Shyam Metalics Q4 Review - Surpasses Estimates; Capacity Ramp-Up To Maintain Momentum: ICICI Securities

ICICI Securities Report

Shyam Metalics and Energy Ltd.’s Q4 FY24 Ebitda was 7% ahead of our estimates. Key points:

1. Rolled steel sales volume rose 12% YoY to the highest-ever level of 381.3 kt;

2. realisation was down QoQ across all categories except pellets;

3. Ebitda margin was stable QoQ at 12.2%;

4. further capex of Rs 8.1 billion was announced in aluminium and stainless steel; and

5. Board approved dividend of Rs 2.7/share.

Going ahead, we expect Shyam Metalics to deliver Ebitda compound annual growth rate of 46% through to FY26E led by capacity ramp-up in carbon steel and stainless segments.

Besides, commissioning of colour-coated sheets and pig iron capacity is also on the anvil in FY25E.

We maintain BUY on Shyam Metalics with an unchanged target price of Rs 825 based on 6.5 times FY26E Ebitda.

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