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| CMP = 232 |
Suraj Products Limited was incorporated in the year 1991 as Champion Cement Industries Limited. Subsequently in the year 2000 company has changed its name to Suraj Products Limited. Since 2002 the company has discontinued the cement manufacturing operation and diversified into manufacturing of metallic products. The company owns and operates only one manufacturing plant in Sundargarh, Odisha. Suraj Products Limited is engaged in production of sponge iron by direct reduction of iron ore, pig iron, ingots / billet, TMT bars and power generation. The company has installed a continuous casting machine for production of billets instead of ingots. At present, the company has an installed capacity to produce 36,000 MTPA of sponge iron, 24,000 MTPA of pig iron, 72,600 MTPA of billets, 72,600 MTPA of TMT bars and 9 MW of captive power generation capacity.
Investment Rationale
Positive long-term outlook for Steel Sector
India's steel demand remains one of the strongest globally and domestically steel demand is remaining resilient on the back of expansion in economic activity driven by infrastructure capex, housing, automobiles, and construction. Indian Steel Market size is expected to grow from 162.23 million tons in 2025 to 177.03 million tons in 2026 and is forecast to reach 273.88 million tons by 2031 at a 9.12% CAGR over 2026-2031.
India’s green steel demand is forecasted to climb from negligible levels today to 24 million tonnes (MT) by FY35, driven by the construction sector, infrastructure and automobiles.
https://www.ibef.org/industry/steel
The steel is a vital component for nation development. The various sectors that are expected to contribute to the growing demand - infrastructure, housing, smart cities, sagarmala projects, bridges, airports, industrial plants, buildings, automobiles, new roads and highways, railways, cargo terminals all are expected to create steel demand, this will augur well for steel industry.
Domestic steel consumption remained significantly below the global average. The per-capita consumption of steel touched 100 kgs in 2025, with the National Steel Policy targeting 160 kgs by FY31 consumption must grow annually. The real GDP needs to expand at a steady rate by bridging the challenges of regional imbalances. Odisha, Jharkhand, and Chhattisgarh account for over half of the steel production of the nation but these states per-capita consumption is lowest in the country.
International Expansion (Eco-friendly Green Steel)
In a significant move toward international expansion, Suraj Products Limited approved the incorporation of a wholly-owned subsidiary in the United Arab Emirates, specifically in Abu Dhabi, in 2024. Named “Suraj Iron & Steel Manufacturers LL.C. – S.P.C.” The facility aims to establish manufacturing operations for green iron and steel, aligning with global sustainability trends and expanding Suraj Products Limited’s footprint in the Middle East.
https://surajism.com/about/
The Abu Dhabi facility is expected to leverage advanced technologies to produce green iron and steel, aligning with the UAE’s Vision 2030 for sustainable industrial growth and reducing carbon emissions. This move will enable Suraj Products Limited to access Middle Eastern and global markets, particularly in construction and infrastructure, where demand for eco-friendly steel is rising.
The wholly owned Subsidiary of the company “Suraj Iron & Steel Manufacturers LL.C. - S.P.C.” has acquired 60910 Sq. Meter Land in in UAE at Industrial City of Abu-Dhabi on long term lease of 50 years for setting up the proposed green steel project.
https://www.bseindia.com/xml-data/corpfiling/AttachHis/b06a6cf5-f8e3-484f-af7f-84d2b9753f3e.pdf
Rs 7.46 crores arbitration award has been pronounced in favour of Suraj Products Limited.
https://www.bseindia.com/xml-data/corpfiling/AttachHis/4e46f87d-6cb7-427b-9de0-160cb53a0583.pdf
Suraj Products Ltd has transformed it self into vertically integrated steel manufacturer (sponge iron, pig iron, billets/ingots, TMT bars, captive power). The company is able to produce high quality products with cost advantage due to vertically integrated operations with capacity to manufacture sponge iron, pig iron, billets and TMT bars at single location.
The company has captive power plant of 9MW, it ensures availability of power at a competitive rate that positively impacts its cost structure owing to a highly power intensive nature of steel melting operation. However, power generated through captive power plant at a cheap rate meets the major part of its overall power requirement.
Suraj Products Ltd has fuel supply agreement in place, ~100% of the company’s total thermal coal requirements for manufacturing of sponge iron is met from the linkages obtained through auctions, keeping the landed cost of coal competitive and enhancing raw material security. The smaller kiln size of the company permits using low grade domestic thermal coal having lower calorific value, keeping production costs lower.
The favourable location of the plant in terms of proximity to major raw material sources (ore iron, coal and magnesium) is very positive for low cost production. Odisha has high quality iron ore deposits and it has the highest share in production of iron ore in India.
The company has installed beneficiation plant of 3,00,000 metric tonnes per annum capacity . The beneficiation plant will enable the company to improve the product quality with significant cost savings. The company has gradually changed in the product mix from sponge & pig iron to rolling mill, it allows the company to sell more TMT bars and value-added product.
Conclusion
We expect good growth in steel sector with growing demand in infrastructure, housing, roads, railways, bridges, airports, industrial plants, buildings, automobiles etc. Indian GDP is also estimated to grow continuously between 7 - 10 % for next 5-6 years.
Suraj Products Limited is one of the low cost steel producer company with several advantages like vertical integrated operation, coal linkage ensures raw material availability, location advantage for raw material and skilled manpower at low cost, low equity base, low debt, strong promoter holding and high growth company has good liquidity position and healthy cash generation from operations etc.
Suraj Products stock has seen good correction since last one and half year . It is giving excellent investment opportunity at cmp Rs 232. It can be bought within 20 % from cmp with 10 % allocation.
