ICICI Securities research report on Shyam Metalics and Energy
Shyam Metalics & Energy (SMEL) reported firm operating performance in Feb’24. Key points: 1) Volume grew across major products MoM despite less number of working days; 2) Realisation declined (MoM) for all the products except Aluminium foil; and 3) Implied revenue was down only 1.4% MoM as higher volume mitigated the impact of lower prices. Going ahead, we expect SMEL to gain from capacity ramp-up of steel and value-added products. Besides, the lower coal price is also expected to sustain the EBITDA margin in the range of 12-13%.
Outlook
Taking cognizance of lower pellet sales volume and prevailing prices, we lower our FY24E/FY25E EBITDA by 5%/10%. As a result, our revised TP works out to INR 815 (earlier INR 840). We maintain BUY.
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