SHYAMMETL - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 05 Nov 25, 7:43 am

Fundamental Rating: 3.6

🔧 Shyam Metalics shows solid financial discipline and improving earnings, but high valuation and weak return metrics temper long-term conviction.

📈 Positive

• Low Leverage: Debt-to-equity ratio of 0.03 reflects strong financial health.
• Quarterly Profit Growth: PAT rose from ₹99.5 Cr. to ₹168 Cr., a 2.94% increase.
• EPS Strength: ₹17.7 supports long-term earnings visibility.
• FII Interest: FII holdings increased by 0.44%, indicating foreign investor confidence.
• Dividend Yield: 0.50% offers modest income for shareholders.

⚠️ Limitation

• High Valuation: P/E of 49.5 is more than double the industry average of 24.0.
• Weak Return Metrics: ROCE at 12.0% and ROE at 8.48% suggest moderate capital efficiency.
• Negative PEG Ratio: -3.31 implies valuation may not be supported by growth.
• Technical Weakness: RSI at 44.8 and MACD at -5.29 indicate bearish momentum.
• Volume Drop: Current volume significantly below weekly average, signaling reduced interest.

📉 Company Negative News

• Stock trading below 50 DMA and near 200 DMA, reflecting technical softness.
• Decline in DII holdings (-0.09%) suggests cautious domestic sentiment.

📈 Company Positive News

• Strong YoY performance driven by higher steel and ferro alloy demand.
• Expansion into aluminum foil and captive power enhances vertical integration.
• Analysts remain optimistic on long-term infrastructure-led demand.

🏭 Industry

• Steel and metal sector benefits from infrastructure push and manufacturing growth.
• Industry P/E of 24.0 reflects moderate valuation norms.
• Peers include Jindal Stainless, Tata Steel, and JSW Steel.

🧾 Conclusion

• Entry Zone: ₹820–₹850 could be a favorable accumulation range based on RSI and support levels.
• Long-Term View: Hold for 3–5 years; monitor margin expansion and valuation compression.
• Valuation Watch: Consider phased entry or wait for earnings catch-up to justify current price.