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Shyam MetalicsQ3 FY24

Shyam Metalics Q3 FY24 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹1,075P/E: 26.7Market Cap: ₹30.0K CrSector: Industrial Products

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

Yes

Order

N/A

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 3
  • FY'25 revenue growth expected at around 12% to 15%.
  • FY'26 anticipated to see a major jump in growth by another ~20%.
  • Commissioning of new plants including a color-coated plant and blast furnace slated for mid-FY'25 to drive growth.
  • Planning volume ramp-up in aluminium foil segment from initial 20-25% to around 60-70%.
  • Mittal Corp (stainless steel segment) targeting INR1,500 to 1,800 crores revenue in FY'25.
  • Expansion through acquisition of Ram Sarup Industries; DI plant expected by FY'26.
  • Long product segment volumes have increased by over 80% in the past year.
  • Export continues to contribute about 10% of total revenue, with growth potential.
  • Diversification across carbon steel, stainless steel, aluminium foil, and specialty alloy anticipated to reduce volatility and enhance sustainability.

See what Shyam Metalics management said on margin guidance — free account, 30 seconds.

Fundraise plans

Yes
  • No plans for promoter dilution or new equity fundraising in the near future, as stated by Brij Bhushan Agarwal ("Not at all" to dilution question).
  • The recent QIP in January 2024 raised INR 1,385 crores from qualified institutional buyers and was used to pay off working capital loans, resulting in a net cash positive status with INR 1,209 crores surplus.
  • Company intends to finance upcoming capex (remaining ~INR 4,332 crores over next 3 years) largely through internal accruals and aims to maintain a strong credit rating.
  • Balance sheet and liquidity are closely monitored to avoid financial stress despite ongoing large capex.
  • No mention of any fresh debt raising or equity issues beyond the recent QIP.

See what Shyam Metalics management said on order book — free account, 30 seconds.

Capex plans

Yes
  • Total announced capex of around INR 9,900 crores, with INR 4,300 crores already capitalized from internal accruals.
  • Remaining capex of approx. INR 5,500 crores to be incurred over the next 2-3 years.
  • Capex spend projection:
  • - Q4 FY24: INR 377 crores
  • - FY25: INR 2,000 crores
  • - FY26: INR 1,800 crores
  • - FY27 (early): Remaining approx. INR 1,000 crores
  • Significant investments include:
  • - Aluminium backward integration with a green aluminium foil plant focusing on lithium battery foil.
  • - Expansion and modernization of stainless steel operations including adding solar power and downstream value-added products.
  • - Acquisition of Mittal Corp Ltd to foray into stainless steel segment.
  • - Expansion of energy portfolio by 240 MW through Waste Heat Recovery Boiler (WHRB) and Atmospheric Fluidized Bed Combustion (AFBC), increasing capacity to approx. 600 MW.
  • - Installation of 100 MW solar capacity to reduce carbon footprint.
  • Future expansions in aluminium foil and stainless steel are under consideration but are at early planning/due diligence stages.

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Margin guidance

Category 3
  • FY'25 growth expected around 12% to 15% in volume and topline, with no specific margin guidance currently.
  • A major jump of about 20% growth anticipated in FY'26, making March 2026 a significant value milestone for the company.
  • Increasing production with commissioning of new plants such as color-coated plant and blast furnace in FY'25.
  • Enhanced operating efficiencies and volume growth expected from new capacities and product diversification, including aluminum foil and stainless steel segments.
  • EBITDA and PAT showed substantial YoY growth (83% and 94% respectively) in Q3 FY24, indicating strong operating performance.
  • Net cash positive position post QIP, supporting capacity expansion and capex plans without straining the balance sheet.
  • Long-term sustainable margin improvements expected as company capitalizes on demand growth, cost optimization, and integration benefits, though specific margin numbers are not disclosed yet.

Order book

The transcript does not explicitly mention the current or expected order book or pending orders for Shyam Metalics and Energy Limited. However, related information includes: - The company is commissioning new plants such as a color-coated plant and a blast furnace by mid-2024, indicating expected growth in production capacity. - There is a focus on increasing exports, especially in aluminium foil with plans to ramp up battery foil production from 20-25% to 60-70%. - The stainless steel business is growing with a revenue target of INR 1,500 to 1,800 crores for FY25 from the Mittal Corp acquisition. - Demand outlook is positive with expected volume growth of around 12-15% for FY25 and a further 20% jump anticipated by FY26. - The company is working on product mix innovation and new segments, indicating a growing order pipeline though specific orderbook values are not disclosed.

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