Shyam Metalics shares fall 16% in early deals: Price targets, technicals and more 

Shares of Shyam Metalics and Energy Ltd slipped 16% in early deals on Friday. Shyam Metalics stock fell 16% to Rs 655 against the previous close of Rs 780.30 on BSE. Market cap of the firm fell to Rs 22,107.24 crore. The stock opened higher at Rs 789.90 on BSE. Total 2.52 lakh shares changed hands amounting to a turnover of Rs 17.46 crore on BSE. 

At 9:45 am, the stock recovered all losses and was trading 1.11% higher at Rs 789. 

The metal stock has gained 20% in one year and gained 7.52% since the beginning of this year. In terms of technicals, the relative strength index (RSI) of Shyam Metalics stands at 50.2, indicating the stock is trading neither in the overbought nor in the oversold zone. The stock has a one-year beta of 1.3, indicating high volatility during the period.

Shyam Metalics shares are trading higher than the 5 day, 10 day, 20 day, 30 day, 200 day but lower than 50 day and 100 day moving averages. 

Brokerage ICICI Securities has a buy call on the Shyam Metalics stock with a price target of Rs 975. 

B&K Securities has a price target of Rs 1,028 on the Shyam Metalics stock. 
 
"We believe overall topline to grow at a CAGR of 31% (FY24-27E), with EBITDA margins exceeding 12% and a RoE of 17.5%," the brokerage said. It has a target price of Rs 1,028, based on an EV/EBITDA multiple of 7.5x applied to base-case FY27E EBITDA estimates.

"We further expect robust bottomline growth, with a projected PBT CAGR of 48% over FY24-27E, supported by reduced interest costs. Notably, the company is financing its capex cycle primarily through internal accruals – a rarity in the steel sector," said B&K Securities. 

Global brokerage UBS has a buy call on the stock with a price target of Rs 1,200. 

"Shyam Metalics management has outlined a Rs 10,000 crore capex plan for FY22-27, of which around Rs 5,000 crore has been incurred to date but only Rs 2600 crore has been capitalised while the balance is in capital work in progress (CWIP). It will be capitalising around Rs 2500 crore of capex in FY25 and Rs 4900 crore in FY26 and FY27. These project capitalisations should contribute to operating profit. Most of this capex is funded through internal accruals and existing cash and so the balance sheet is stress free," said UBS. 

Shyam Metalics and Energy Ltd is a metal producing company. It is engaged in the business of manufacturing and selling of ferro alloys, iron and steel, products and power generation. Its product portfolio includes iron pellets, sponge iron, billets, thermo-mechanically treated (TMT) bars, structural steel, wire rods, power, ferro alloys, and aluminum.