Shares of Shyam Metalics and Energy Ltd experienced a significant drop of 16% in early trading on Friday, falling to Rs 655 from the previous close of Rs 780.30 on the BSE. The decline led to the company’s market cap dropping to Rs 22,107.24 crore. Despite this sharp fall, the stock showed resilience, recovering all losses and trading higher by 1.11% at Rs 789 by 9:45 AM.
With a turnover of Rs 17.46 crore and 2.52 lakh shares traded on the BSE, the stock’s performance underscores its high volatility, reflected in its one-year beta of 1.3.
Technical Analysis
Shyam Metalics shares are trading:
- Higher than: 5-day, 10-day, 20-day, 30-day, and 200-day moving averages.
- Lower than: 50-day and 100-day moving averages.
The Relative Strength Index (RSI) stands at 50.2, indicating a neutral zone where the stock is neither overbought nor oversold.
Performance Overview
- 1-Year Performance: Gained 20%.
- Year-to-Date Performance (2025): Up 7.52%.
Despite Friday’s decline, the stock has maintained a solid performance over the past year, supported by strong fundamentals and growth prospects.
Analyst Recommendations
ICICI Securities
- Price Target: Rs 975
- The brokerage maintains a buy call, citing robust growth potential in topline and margins.
B&K Securities
- Price Target: Rs 1,028
- Growth Projections:
- Revenue CAGR: 31% (FY24–FY27E).
- EBITDA Margins: >12%.
- Return on Equity (RoE): 17.5%.
- PBT CAGR: 48% (FY24–FY27E).
The firm highlighted Shyam Metalics’ focus on financing its capex cycle through internal accruals, a rare feat in the steel sector.
UBS
- Price Target: Rs 1,200
- UBS emphasizes the company’s Rs 10,000 crore capex plan for FY22–FY27, with Rs 5,000 crore incurred to date. The remaining capital work in progress (CWIP) will be completed in FY25–FY27, contributing significantly to operating profits.
Growth Drivers
- Capex Plan:
Shyam Metalics has outlined a massive Rs 10,000 crore capex plan, funded primarily through internal accruals, ensuring a stress-free balance sheet. - Product Portfolio Diversification:
The company’s offerings include iron pellets, sponge iron, billets, TMT bars, structural steel, wire rods, ferro alloys, aluminum, and power generation, catering to a diverse set of industries. - Sustainable Financing:
Unlike many steel sector peers, Shyam Metalics is financing its growth through internal cash flows, reducing reliance on debt. - Long-Term Outlook:
The capitalized projects in FY25–FY27 are expected to significantly boost operating profit, ensuring sustainable growth.
Key Data: Shyam Metalics at a Glance
| Metrics | Value |
|---|---|
| Market Cap | Rs 22,107.24 crore |
| 52-Week High | Rs 780.30 |
| Current Price | Rs 655 |
| 1-Year Beta | 1.3 |
| 1-Year Return | +20% |
| Year-to-Date Return (2025) | +7.52% |
| Price Targets | Rs 975 (ICICI), Rs 1,028 (B&K), Rs 1,200 (UBS) |
Analyst Insights
- Resilience in Volatility: The stock’s recovery from its early 16% drop to trading higher reflects its resilience and strong investor confidence.
- Technical Indicators: The mixed performance across moving averages signals a cautious near-term outlook, but long-term growth potential remains intact.
- Cautious Optimism: Analysts suggest that while the stock is trading near its critical support levels, sustained buying and future capex contributions could push it toward the upper price targets.
FAQs
Why did Shyam Metalics shares fall 16%?
The decline was due to heightened market volatility and selling pressure, which briefly impacted investor sentiment.
What is the outlook for Shyam Metalics stock?
Analysts are optimistic about the stock’s long-term prospects, with price targets ranging from Rs 975 to Rs 1,200, supported by robust growth projections.
What is the company’s capex plan?
Shyam Metalics has a Rs 10,000 crore capex plan for FY22–FY27, with Rs 5,000 crore already incurred and significant contributions expected in FY25–FY27.
What is the Relative Strength Index (RSI) for the stock?
The RSI is 50.2, indicating a neutral zone with no immediate overbought or oversold conditions.
How is the company financing its growth?
The company is funding its capex primarily through internal accruals and existing cash, ensuring a stress-free balance sheet.
What is the significance of moving averages for Shyam Metalics?
The stock is trading above its short-term and long-term moving averages but below the 50-day and 100-day averages, signaling cautious optimism.
Should I invest in Shyam Metalics now?
Analysts recommend a buy, but new positions should be taken with caution, considering the stock’s volatility and technical signals.
What industries does Shyam Metalics serve?
The company is involved in the production of ferro alloys, iron and steel products, power generation, and aluminum, catering to diverse industrial needs.
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