 crore conventional steer lights with energy efficient LED lights across the country. At present, around 9 million street lights have been replaced with energy efficient LED lamps. The project is implemented across 23 States and Union Territories.

Additionally, other Government schemes introduced post 2014 include DDUGJY (Deen Dayal Upadhyaya Gram Jyoti Yojana) to improve electrical supply in rural India, Bijli Har Ghar Yojana (Saubhagya) to electrify 40 million families in rural and urban areas and Unnat Jyoti (UJALA) to distribute 770 million LEDs across 100 cities. Under UJALA over 350 million LED bulbs have been distributed to the consumers in India by the end of June 2019.

Going ahead, smart, connected LED lights are the next big thing in the LED lighting market. Lighting systems are getting smarter as autonomous, selfcommissioning illumination systems are emerging. The industry has switched from analogue to digital systems as LED lighting allows users to control, monitor and measure lighting output. This transformation is taking place across public, home and professional lighting, and these smart connected LED lights will emerge as the most widely adopted IoT devices within the next few years. Control devices, dimmers and wireless lighting with advanced sensors will cater to the needs of modern consumers. Technology adoption and consumer price sensitisation will be the

key drivers of Indias LED growth story. The industry offers innumerable opportunities for growth over the next decade. With Governments steady focus on promoting energy-efficient LEDs, the industry would gradually shift towards a consolidation of the organised segment.

c. Consumer Durables

1. Fans

The Indian Fan market is broadly classified into Ceiling fans, Table fans, Pedestal fans and Wall fans. While ceiling fans dominates the organised market in terms of volume, table fans, pedestal fans and wall fans follow also are gaining equal prominence. The unorganised sector is heavily dominated by ceiling fans and table fans. Much of the sale of organised sector is in the metro, tier I and tier II markets. Moreover, the export of fans from India has grown considerably in the last few years and is a testimony to the quality and development of fan industry in India.

Going forward it is projected that the Indian electric fans market will surpass $ 2 billion by 2023. With the growing housing sector, increasing disposable incomes, higher number of organised outlets, rising preference for online sales and emergence of smart fans (like dust free, LED), the demand for electric fans will continued to grow.

2. Home Appliances

The Indian Home Appliances Industry has consistently grown with current trends and reinventing old technologies to suit the consumer requirements of today. In todays day and age, consumers are looking for the convenience in the form of household appliances. Formerly known as ‘appliances of the west, products like the vacuum cleaner, slow juicers, hand blenders, washing machines, etc have made its way into authentic Indian kitchens. The common factor driving the demand for such appliances is the proposition of convenience, time reduction on daily chores. The year 2018, revolutionised the home appliances industry with the introduction of innovations like smart appliances inclusive of energy saving tools, wireless, sensor-driven products, voice command for hand-free movement, digital features and mobile integration.

Over the years, the markets and consumers have changed considerably. Rising per capita disposable income of consumers, especially upper and lower middle income groups, aspiring millennials, growing working population and the ever-evolving consumer lifestyle are responsible to boost the home appliances industry in India. The industry is expected to witness a 13% CAGR till 2023.

Operational Review

1. Steel pipes and strips

Particulars 2018-19 2017-18
Contribution to total 74 72
revenue (%)
Net revenue (Rs. crore) 4,427 3,555
PBT (Rs. crore) 74 64

The Companys state-of-the-art pipe producing units are situated in Haryana, Madhya Pradesh, Gujarat, and Andhra Pradesh. Each plant is equipped with high-end machines, slitting lines, pipe mills, galvanising units, finishing machines and fail-safe, high pressure hydro testing machines. Besides, each plant is also equipped with adequate handling facilities. These pipes are sold under the brand ‘Prakash Surya. The ERW and Spiral welded pipes as well as API pipes are exported and widely accepted across 50 countries globally.


A. ERW Steel Pipes (Galvanised (GI), Black and Hollow Section)

The Companys ERW Steel pipes are manufactured in the range of 1/2" to 16" diameter. These pipes are broadly used across Agriculture, Industry and Construction activities like scaffolding, casing and tubing in bore wells. It forms an important mode to transport water, gas, petroleum, chemicals and other liquids over long distance. These pipes possess the strengths to meet the difficult prerequisites of the industry. The quality of the pipes manufactured are as per national and international specified standards.


No. 1 in India (ERW GI) and exports (ERW)

Meets 8-10% of Indias demand for GI pipes and comprises of 15% share in the organised segment

Finds application in Indias agriculture sector with over 40% market share in Northern states (Madhya Pradesh, Rajasthan, Maharashtra, Haryana) and around 60% market share in South (Karnataka, Andhra Pradesh and Kerala) Provides piping requirements for housing in the hilly regions like Jammu and Kashmir, Uttarakhand and Himachal Pradesh etc. Temperature-controlled processes for right shape and aesthetics

Applications and opportunities


Gl Pipes Ny

Middle East, Australia and New Zealand

• Construction segment and firefighting Europe, Germany and UK

Applications across railings, public places, railway stations and buildings, where aesthetics plays a big role Opportunities:

A proven performer in the export markets. The Company stands to leverage the construction activities in its areas of operations. Besides, it will continue to cater to the requirements of the fire-fighting industry.

Domestic GI Pipes

Agriculture & irrigation Casing and tubing Water transportation/ plumbing and pipelines Green house

• Firefighting Solar panels Spur lines- joining main line to home lines


• Industrial infrastructure/construction works/fabrication

• Road transportation - side structures/fencing (section pipe, sign boards)

• Railways - platforms, bullet trains, metros

• Airports structures

• Smart Cities - new pipelines for water

• River connectivity and interlinking

• Door frames, window frames and furniture (section pipes)

• Scaffoldings


• Engineering & architectural structures

• Airport, metros, railways

• Urban development

• Electrical poles / telecom towers

• Solar structure

• Sign boards


With strong impetus on agricultural segment and water scarcity issues, water transportation is going to be the next big opportunity. Strong industrial development, infrastructure modernisation and smart cities will continue to drive demand for Surya Roshni products. With strong market leadership, the Company stands to leverage the opportunities.

B. API & Spiral

The Company manufactures world-class API pipes with different types of coatings like 3LPE, 3LPP, FBE (single & dual layer) and internal epoxy to provide rust-free properties to the pipe and enhance its durability. The Company has maintained high quality standards of its products which is at par with the worldwide API line pipe manufacturers with internal and external coatings. Its high specification standards meets the requirements of both national and international markets, including that of American Petroleum Institute (API). It has the necessary accreditations and certifications of 9001, 14001 and 18001. Diverse pipes details, such as, EN, BS, AUSTRALIA and ASTRA GRADE are likewise produced by the Company.

The spiral and welded pipes are manufactured in the range of 18 to 105 with maximum thickness of 1 (25.4 mm). The internal and external coating is done for pipes ranging from 4" to 64" in diameter.

Applications and opportunities \ Applications

Oil pipelines

• Natural gas

• Oil well casing (ONGC)

City gas distribution

• Water pipelines - mains, sewerage, industrial water lines and

• Plant piping


Demand for cross country pipelines through the expansion City Gas Distribution Network. Strong investments by hydrocarbon majors will further drive piping demand for oil & Gas.

C. Cold rolled strips and sheets

The Companys cold rolled strips and sheets find extensive application as critical input across auto segments, motor stamping, furniture, and fittings, domestic appliances, drums and barrels, cycle rims, umbrella tubes and tears and rips and engineering applications. Owing to the stringent specifications of these applications, the steel strips have intrinsic quality standards, surface finish and close resistance on dimensions. The Company is adequately equipped to meet the testing needs of the markets through its cold rolled plant at Bahadurgarh (established in 1991 and later upgraded in 2008). The plant serves NCR and different markets of north India, particularly concentrating on the automobile sector with an installed plant capacity of 1,15,000 MT per annum.

The Companys state-of-the-art pipe producing units are situated in Haryana, Madhya Pradesh, Gujarat, and Andhra Pradesh. Each plant is

Steel pipes and strips Capacities (p.a)

equipped with high-end machines, slitting lines, pipe mills, galvanising units, finishing machines and fail-safe, high pressure hydro testing machines. Besides, each plant is also equipped with adequate handling facilities. These pipes are sold under the brand ‘Prakash Surya. The ERW and Spiral welded pipes as well as API pipes are exported and widely accepted across 50 countries globally.

Highlights 2018-19

What has the Company achieved

Commenced commercial production of the newly set-up 3LPE Coated Pipe manufacturing unit at Anjar-Kutchh (Gujarat) and established record of receiving accreditations and certifications.

Established Hindupur facility in 2017 with 2017-18 being the first year of commercial operations - a part of our regional expansion strategy of serving the South Indian markets. During 2018-19 the initial capacity got completely utilised and the unit went for expansion in the second year of operation itself.

Received over 500 crore orders for 3LPE from various oil & gas and CGD players

Long-term benefits

Enhance presence in Oil & Gas sector (including CGD) as well as large dia pipe for water supply infrastructure

Higher capacity utilisation of its existing ERW and Spiral API Pipe facilities

Savings in logistic & coating charges

Improvement in top-line and bottom-line

Economies of scale at lower capital cost

Increased market share in the premium market of South India

Opportunities and demand drivers City Gas Distribution

The gas economy and pipeline industry move in tandem. Higher the expansions in the sector, larger will be the demand for pipeline. The Government of Indias thrust to double the share of natural gas in Indias energy mix by 2030, provides around US$ 10 billion impetus to the pipe manufacturers. Besides, in the recently concluded countrys biggest city gas distribution network auction, which ambitiously aims to link over 10 million households to the gas grid by 2020, shall provide ample scope of growth of API steel pipe business.

Replacement of aging pipes

Revamping of water pipes to ensure equitable distribution of water and the sanitation infrastructure. The pipe tends to get more corrosive over a long term which may get contaminated with water affecting the health of the citizens.

River interlinking projects

The Government has planned ambitious projects to interlink over 60 rivers across India. It will deal with the problem of drought and floods afflicting different parts of the country, while decreasing farmers dependency on uncertain monsoon rains. It is a large-scale civil engineering project to link rivers through a network of 30 canals and 3,000 small and large reservoirs across India. This project will generate higher demand for diameter pipes.

Water scarcity

The Government had launched National Rural Drinking Water Programme (NRDWP) in April 2009 to provide piped water connection to 35% of rural households by 2017. However, the scheme could penetrate across barely 18.3% of rural households by end of 2018-19. To make the matter worse, the number of new connections witnessed a decline. As a result, the centre is strongly focussing on providing piped water to households across rural India through its schemes like ‘Har Ghar Nal Ka Jal yojna.

Development of smart cities, housing for all and modernisation

The Government aims to build 100 smart cities with latest urban infrastructure to provide the best quality of life. Its ‘Housing for all scheme aims to construct over 3 crore homes for weaker sections of the society. Besides that, many Tier II and III cities are also getting modernised, necessitating the growing needs for water, gas and sewage supply. This will generate demand for pipes.

Rural India

The Governments push to support agriculture sector by transferring, setting minimum set price for commodity, encourage e-trade and strengthen the irrigation and lab facility will ultimately lead to saving cost, improving yield and higher consumption of tubes and pipes in the region.

Growth in different sector

There has been growing need for CR strips in different sectors ranging from auto components to home appliances to engineering sector. India has now become self-dependent for auto component and several other CR sheets applications. Besides, there has been strong traction from exports, which will encourage higher CR strips demand from the Indian companies.

International events

The Company would leverage its positively evolving international reputation of its brand ‘Prakash Surya to benefit from the upcoming major events like Expo 2020 in Dubai and FIFA 2022 in Qatar.


Going ahead, the Oil and Gas Companies are tendering aggressively for laying new pipelines for transportation of Oil and Gas, accordingly sizeable investment opportunity is anticipated for the expansion of API cross country line. The Governments thrust to strengthen the agricultural and rural economy, promote metro railways, elevated tracks for Railways, City gas projects, infrastructure development and schemes such as Bharatmala Pariyojana and Awas Yojna will ultimately boost the Steel Pipes business.

With strong capacities, benefits of economies of scale, locational advantage and strong presence across the nation, the Company is set to deliver more robust growth ahead.

2. Lighting and Consumer Durables

Particulars 2018 - 19 2017 - 18
Contribution to total revenue (%) 26 32
Net revenue (Rs. crore) 1554 1382
PBT (Rs. crore) 98 92



Surya Roshni is Indias second largest lighting company with a dominating presence in the Tier 2 & Tier 3 cities and rural areas. In the past few years, the Company has upgraded its lighting portfolio by phasing out CFL sales and bringing in diverse LED- based solutions. It has achieved exponential growth in volumes to compensate for falling LED prices and has significantly marked its presence in both B2C and B2B segments. Besides, it has consistently driven innovation by launching LED lighting range of downlighters, battens, lamps, street sights, flood lights and decorative luminaires.

Being a pioneer in presenting quality productive lighting arrangements, Surya Roshni has been giving inventive and safe lighting to its clients. Its state-of- the-art integrated facilities in Kashipur (Uttarakhand) and Gwalior (M.P) ensures every product are extensively checked for a noteworthy life expectancy. A Compulsory Registration Scheme (CRS) of Deity/BIS for LED products mandates standards safety checks of LED products. The Companys manufacturing plants have CRS approval from the Bureau of Energy Efficiency (BIS). It also provides star rating plan for LED lamps which further enhances the luminous efficacy of lamps. Its R&D facility - Surya Technology and Innovation Center (STIC) at Noida - propels best-

in-class lighting lab and research focus on LED-based innovations and offerings. The Company enjoys a Pan- India presence through its 2,500 vendors and 2.50 lakh retailers. It also exports to over 40 nations, including the Middle East and U.K (GE, Osram and Tungsrum).

The Company has also marked a selective presence in supply to the EESL orders which generateed 21% of the Lighting Revenue during 2018-19. Currently, out of 8.7 million Street Lights replaced under SLNP, Surya contributed 2.7 million; out of 350.0 million LED Bulbs distributed by EESL, Surya contributed 39.5 million; out of 7.0 million LED Tube Lights distributed by EESL, Surya contributed 2.6 million. This segment is going to play a very important role in giving a very high surge to LED business in India.

Highlights 2018-19

Ranked amongst the most respectful and trusted brand for lighting product in India and awarded with ‘Brand Excellence Award in Lighting Category in North India Best Brand Awards, 2018; also awarded with Champions of Rural Market award from the prestigious newspaper The Economic Times

Incorporated a wholly owned subsidiary namely ‘Surya Roshni LED Lighting Projects Limited on 21st January 2019 as SPV for implementation of Greenfield Public Street Lighting Systems in the State of Odisha under LOA for 59 crore

Received orders from EESL aggregated to 255.18 crore for supply of LED Lightings

Innovation-driven offerings

The past three years have witnessed radical changes through de-growth in conventional lighting products, stabilisation in LED prices and fast phasing out of CFL, leading to exponential growth in LED Lighting. The Companys R&D centre, STIC, is one of the best lighting R&D Centres in Asia that delivers innovation and best-in-class environmental friendly LEDs. The centre is equipped with Mirror Gonio-photometer from LMT-Germany, used for developing new generation energy saving luminaries. In addition, the Company also provides Photometric Optical Testing facility for all kinds of luminaries. Some of the innovative offerings include:

High-beam angle LED lamps

Colour changer LED lamps

New range downlighters and LED battens

LED torch with dry cell battery & rechargeable

Rechargeable lantern

Solar LEDs


• LED wall lights

• Smart motion-sensor LEDs

• Auto-dimming LEDs



The Companys fan business has evolved strongly since its entry into the market in 2014. Within a short time-span, it has achieved sixth ranking in the organised fan segment. Staying relevant to the markets, the Company constantly innovated to launch a wide category of designer and colourful ceiling, pedestal and wall mounting fans along with a wide range of domestic exhaust fans. It has been further expanding its base in this category by launching new variants of energy efficient fans, plated fans, kids fans and under-lite fans, among others.

Home Appliances


The Company expanded its Consumer Durables portfolio to include other contemporary electrical appliances (mainly brown goods) like - water heaters, room heaters, dry irons, steam irons and immersion heater and kitchen appliances like mixer grinder, induction cookers and toasters, among others. The Company would leverage its existing distribution strength to penetrate deeper into the home appliances segment. During the year, division has achieved a growth of 35% and has successfully launched range of glass cooktops.

PVC Pipes


The Companys inhouse manufacturing unit develops range of PVC pipes which find its applications across water management, housing sector, agriculture & irrigation system, domestic & industrial drainage system - cold/hot water plumbing, industrial process lines, swimming pool and salt water lines, among others. With capacities in place, the Company stands to benefit from the sizeable business opportunity derived out of the Governments mission to provide access to drinking water under the newly launched ‘Har Ghar Nal Ka Jal by 2024 under the Jal Jeevan Mission.

Opportunities and demand drivers

Macro-economic fundamentals

According to a World Economic Forim Report, India is poised to become the third-largest consumer market after US and China. The consumer spending in is expected to grow from USD 1.5 trillion at present to nearly USD 5 trillion by 2025. Indias top 40 cities will form a USD 1.5 trillion opportunity by 2030, many thousands of small urban towns will also drive an equally large spend in aggregate. In parallel, there will be an opportunity to unlock nearly USD 1.2 trillion of spend in developed rural areas by improving infrastructure and providing access to organised and online retail. These factors will strongly drive the need of consumer durables.

Government initiatives

Under the government energy efficiency programmes, more than 21 crore LED lights were distributed in the nation which brought about savings of 11,000 crore for the buyers with reduction in the electricity bills. The Government has reduced the prices of LED bulbs to encourage the affordability of the less power consuming lights. Moving forward, Under Domestic Efficiency Lighting Program, the government wants to replace all the 77-crore conventional bulb sold in India with LED bulb.

Organised sector growth

Improved GST collection growth is an evident proof that the government has been successful in the formalisation of the economy. This is adding up to the growth in lighting, fans and home appliances space for organised sector, as the price differential with the unorganised segment is gradually reducing.

Rising disposable income and easy access to credit

Rising Disposable income and easy access to credit influences consumers buying decision. Lenders kiosks have been set up in almost every electronic outlet in India in a bid to encourage aspirational and price-sensitive consumers to buy products at minimal or no interest costs without furnishing any collateral that makes it significantly hassle free to own these goods.

Growing real estate segment

With the implementation of affordable housing, RERA, rising tourism, changing buying behaviour and improvisation in literacy rate has led to growth in the residential, retail, hospitality and commercial space which will ultimately drive the demand for lighting and consumer durable industry.

Energy efficiency and premiumisation The market for energy-efficient products, for example, LED lighting is going to develop with riding on the initiative that encourage the utilisation of LED lights. As, LED is not only having longer life span, but it tends to operate well at different temperature. Further the attention on smart city projects, and changing lifestyle of the consumer along with rising disposable income will also play a vital role in purchase of premium product. India being the second most populous country in the world and still it is only the fifth largest electricity consumer - a situation that has led to a widening demand-supply gap. With young and working population this demand-supply gap is going close with rise in the usage for home appliances.

Rural India

The Governments initiatives like ‘Housing for All, rural electrification and ‘Power For All have been able to cover the previously underserved/unserved regions of India pretty considerably. Schemes like ‘Saubhagya plan to ensure power supply to unelectrified household and ‘Deen Dayal Upadhyaya Gram Jyoti Yojana to strengthen the electricity infrastructure in rural areas will help the company in the lighting segment. This has resultantly led to a shift of source of lighting from kerosene to bulb/LED. Rural Indian household have enough surplus to purchase the fan. Further to this, major fan sales happened in 20022006. This will lead to strong replacement demand as life span of the fan is 10-15 years.

Increasing use of plastic money

The growing use of ‘plastic money i.e. credit and debit cards has resulted in an increased spending amongst the consumers thereby fuelling the demand in the durables sector. With the acceptance of plastic money by almost all the retailers in the organised segment, the number of outstanding plastic cards in the country is on a rise. The incentives such as cash-back offer or discounts on selected sales linked to the plastic money have lured the Indian consumer to experience the pleasure of ‘cashless shopping. Also, with year round discounts on e-commerce, reduced tax rates and advancements in technology at lower costs, demand is further expected to get a boost.


For Surya Roshni, customer experience encompasses every aspect of a companys offering- be it product, innovation, reach, quality, brand, packaging and reliability. With strong foothold in rural and semi urban areas, the Company will look forward to accelerate growth by introducing more value-added premium range of LED Down-lighters, Battens, Lamps, Street Lights, Fittings and other decorative luminaires. Besides, it will leverage the technology to deliver efficient smart lighting products which will drive novelty to an indispensable daily companion through smart control devices.


Brand: Surya Roshni has established its reputation as one of the most reliable and credible brands of India as well as worldwide markets. The ‘Prakash Surya brand for the Steel Pipes and Strips segment goes synonymous with quality and robustness. While ‘Surya brand caters to lighting and customer durables segment, that has gradually captured the consumers mindshare. Post GST implementation there has been a strong emphasis on the organised segment. Besides this, the Company has been consistently spending on its brand visibility by means of advertisements, hoardings and team jersey sponsorship for Rajasthan Royals in the recently concluded IPL 2019. Localisation: To become a manufacturing nation, it is important for India to encourage localised production. With Governments ‘Make in India initiative, there has been a strong boost to the domestic made products. Surya Roshni stands to benefit directly owing to its reputation and strong manufacturing forte in delivering world-class products across both its business segments.

Locational advantage (Steel Pipes): The Company enjoys locational advantage with its plant strategically located near ports, national highway and across PAN India which will save the logistic cost for the Company. Also, it will ensure quicker delivery of products to the customers in the nearby vicinity.

Location Advantage
Bahadurgarh Proximity to adjacent markets of North India, largely to the autocomponents Segment
Anjar Proximity to ports
Hindupur Proximity to South Indian market
Gwalior Proximity to UP,

MP, Rajasthan and Chhattisgarh

Quality: The Company has acquired quality certifications from the leading international agencies and has consistently built a track record of good quality outcome, best after sales services and healthy client relations. With ISO 9002:2008, ISO 14001:2004 & OHSAS18001:2007 accreditations added to its repertoire, the Company stands tall on its promise to deliver environment friendly and quality items.

Strong Distribution network (Lighting and Consumer Durables): The Company enjoys a Pan-India presence for its products through its wide network of over 2,500 distributors and 2,50,000 country wide retailers. This allows the Company to penetrate deeper into the Indian markets, including the rural areas and enhance its market share.

Raw Materials: The Company sources its raw material from reputed quality vendors like SAIL, JSW, Hindustan Zinc, Tata Steel and Essar Steel. The Company also imports HR Coils in super EDD grade & higher elongation from Posco, Angang, Sngang and Zaporzhstal, as per the requirements from the client.

Experiences: The Companys management has over four decades of experience in the Steel Pipe Industry and nearly three decades of experience in the Lighting industry, thus bringing in the necessary experience and expertise that drives the future vision of the Company.

Financial Review

(Rs. in crore)


Particulars 2018 - 19 2017 - 18 2018 - 19
Revenue from Operations 5,977.04 5,011.76 5,975.04
Other Income 4.11 2.66 4.11
Total Revenue 5,981.15 5,014.42 5,979.15
EBITDA 376.16 348.59 376.07
Finance costs 115.07 105.16 115.08
Cash Profit 261.09 243.43 260.99
Depreciation and amortisation expenses 88.51 87.31 88.51
Net Profit Before Tax 172.58 156.12 172.48
Tax Expenses 51.70 48.08 51.67
Net Profit After Tax 120.88 108.04 120.81
Other Comprehensive Income (3.15) (3.72) (3.15)
Total Comprehensive Income 117.73 104.32 117.66
EPS 22.22 19.86 22.20

The Company maintained its leadership in the manufacturing of ERW Gl Steel Pipes & Strips and continued to be a strong contender in the Lighting industry.

In the fiscal year under review:

The revenue from the Companys operations registered an increase of 19.26% and was reported at 5,977.04 crore as compared to 5,011.76 crore in the previous year.

EBITDA increased 7.90% to 376.16 crore as compared to 348.59 crore in the previous year

Profit before tax increased 10.54% to 172.58 crore as compared to 156.12 crore in the previous year

Profit after tax increased 11.87% to 120.88 crore as compared to 108.04 crore in the previous year

Key Financial Ratios


Particulars 2018 - 19 2017 - 18 2018 - 19
Debtors Turnover (Days)$ 54 52 54
Inventory Turnover (Days)$$ 52 60 52
Interest Coverage Ratio & 3.27 3.31 3.27
Current Ratio* 1.33 1.33 1.33
Debt Equity Ratio** 1.03 1.05 1.03
Operating profit margin (%) # 6.22% 7.02% 6.23%
Net Profit profit margin (%) 2.02% 2.16% 2.02%
Return on Net Worth @ 10.99% 10.81% 10.99%

$ Debtors (including unbilled revenue and non current receivables) / (Revenue from operations / 365)

$$ Inventory / (Revenue from operations / 365)

& Interest (Finance cost) / EBIDTA

* Current Assets / Current Liabilities (including Current maturity of long term borrowings)

** Debt (Working capital + Long Term Debts including Current maturity of long term loans) / Equity

#Operating profit (excluding other income) / Revenue from operation

@ Profit for the year / Average Net Worth

There are no significant changes in the key financial ratios and return on Net worth as compared to immediately previous financial year.

The overall performance is the result of operational excellence in both the segments which also improved ROCE and ROE.

Note: 1. Consolidated figures and ratios of previous year are not applicable since the sole subsidiary was incorporated on 21st January, 2019.

Credit Ratings: The Companys credit rating has improved consistently over the past few years and at present has A+ rating for long-term bank facilities. The CP rating of the company (A1+SO) reflects relatively stronger credit quality and higher degree of safety regarding timely payment of financial obligations.

Risk Management

Like any other business organisation, the Company is exposed to internal as well as external risks, categorised into operational, financial, regulatory etc. The Companys robust Risk Management Policy is adopted to build a strong mitigation network. The key objective of the policy is to ensure sustainable business growth with stability and to promote an upbeat approach towards risk management and mitigation. The key objectives include:

Identification of the current and future material risk exposures of the Company and ensure they are appropriately mitigated, minimised and managed. Protecting brand value through strategic control and operational policies

Establishing framework for the Companys risk management process and to ensure company-wide implementation

Ensuring systematic and uniform assessment of risks related to different functions of the Company wherever applicable, through the adoption of best practices

The Company has laid down a strong foundation for a successful risk management process. The key roles and responsibilities around major business processes are assigned to process owners. The major steps in the Risk framework include:

a. identification of risks under various categories like operational, financial, regulatory, technological and related to human resources

b. assessment of risks in terms of severity of impact and likelihood of occurrence,

c. assignment of responsibilities,

d. development of mitigation plans which create value for business and

e. monitoring and reporting.

The Board of the Company periodically reviews and evaluates the risk management system of the Company so that the management controls the risks through a properly defined network. The Head of the Departments shall be responsible for implementation of the risk management system as may be applicable to their respective areas of functioning and report to the Board and Audit Committee. No risks threatening the existence of the organisation have been identified. However, there are other risks against which adequate mitigation plans are prepared. Following are some risks and their mitigation measures:

Technology Risk The ever-evolving technology with continuous updation may lead to product obsolescence, if not addressed regularly. The Company makes all efforts in innovating and staying abreast with the best technological know how and development of new products. The Company has state-of-the-art R&D facilities in Lighting segment. In Steel business, the experienced team of technical staff takes care of development of products. Regular updation takes place in both businesses to achieve best quality at competitive costing.
Financial Risk The policy rates have started showing increasing trend in view of inflationary pressures, which may impact profitability. As the credit rating of the Company has improved consistently over the last three years, the impact will be restricted. The Company has always been exploring cheaper financial products like commercial papers, WCDL, Export Packing Credit, Foreign Currency Loan at lower spread (Fully Hedged), to keep the cost of funds to minimum level.
Regulatory Risk Non-compliance to stringent regulatory and environment norms may result in liabilities and loss of brand reputation. The Company strictly complies with all statutes applicable to its operations. There are trained staff members entrusted with regulatory responsibilities which are monitored and reported at the highest levels. The Company also uses services of legal and regulatory consultants.
Forex Fluctuation Risk The Company deals in exports / imports of products in business and borrowings which are subjected to currency fluctuations. To counter exposure to foreign exchange volatility, the Company has formulated foreign exchange hedging policy to protect the trading and manufacturing margins by 100% hedging against forex.
Human Resources Risk The Company needs adequate talent to run the business. There is a risk labour unrest and maintaining good industrial relations. The Company has developed and acquired trained manpower to run its operations. The company periodically reviews its senior management team to ensure continuity in leadership. The HR policies ensure to attract and retain the best talents and maintain attrition at low level. The industrial relations are managed through incentivising, training and counselling of labour. The Company Board has also approved ESOP scheme.
Commodity Price Risk Company sources several commodities for use as inputs in its businesses and their price fluctuations may lead to losses. In order to manage the Commodity Price Risk, company has a comprehensive risk assessment framework to manage the risks arising out of the inherent price volatility associated with commodities. This includes robust mechanisms for monitoring market dynamics on an ongoing basis towards making informed sourcing decisions and continuous tracking of positions.

Further, the Company has in place a mechanism whereby the Audit Committee of the Board defines risk exposures, measuring them and defining appropriate actions to control the risk.

Internal control systems

The Company has a proper and adequate system of internal control system commensurate with the size and nature of business. It is an integral component of the Companys corporate governance. The Company has in place a strong and independent Internal Audit Department responsible for assessing and improving the effectiveness of internal control and governance. Internal Audit focuses on operational as well as systems audit. The function is also strengthened by hiring the expert professionals. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee. Extensive programme of risk and transaction based internal audits cover all divisions, plants, branches and the different areas of operations. The Audit Committee of the Board is updated periodically on major internal audit observations, compliances with accounting standards, risk management and control systems. The Audit Committee assesses the adequacy and effectiveness of inputs given by the internal audit and suggests improvement for strengthening the control systems. Further, the Company has an extensive budgetary control system, which is regularly examined by the management. Surya Roshni has well defined Management Information System with clear organisational structures and authorisation levels for business transactions. The Companys internal financial controls are adequate and operate effectively which ensures orderly and efficient conduct of its business, including adherence to its policies, safeguard its assets, prevent and detect frauds & errors, maintain accuracy and completeness of its accounting records and further enable it in the timely preparation of reliable financial information. Surya also undertakes external audit for efficient audit and control for its branches and depots and also for specialised functions like taxation.

Material developments in human resources/industrial relations

Surya Roshni recognises the importance of its human capital and continues to focus on holistic human resource development. The Company firmly believes that engaged and competent employees are critical to fulfil its business objectives and hence, all HR initiatives are aimed at creating alignment and stimulation so that employees can fulfil their potential and deliver value to the Company.

The Company continuously aims to offer career advancement and growth opportunities to its people. The employee friendly HR policies create an environment of learning and development, while promoting internal talent and developing cross-functional expertise. The Company

has embarked on several human resource initiatives to enhance organisational productivity and that of each individual. It has also invested a high emphasis on driving an effective and transparent performance culture. Top performers and achievers are recognised in the ‘Surya Parivar for their exemplary performance in the rewards and recognition program.

The Company continued to maintain amicable industrial relations by focusing on increased worker-level engagement through formal and informal communication and training forums. As on 31st March 2019, the Company had direct 3,539 employees on its payroll.

Corporate Social Responsibility

The CSR movement in Surya Roshni is based on the core belief of compliance of social and ecological responsibilities. Corporate social responsibility is basically a continuous ongoing process whereby the Company contributes to the betterment of society and a cleaner and greener environment.

The key objectives of Surya Roshni CSR policy are mentioned in Annexure V to Boards Report. To attain the Companys Corporate Social Responsibility objectives in a professional and integrated manner, the Company discharged its responsibilities through the Surya Foundation. In pursuance of this objective, the Foundation is working in the areas of Adarsh Gram Yojana, development of preventive and cost effective health systems of naturopathy and yoga and Ideal Village Projects with emphasis on Literacy and Personality Development of Youth.

During the year under review, the Company on consolidated basis spent 2.57 crore on corporate social activities, being two percent of the average net profits of the company made during the three immediately preceding financial years.

Cautionary statement

This report contains forward-looking statements about the business, financial performance, skills and prospects of the Company. Statements about the plans, intentions, expectations, beliefs, estimates, predictions or similar expressions for future are forward-looking statements. Forward-looking statements should be viewed in the context of many risk issues and events that could cause the actual performance to be different from that contemplated in the Directors Report and Management Discussions and Analysis Report, including, but not limited to, the impact of changes in oil, steel prices worldwide, technological obsolescence and domestic, economic and political conditions. The Company cannot assure that the outcome of these forward-looking statements will be realised. The Company disclaims any duty to update the information given in the aforesaid reports.