SHYAMMETL - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:16 pm

Fundamental Rating: 3.3

📊 Financials: Shyam Metalics has a market cap of ₹22,925 Cr. Current price is ₹821 with a 52-week high/low of ₹1,001/₹628. PAT this quarter is ₹136 Cr vs ₹168 Cr in the previous quarter, showing decline. ROCE at 12.0% and ROE at 8.48% reflect moderate efficiency. Debt-to-equity ratio of 0.05 indicates a very strong balance sheet with minimal leverage.

💹 Valuation: Stock P/E is 44.0, more than double the industry PE of 20.6, suggesting overvaluation. Book value is ₹222, giving a P/B ratio of ~3.7. PEG ratio at -2.94 indicates weak earnings growth relative to valuation. EPS is ₹18.7, showing profitability but not aligned with premium multiples. Dividend yield of 0.55% adds limited shareholder return.

🏭 Business Model: Shyam Metalics operates in steel, ferro alloys, and energy. Competitive advantage lies in integrated operations, cost efficiency, and diversified product base. However, cyclical demand in metals impacts profitability consistency, and margins remain under pressure.

📈 Entry Zone: Technically, DMA 50 (₹846) and DMA 200 (₹862) are above current price, showing bearish trend. Entry is favorable near ₹780–₹820 if price consolidates. Current RSI at 39.6 indicates mildly oversold conditions, offering potential accumulation opportunity.

🕰️ Long-Term Holding: Strong balance sheet and integrated operations support long-term compounding, but stretched valuations and weak return ratios limit attractiveness. Investors should accumulate cautiously on dips closer to intrinsic value zones.

Positive

• ✅ Low debt-to-equity ratio (0.05)
• ✅ Integrated operations in steel and ferro alloys
• ✅ FII holding increased (+0.44%)

Limitation

• ⚠️ High P/E (44.0) vs industry PE (20.6)
• ⚠️ Weak ROCE (12.0%) and ROE (8.48%)
• ⚠️ PEG ratio negative (-2.94)
• ⚠️ Quarterly PAT decline (168 Cr → 136 Cr)

Company Negative News

• 📉 DII holding reduced (-0.09%)
• 📉 Bearish technical trend (MACD -15.1)

Company Positive News

• 📈 FII inflows (+0.44%)
• 📈 Strong balance sheet with minimal debt

Industry

• 🏭 Steel and ferro alloys industry PE at 20.6 highlights fair sector valuation
• 🏭 Sector supported by infrastructure and industrial demand

Conclusion

🔎 Shyam Metalics is financially stable with low debt and integrated operations, but weak return ratios and stretched valuations limit attractiveness. Entry zone lies near ₹780–₹820. Long-term investors can accumulate cautiously on dips, while monitoring profitability trends and cyclical risks in the metals sector.

Would you like me to extend this with a peer benchmarking overlay comparing Shyam Metalics against other steel and alloy producers, or a sector scan to highlight undervalued players in the metals industry?