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Buy Shyam Metalics and Energy: target of Rs 400: ICICI Securities

ICICI Securities is bullish on Shyam Metalics and Energy recommended buy rating on the stock with a target price of Rs 400 in its research report dated March 17, 2022.

March 17, 2022 / 12:53 PM IST

"India’s specialty chemicals industry is a decadal growth opportunity and it is still not too late to participate in the value creation process. We prefer CRAMS/CSM players Navin Fluorine (Navin) and PI Industries (PI) as they provide long-term earnings visibility. We also like UPL due to robust growth outlook and reducing debt concerns and SRF due to rising contribution from the chemicals business," JM Financial research report.

 
 
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ICICI Securities research report on Shyam Metalics and Energy


Shyam Metalics and Energy Ltd (SMEL) has announced additional capex of ~Rs9.9bn over and above the existing committed capex of ~Rs30bn to be incurred over 3-4 years. The additional capex would be incurred to i) increase its pellet plant capacity by ~2.4mtpa (~1.2mtpa each at Jamuria and Sambalpur plant), ii) set up a coke oven plant with a capacity of ~0.45mtpa and iii) double captive railway siding capacities. The breakup of the capex is i) Rs3.6bn for pellet plant, ii) Rs4.5bn into coke oven plant and iii) Rs1.8bn for railway sidings. The capex will be funded through internal accruals. Further, the aluminium foil plant of ~40,000tpa capacity has also been commissioned in Mar’22. The pellet plant and coke oven plant are expected to be operational by Sep’23, while the rail sidings are expected to commission by Mar’23.



Outlook


We maintain BUY with a target price of Rs400/share.


More Info


At 12:49 hrs Shyam Metalics & Energy was quoting at Rs 342.10, up Rs 18.40, or 5.68 percent.


It has touched an intraday high of Rs 342.70 and an intraday low of Rs 327.80.


It was trading with volumes of 44,792 shares, compared to its thirty day average of shares, a decrease of percent.


In the previous trading session, the share closed up 4.98 percent or Rs 15.35 at Rs 323.70.


The share touched its 52-week high Rs 461.15 and 52-week low Rs 288.85 on 20 July, 2021 and 24 February, 2022, respectively.


Currently, it is trading 25.82 percent below its 52-week high and 18.44 percent above its 52-week low.


Market capitalisation stands at Rs 8,726.31 crore.


For all recommendations report, click here


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first published: Mar 17, 2022 12:53 pm