⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
SHYAMMETL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.4
| Stock Code | SHYAMMETL | Market Cap | 23,607 Cr. | Current Price | 848 ₹ | High / Low | 1,001 ₹ |
| Stock P/E | 47.1 | Book Value | 222 ₹ | Dividend Yield | 0.53 % | ROCE | 12.0 % |
| ROE | 8.48 % | Face Value | 10.0 ₹ | DMA 50 | 831 ₹ | DMA 200 | 852 ₹ |
| Chg in FII Hold | -0.44 % | Chg in DII Hold | 0.23 % | PAT Qtr | 98.4 Cr. | PAT Prev Qtr | 136 Cr. |
| RSI | 56.3 | MACD | 4.72 | Volume | 83,620 | Avg Vol 1Wk | 3,71,153 |
| Low price | 662 ₹ | High price | 1,001 ₹ | PEG Ratio | -3.15 | Debt to equity | 0.05 |
| 52w Index | 54.9 % | Qtr Profit Var | -17.2 % | EPS | 18.0 ₹ | Industry PE | 18.7 |
📊 Core Financials
- Quarterly PAT at 98.4 Cr vs 136 Cr previously, showing earnings decline (-17.2%).
- ROE at 8.48% and ROCE at 12.0% reflect moderate capital efficiency.
- Debt-to-equity ratio at 0.05 indicates a very low leverage and strong balance sheet stability.
- EPS at 18.0 ₹ provides a reasonable earnings base, though growth momentum is weak.
💹 Valuation Indicators
- P/E ratio: 47.1, much higher than industry average of 18.7, suggesting overvaluation.
- P/B ratio: ~3.8 (848 ₹ / 222 ₹ book value), showing premium pricing.
- PEG ratio: -3.15, negative due to declining earnings, highlighting valuation risk.
- Intrinsic value appears lower than current price, limited margin of safety.
🏢 Business Model & Competitive Advantage
- Shyam Metalics operates in steel, ferro alloys, and power, with integrated operations providing cost advantages.
- Competitive advantage lies in diversified product portfolio and efficient manufacturing base.
- Exposure to cyclical steel demand impacts earnings stability.
📈 Entry Zone & Long-Term Guidance
- Entry zone: 800–830 ₹ range (near 50 DMA support at 831 ₹ and 200 DMA at 852 ₹).
- Long-term holding viable for investors seeking exposure to steel and alloys with low debt risk.
- Accumulation should be cautious due to profit decline and stretched valuations.
Positive
- Low debt-to-equity ratio (0.05), ensuring financial stability.
- DII holdings increased (+0.23%), showing domestic institutional support.
- Strong integrated operations across steel and alloys.
Limitation
- High P/E (47.1) compared to industry average (18.7).
- Weak ROE (8.48%) and ROCE (12.0%).
- Negative PEG ratio (-3.15) indicates poor growth-adjusted valuation.
Company Negative News
- Quarterly PAT declined (98.4 Cr vs 136 Cr).
- FII holdings decreased (-0.44%), showing reduced foreign investor confidence.
Company Positive News
- DII holdings increased slightly (+0.23%).
- Stock trading above 50 DMA (831 ₹), showing near-term technical support.
Industry
- Industry PE at 18.7, much lower than Shyam Metalics’ 47.1, highlighting sector undervaluation relative to Shyam.
- Steel and ferro alloys sector remains cyclical but benefits from infrastructure demand.
Conclusion
- Shyam Metalics is financially stable with low debt but faces weak profitability metrics.
- Valuations remain stretched, making accumulation near 800–830 ₹ more attractive.
- Best suited for long-term investors seeking steel sector exposure, but caution advised due to earnings decline and high valuation multiples.
I can also extend this into a peer comparison with Jindal Steel and Tata Steel to highlight how Shyam Metalics stacks up in valuation and profitability. Would you like me to draft that next?