SHYAMMETL - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 4.1

📊 Long-Term Investment Analysis

Shyam Metalics & Energy Ltd (SHYAMMETL) is a mid-to-large cap player in the steel and ferro alloys segment. It has shown strong price momentum and operational efficiency, but valuation and growth metrics suggest a balanced approach for long-term investors.

✅ Strengths

Debt-Free: Debt-to-equity ratio of just 0.07 is excellent for a capital-intensive industry

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ROCE & ROE: ROCE at 12.0% and ROE at 8.99% are decent, though not exceptional

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Consistent Profitability: PAT has grown steadily, with a recent quarterly profit of ₹291 Cr

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Dividend Yield: 0.45% with a payout ratio of ~15%, indicating room for future increases

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Promoter Holding: Strong at 74.59%, showing long-term commitment

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Price Momentum: RSI at 75 and MACD positive suggest bullish sentiment, though nearing overbought territory.

⚠️ Concerns

Valuation: P/E of 30.1 is above industry average (23.8), indicating overvaluation

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PEG Ratio: Negative at -1.56, suggesting earnings growth may not justify current valuation.

Volume Decline: Current volume is below 1-week average, hinting at reduced short-term interest.

FII Outflow: Slight decline in FII holding (-0.54%) may reflect cautious sentiment.

💰 Ideal Entry Price Zone

Based on intrinsic valuation and technical support

Intrinsic Value Estimate: ₹656.92 (DCF) to ₹1,271.61 (relative valuation)

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Current Price: ₹992

DMA 50/200: ₹887 / ₹828

Suggested Entry Zone: ₹850–₹900 This range offers a better margin of safety and aligns with technical support levels and valuation models.

🧭 Exit Strategy & Holding Period

📈 Holding Strategy

Time Horizon: 3–5 years to benefit from infrastructure demand and steel sector tailwinds.

Growth Targets

2025: ₹1,123–₹1,150

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2026: ₹1,481–₹1,600

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2027: ₹1,950–₹2,100

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🚪 Exit Strategy

Partial Exit: If price exceeds ₹1,500 by 2026–2027, consider booking profits.

Trailing Stop: Use a stop-loss below ₹880 if price momentum weakens.

Re-evaluate: If ROE stagnates below 9% and PEG remains negative, consider switching to higher-growth peers like APL Apollo or Jindal Steel

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Would you like a comparison table of top-performing steel stocks to see how SHYAMMETL stacks up against its peers?

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stockanalysis.com

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www.screener.in

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www.alphaspread.com

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dailybulls.in

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walletinvestor.com

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