India’s iron and steel industry is an important sector, accounting for over 2% of GDP and employing over 6 million people. It produces over 100 million tons of steel each year, making it the world’s second-largest manufacturer. The industry benefits the infrastructure, automotive, and construction industries.
With a market capitalization of Rs 23,223.77 crore, the shares of Shyam Metalics and Energy Ltd were trading at Rs 832.00 per share, increasing around 3 percent as compared to the previous closing price of Rs 809.35 apiece.
Financial performance:-
Examining the company’s financial performance, revenue magnified 8 percent from Rs 3,333 crore in Q1FY24 to Rs 3,612 crore in Q1FY25, during the same time frame net profit zoomed 37 percent from Rs 202 crore to Rs 278 crore.
Brokerage Target:-
UBS, one of the well-known brokerages globally, gave a ‘Buy’ call on the iron stock with a target price of Rs 1,200, indicating a potential upside of 44 percent from Friday’s price of Rs 832.00 per share.
Also Read
Rational:-
According to the brokerage, Shyam Metalics and Energy Ltd joined the aluminum and stainless steel markets, demonstrating execution visibility, while additional projects that will begin later in FY25/26 give great profits visibility.
UBS said that the firm is transitioning from producing commoditized products to value-added offerings, such as sponge iron and battery-grade aluminum foil. As a result, the firm is predicted to have higher margins, less exposure to commodity price fluctuations, and a higher return ratio.
UBS anticipates robust profit acceleration for Shyam Metalics after the Rs 10,000 crore expenditure plan for FY22-27, which would be financed by internal accruals and current cash. The capex plan includes several projects, products, and efficiency improvements, which reduces profit-risk in the event of project delays.
Moreover, the brokerage is also expecting new projects to come in line by FY27 with Rs 2,500 crore to be capitalized in FY25 and the balance of Rs 4,900 crore in FY26 and FY27.
Recent milestone:-
Furthermore, Shyam Metalics and Energy Ltd finalized its first 20.43 MW out of the announced 100 MW renewable energy implementation at their manufacturing facilities & office. This project is bifurcated into three phases with a capital investment of Rs 50 crore for developing 10 MW in the first 2 Phases & 10.43 MW in the 3 Phase.
Company profile:-
Shyam Metalics and Energy Ltd manufactures and sells ferroalloys, iron, and steel products, in addition to power generation. Its product offerings include iron pellets, sponge iron, billets, thermo-mechanically treated (TMT) bars, structural steel, wire rods, power, ferroalloys, and aluminum foil.
Written by:- Abhishek Singh
Also Read
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
