The company has discussed with its business reorganization committee to come up with alternative strategies of re-organization, separation of its two business verticals as the two businesses are not inter-related and have different business dynamics. Surya Roshni has indicated that it plans to separate its two business verticals – Lighting and Consumer Durables and Steel Pipes & Strips, in a recent BSE filing.
The talks of de-merger of its Lighting and Consumer Durables business have been going on for a couple of years. Although, subdued performance of its Steel Pipes & Strips division was a concern, which kind of prevented a smooth demerger.
As a result, in 2016 the company merged its associate company, Surya Global Steel Tubes (SGSTL) in its Steel division. SGSTL is an exports-focused unit with cost advantages over others, and hence, the merger is expected to improve margin and returns of its steel business as well. It is also believed that the de-merger will prove beneficial for both the verticals, as they will be able to focus on their core competencies and help them follow an independent growth trajectory.
The Lighting and Consumer Durables division also includes appliances such as fans, kitchen appliances, etc. During FY17, the volume growth in LED business was 77% yoy, whereas the fan and home appliances business grew by 55% yoy. In FY17, the fans segment had 3% market share of the total Indian fan market and achieved sales of Rs. 180cr in FY17. Surya Roshni has wide spread market network of over 2,000 distributors and 2 lakh countrywide retailers across PAN India and exports to over 25 countries globally, across the Middle East, Europe, Africa and Asia.
