1.At a Glance
If steel had a swagger, it would probably walk like Shyam Metalics right now. At ₹861 per share (as of November 7, 2025), the ₹24,021 crore market cap company just dropped a spicy Q2 FY26 result — revenue ₹4,457 crore, up 22.6% YoY, and PAT ₹262 crore, up 21.5%. The stock has been flexing quietly — 41% return in 3 years, though the last 3 months were a -9.64% cooling-off period. With ROCE at 12%, ROE at 8.99%, and debt/equity of 0.10, this steelmaker runs its furnaces with financial discipline hotter than its blast ovens.
CRISIL just upgraded the company’s rating toAA+ (Stable), and why not? Operating profit margin is a tidy 12.5%, and despite heavy capex, the interest coverage ratio is 8.4x. For a company that generates most of its power (83%) in-house at ₹2.4 per unit, the joke’s on every other industrialist paying ₹7 per unit to the grid. Shyam Metalics isn’t just melting iron anymore; it’s melting the stereotype of a sleepy steelmaker.
2.Introduction
Steel companies in India usually have two moods: “expansion under construction” and “results under pressure.” ButShyam Metalics & Energy Ltd (SMEL)somehow manages both — and still turns a profit big enough to make the sponge iron blush.
From being India’s6th-largest integrated steel producerand atop ferro alloys manufacturer, SMEL has been quietly transforming from a regional player to a diversified metals beast. It’s now elbow-deep in stainless steel and aluminium foil, while also building a wagon factory because apparently, there’s nothing this company won’t roll out.
FY25 sales stood at ₹15,138 crore and TTM revenue hit ₹16,768 crore, growing 18% YoY. PAT followed with ₹970 crore, up from ₹909 crore in FY25. Meanwhile, Shyam’s capex party is in full swing — ₹6,584 crore already spent out of a ₹10,025 crore plan. But wait — these aren’t just vanity expansions. The company is adding new verticals likeductile iron pipes,cold rolling mills, andaluminium flat-rolled products— basically, turning every form of metal imaginable into margin.
Its 476 MW of captive power (soon to be 707 MW) keeps it self-sufficient, and the upcoming wagon plant at Kharagpur is its ticket into Indian Railways’ ₹1.5 lakh crore modernization buffet. If execution stays hot and debt cools off, SMEL’s furnace could double as a mint.
3.Business Model – WTF Do They Even Do?
At heart, Shyam Metalics makes steel. But in reality, it runs a buffet of metal delicacies that would make even a metallurgist dizzy.
- Intermediates (29% of FY25 revenue)– Pellets, billets, sponge iron, coke, and pig iron. Think of this as the “base dough” of the steel pizza.
- Ferro Alloys (13%)– Exotic ingredients like ferro chrome, silico manganese, and ferro manganese — the spice rack of the metallurgy kitchen.
- Finished Steel (45%)– Angles, channels, TMT bars, beams, wire rods — the final dishes that reach your construction site.
- Stainless Steel (7%)– The premium section, recently expanded via Mittal Corp acquisition.
- Aluminium Foil (5%)– A new venture that literally wraps up profits. Flat rolled and battery
- foils — perfect for EVs and food packaging.
And because just metals weren’t enough, SMEL also generatespower. About 83% of its needs come from its own plants — that’s 476 MW of captive generation spread across West Bengal, Odisha, and Madhya Pradesh. Cheaper electricity, higher margins.
Exports? Around 10% of total sales, across 25 countries — from Nepal to the USA. Because apparently, even the Yankees need good Indian sponge iron.
So yes, they melt metal, roll it, electrify it, and soon, they’ll even move it (via wagons). A true full-stack metal company.
4.Financials Overview
| Metric (₹ Cr) | Sep’25 (Q2 FY26) | Sep’24 (YoY) | Jun’25 (QoQ) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 4,457 | 3,634 | 4,419 | +22.6% | +0.9% |
| EBITDA | 539 | 409 | 580 | +31.8% | -7.1% |
| PAT | 262 | 216 | 291 | +21.5% | -10.0% |
| EPS (₹) | 9.38 | 7.72 | 10.47 | +21.5% | -10.4% |
Annualised EPS = ₹9.38 × 4 =₹37.5
At CMP ₹861 →P/E = 22.9x, very close to industry median (22.8x). Reasonable, considering it’s funding a ₹10,000 crore capex without frying its balance sheet.
Commentary:EBITDA margin at 12% is decent, given input costs have been volatile and global steel demand remains moody. The QoQ dip is just the capex hangover — no drama yet. When the new stainless and aluminium units kick in FY27, this EPS could lift heavier than a gym rat on pre-workout.
5.Valuation Discussion – Fair Value Range
Let’s get nerdy.
A) P/E Method
Annualised EPS = ₹37.5Industry P/E = 22.8SMEL’s FY27 expansion could justify premium 25–28x P/E.
- Lower Range (20x):₹750
- Upper Range (28x):₹1,050
So fair value via P/E =₹750–₹1,050
B) EV/EBITDA Method
EV = ₹25,078 CrTTM EBITDA = ₹2,090 CrEV/EBITDA = 12.0x (as per dump: 10.8x)
If re-rated to 9–11x (post-expansion peers trade lower),Fair EV = ₹18,800–₹23,000 CrLess Debt ₹1,117 Cr → Equity Value = ₹17,700–₹21,900 Cr/ 27.9 Cr shares =₹635–₹785 per share
C) DCF (Simplified)
Assume FY25–FY27 EBITDA CAGR = 20%, cost of capital 11%, terminal growth 4%.
DCF Fair Range =₹820–₹980
🎯Educational Fair Value Range: ₹750–₹1,000
Disclaimer: This fair value range is foreducational purposes onlyand not investment advice. Even iron melts under pressure; valuations do too.
6.What’s Cooking
