Shyam Metalics & Energy Ltd

- There is no indication of any new fundraising through debt or equity planned currently. - The company emphasizes a disciplined capital allocation policy, funding CAPEX entirely through internal accruals. - Existing capital expenditure plans of about Rs.1,731 crores over the next three years will be met mainly via internal cash generation and liquid surpluses. - The company may take limited debt only in case of any fund flow mismatch. - Gross debt to equity remains moderate at 0.12x, and the company is net cash positive with Rs.1,648 crores cash against Rs.841 crores debt. - Bank limit utilization is expected to remain moderate going forward. - Therefore, no major external fundraising through debt or equity is currently planned or required.

- Ongoing brownfield expansion includes: - Increasing pallet capacity from 3.6 million tons to 6 million tons - Sponge iron capacity increase from 2.1 million tons to 2.9 million tons - Steel billet capacity enhancement from 0.9 million tons to 1.47 million tons, targeting 2 million tons in the current financial year - TMT structures and long product capacity increase from 0.8 million tons to 1.47 million tons, aiming for 2 million tons this financial year - Setup of a state-of-the-art aluminum foil plant with a capacity of 4,414 MT - Future commissioning of over 90 MW CPP (Captive Power Plant), additional DRI (Direct Reduced Iron) and billet facility, long product steel production facility planned in H2 FY23 - Ramsarup acquisition completed and detailed study ongoing to optimize plant utilization - Total planned CAPEX of Rs.3,950 crores with Rs.2,219 crores spent until September 2022; Rs.690 crores spent in H1 FY23 for brownfield expansion - CAPEX funded mainly through internal accruals, with limited debt use expected

- Shyam Metalics expects healthy demand in H2 FY2023 in the steel industry. - Increased contributions from recently added capacity and product diversity will drive operating and financial performance. - The company is targeting ramp-up of new manufacturing facilities to 85%-90% capacity utilization from this quarter onwards. - Long product growth is happening quarter after quarter, with more penetration in the B2C space. - Sales volumes in long products and value-added segments have grown significantly (long product volume growth over last 7-8 years). - Aluminum foil business is stabilizing with 70%-75% exports, and volumes expected to grow, contributing handsomely to top-line and bottom-line. - Brownfield expansions and new capacities (steel, aluminum foil, power plants) are ongoing and expected to boost volumes. - Shyam Metalics plans to use internal accruals for CAPEX and maintain moderate debt, supporting sustainable growth.

- Management is optimistic about a healthy demand in H2 FY2023 for the steel industry and expects increased contributions from recently added capacity. - Focus on product diversity and a higher share of value-added products is likely to drive improved operating and financial performance. - The aluminum foil business is ramping up, with over 70-75% of production exported to premium markets in the USA and Europe; expected to contribute significantly to top-line and bottom-line. - CAPEX expansions (brownfield and Ramsarup acquisition) are ongoing and expected to enhance capacities across pallet, sponge iron, billet, and long product steel segments. - EBITDA margins have been pressured but are expected to improve once geopolitical issues stabilize and government export duties possibly withdraw. - Company maintains disciplined capital allocation, negative net debt, and expects cash accruals to fund expansions and debt repayments. - Overall, management expects to emerge stronger post current temporary challenges, with steady volume growth and margin improvements ahead.

- The aluminum foil business, recently commissioned and stabilized, is expanding its international market presence. - The company exports over 70%-75% of its aluminum foil production, targeting premium markets in the USA and Europe. - Customers include world-leading packaging companies in America and Europe involved in food products, FMCG sector, healthcare, and specialty industrial applications like battery insulation. - The company is actively working to increase market share and tap new customers in the foil segment. - By the end of the current financial year (FY23), the business aims to have streamlined operations and enhanced orderbook visibility. - For steel products, the company is focusing on ramping up production capacity to 85%-90% utilization on new manufacturing facilities, which indirectly supports order fulfillment. - No specific numeric figures for the current or expected orderbook are disclosed, but growth and market penetration efforts indicate a positive order pipeline.