Surya Roshni may hit Rs 183 over next 12 months: Joshi

Mayuresh Joshi of Angel Broking told CNBC-TV18, "Clearly if you look at Surya Roshni, two major divisions at top rates from the lighting division and the steel division. The steel division has been a laggard for Surya Roshni with huge amount of debt on to its books and that is what probably affected their consolidated cash flows. However, the lighting industry has grown at a very decent pace and if one really assumes the lighting industry to grow at 22.6 percent on a CAGR basis in the next two years to touch an industry size of Rs 25,500 crore. Players like Surya Roshni have a long way to go. So, the lighting contributes around 40 percent of the consolidated top line for the company and the EBIT margins were around 9.7 - 9.9 percent are the testimony for the fact that once the volumes and the revenues from the LED part, specially the lighting division start increasing the EBIT margins would also start increasing.""With two lakh retailers and clearly if you are looking at the kind of lighting exposure to go up to 45 percent over the next two years with value adds like fans contributing Rs 250 crore from the Rs 60 crore that it has posted in FY'15. Other value added products like steam iron and other appliances contributing Rs 200 crore, we are probably looking at a healthy expansion on the EBITDA front and clearly in terms of even the topline, we are expecting a 6.2 percent top line grow to Rs 3,223 crore odd by end of FY'17 and the bottom line close to Rs 80 odd crore, a CAGR of around 21.6 percent," he said."If you look at Orient and other players as well it is attractively placed. So, our target price stands at Rs 183 over the next 12 months," he added.