Surya Roshni Limited's Board of Directors has addressed a compliance matter concerning the delayed appointment of an independent director, which resulted in regulatory penalties from both major stock exchanges.

Independent Director Appointment Details

The company appointed Mr. Ravi Kant Gupta (DIN: 03111902) as an Additional Director (Non-Executive; Independent) on July 17, 2025, for a period of five consecutive years. This appointment was subsequently approved by shareholders at the Annual General Meeting held on September 18, 2025.

Regulatory Non-Compliance and Penalties

Both NSE and BSE identified non-compliance with Regulation 17(1) of the Listing Regulations and imposed penalties on the company. The exchanges issued communications on November 28, 2025, imposing fines for the delayed compliance.

The company has already paid the imposed fines of Rs. 80,000 to each exchange as a mark of adopting good governance practices.

Previous Compliance Issues

This was not the first instance of such non-compliance. The exchanges had earlier imposed fines of Rs. 2,80,000 each for 56 days of delayed compliance for the quarter ended June 30, 2025. These fines were subsequently paid to the exchanges and the matter was placed before the Board Meeting dated November 11, 2025.

Board Comments and Justification

At the Board meeting held on February 11, 2026, the directors reviewed the matter and provided their observations. The Board clarified that the delay was purely inadvertent, without any mala fide intent, and stemmed from genuine challenges in the candidate selection process.

The company emphasized that identifying a suitable candidate required finding an individual who:

• Meets all regulatory requirements
• Possesses the necessary stature and independence
• Has the integrity required to contribute meaningfully to company governance

Given the size and nature of the company, the Board stated that this identification process required reasonable time and diligence.

Waiver Applications and Future Actions

Surya Roshni Limited has filed waiver applications for the imposed fines with both exchanges, particularly with BSE as per the Policy for exemption of fines under SEBI SOP Circular No. SEBI/HO/CFD/CMD/CIR/P/2020/12 dated January 22, 2020.

The Board has also deliberated on seeking requisite remedy under SEBI laws in case the waiver requests are not accepted by the exchanges. The company submitted multiple communications to both exchanges on November 29, 2025, December 4, 2025, and December 5, 2025, explaining the circumstances of the delay.

Surya Roshni Limited conducted its Q3FY26 earnings conference call on February 11, 2026, where management discussed quarterly performance and provided forward-looking guidance for FY27. The call was led by Managing Director Raju Bista alongside senior leadership team including CFO B.B. Singal and divisional CEOs.

Q3FY26 Financial Performance Overview

The company reported consolidated revenue of ₹1,927 crore for Q3FY26, representing a 3% year-on-year increase from ₹1,868 crore in Q3FY25. EBITDA stood at ₹148 crore with margins of 7.7%, while profit after tax declined to ₹80 crore from ₹90 crore in the corresponding quarter of the previous year.

For the nine-month period ended December 2025, consolidated revenue reached ₹5,377 crore compared to ₹5,290 crore in the corresponding period of FY25, reflecting 2% growth. The company maintained its zero-debt status with a net cash surplus of ₹245 crore as of December 31, 2025.

Steel Pipes and Strips Segment Analysis

The Steel Pipes and Strips segment reported revenue of ₹1,451 crore in Q3FY26, up 2% from ₹1,417 crore in Q3FY25, with dispatch volumes of 2.37 lakh tonnes. However, EBITDA margins faced pressure due to inventory losses of approximately ₹500 per tonne arising from steel price corrections during October-November.

Management highlighted that API segment volumes declined 35% year-on-year, impacting overall performance by ₹8-9 crore in EBITDA. However, hollow section and structural pipes showed strong momentum with 25% quarter-on-quarter growth, supported by infrastructure and industrial demand.

Lighting and Consumer Durables Performance

The Lighting and Consumer Durables segment delivered stable performance with revenue of ₹476 crore, representing 6% year-on-year growth and 10% sequential improvement over Q2FY26. The segment benefited from festive season demand and strong performance across consumer lighting categories.

Consumer lighting categories showed robust volume growth, with LED bulbs recording 37% growth, LED battens growing 16%, and downlighters registering 15% growth during the quarter. The newly launched wire business, introduced in August, has received strong market acceptance.

Strategic Developments and Order Book

A significant milestone was achieved with the successful manufacturing of API 5CT ERW casing pipes for ONGC, making Surya Roshni the first company in India to get ERW pipes approved as an alternative to seamless pipes. The company has already dispatched the first order of 4,500 tonnes.

The order book comprises spiral pipes, exports, and domestic API orders, providing strong revenue visibility for Q4FY26, which management expects to be the highest-volume quarter historically.

FY27 Guidance and Outlook

Management provided confident guidance for FY27, targeting volume growth of 17-18% in the steel division. Key projections include achieving 11 lakh tonnes volume with minimum EBITDA of ₹5,000 per tonne, translating to ₹540-550 crore EBITDA for the steel division alone.

For the lighting segment, management targets 15% growth with revenue reaching ₹2,100 crore and EBITDA of ₹200 crore. The company expects Q4FY26 EBITDA of ₹200-210 crore, including inventory gains of ₹40-45 crore from steel price recovery.

Capacity Expansion and Export Strategy

The company continues investing in capacity expansion across plants at Anjar, Gwalior, Bahadurgarh, and Hindupur, with ongoing CAPEX of ₹250 crore. Export volumes grew 9% year-on-year, accounting for 19% of total sales, with management focusing on Middle East and African markets to offset European quota restrictions.

Despite challenges from EU quotas and Carbon Border Adjustment Mechanism, management remains confident about export prospects, targeting diversification into new markets while maintaining competitive positioning in existing regions.