Mehabe score: 6 G Factor: 7 Piotski Score: 8 The stock has a rating BUY. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 7 and Piotski score of 8.
Description
Shyam Metalics is a leading integrated metal producing company based in India with a focus on long steel products and ferro alloys. The company is one of the largest producers of ferro alloys in terms of installed capacity in India and has the ability to sell intermediate and final products across the steel value chain.#
Main Points
India’s leading Metal Producer #
The company is one of the leading Integrated metal producers in India and it is among India’s largest producers of ferroalloys in terms of installed capacity and the fourth-largest player in the sponge iron industry.Site:SHYAMMETLMain Symbol:SHYAMMETL
Stock trades at 386.0, below its 50dma 403.14 and below its 200dma 387.75. The stock remains bearish on technicals
The 52 week high is at 461.15 and the 52week low is at 360.95
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
Weakness
– might be capitalizing the interest cost
Competition
– The industry trades at a mean P/E of 14.0x. Ratnamani Metals trades at the industry’s max P/E of 36.64x. SHYAMMETL trades at a P/E of 11.7x
– Industry’s mean G-Factor is 5.6 while the mean Piotski score is 8.0. SHYAMMETL has a G-Factor of 7 and Piotski scoreof 8.
– Average 1 month return for industry is -11.6%. The max 1- month return was given by Ratnamani Metals: a return of 4.29 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 2465.0 cr compared to Rs 1084.0 cr for period ended Mar 2020, a rise of 127.4%
Operating Profits reported at Rs 688.0 cr for period ended Jun 2021 vis-vis 189.0 for period ended Mar 2020 .
Operating Margins expanded 1047.5 bps for period ended Jun 2021 vis-vis Mar 2020 .
The EPS for Jun 2021 was Rs 17.95 compared to Rs 16.59 for previous quarter ended Mar 2021 and Rs 3.41 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 6297.0 cr for period ended Mar 2021 vis-vis sales of Rs 4363.0 cr for the period ended Mar 2020, a healthy growth of 30.7%. The 3 year sales cagr stood at 18.9%.
Operating margins expanded to 22.0% for period ended Mar 2021 vis-vis 15.0% for period ended Mar 2020, expansion of 700.0 bps.
Net Profit reported at Rs 843.0 cr for period ended Mar 2021 vis-vis sales of Rs 340.0 cr for the period ended Mar 2020, rising 59.7%.
Company recorded a healthy Net Profit CAGR of 25.7% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 1050.0 cr for period ended Mar 2021 vis-vis Rs 85.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 26.0% compared to 22.0% over the last 3 Years. – The stock has given a return of % on a 1 Year basis vis-vis a return of % over the last 3 Years. – The compounded sales growth on a TTM bassis is 44% vis-vis a compounded sales growth of 19% over the last 3 Years. – The compounded profit growth on a TTM basis is 148% vis-vis a compounded profit growth of 25% over the last 3 Years.
Ratios
Shareholding Pattern
Conclusion
– has reduced debt. – might be capitalizing the interest cost
Fundamentally, the stock remains a Strong ‘BUY’ in our long term portoflio.
Technically, the stock has shown near term lack of bullish momentum. The stock remains below its 50 DMA 403.14 and is trading at 386.0.While this may be due to profit taking in near term, we suggest to observe price action. However as investors, this may be a good time to accumalate into a fundamentally solid stock for the next 5 to 10 years
Thus, we retain a BUY for the longer term window, 5-10 years. For the near term, as traders, we suggest to observe price action and buy on bullish breakout.
