💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 22.5% YoY in H1 FY26 to INR 8,876 Cr. High value-added segment contribution increased to 28.5% of revenue from 25% in the previous half-year. Standalone total income decreased 2.17% to INR 6,617.89 Cr in FY25.

Geographic Revenue Split

The company has established a footprint in the domestic market and over 40 international markets. It maintains a dominant market position in Eastern India.

Profitability Margins

H1 FY26 PAT margin stood at 6.2% compared to 6.8% in H1 FY25. Standalone net profit increased 39.33% to INR 489.62 Cr in FY25. ROCE was 16% and ROE was 14% as of September 2025.

EBITDA Margin

Consolidated EBITDA margin for H1 FY26 was 14%, stable compared to 14.1% in H1 FY25. Operating EBITDA for H1 FY26 was INR 1,119.1 Cr, up 24.8% YoY. FY23 operating margin had declined to 11.8% from 24.5% in FY22 due to high energy and iron ore costs.

Capital Expenditure

Planned capex of INR 10,000 Cr between fiscals 2026 and 2031. For FY25-27, capex of ~INR 5,500 Cr is planned. In H1 FY26, the company spent INR 945 Cr on capex, representing 173% of cash flow from operations for that period.

Credit Rating & Borrowing

Long-term rating upgraded to CRISIL AA+/Stable from AA/Positive. Short-term rating reaffirmed at CRISIL A1+. Interest coverage ratio remains healthy at over 10-12 times.

⚙️ Operational Drivers

Raw Materials

Iron ore and Coal (Energy) are primary raw materials. Fluctuations in these prices significantly impact margins, as seen in FY23 when steep rises offset a 17% realization growth.

Import Sources

Sourced from domestic markets (Eastern India) and international markets. China is identified as a major source of import threat for finished goods.

Capacity Expansion

Current combined capacity is ~13.66 MTPA. Steel production reached 4.97 MTPA in FY25, a 7.48% YoY increase. Planned capex of INR 10,000 Cr (FY26-31) focuses on value-added products.

Raw Material Costs

Raw material costs are highly volatile; in FY23, iron ore and energy cost spikes led to a 12.7 percentage point drop in operating margins despite revenue growth.

Manufacturing Efficiency

Supported by integrated operations and strategic locations. Capacity utilization remains high, supporting volume growth of 24% YoY in Q2 FY26.

📈 Strategic Growth

Expected Growth Rate

15-20%

Growth Strategy

Growth will be achieved through a ~INR 10,000 Cr capex plan (FY26-31) focused on value-added products with higher ROCE. The company aims to grow revenue and EBITDA by ~2.5x over the next 5 years through internal accruals and inorganic routes like the Ramsarup Industries JV.

Products & Services

Sponge iron, wires, TMT Bars, steel intermediates, ferro alloys, and aluminium foil/products.

Brand Portfolio

Shyam Metalics, SEL, Ramsarup.

New Products/Services

Increasing focus on value-added products (now 28.5% of revenue). Recently discontinued a DI pipe plant project to focus on higher-return segments.

Market Expansion

Expanding footprint in 40+ international markets and strengthening its dominant position in the Eastern Indian steel market.

Market Share & Ranking

One of the largest players in the steel and steel intermediates industry in Eastern India.

Strategic Alliances

Inorganic expansion through a joint venture with Ramsarup Industries for manufacturing sponge iron, wires, and TMT bars.

🌍 External Factors

Industry Trends

The industry is seeing a shift toward value-added products and a growing importance of ESG compliance. Shyam Metalics is positioning itself as a 'compounding machine' by redeploying cash flows into high-return projects.

Competitive Landscape

Operates in a commoditized and capital-intensive industry with intense competition from both domestic players and international imports.

Competitive Moat

Durable competitive advantage derived from cost leadership, fully integrated operations (backward and forward), and 30+ years of promoter experience. Sustainability is supported by a net-cash positive balance sheet.

Macro Economic Sensitivity

Highly sensitive to the cyclicality of the steel industry and global commodity price trends.

Geopolitical Risks

Trade barriers and import threats from China are primary geopolitical concerns affecting domestic market stability.

⚖️ Regulatory & Governance

Industry Regulations

Subject to pollution norms and GHG emission standards. Must comply with SEBI listing norms to reduce promoter stake to 75% (achieved via OFS and QIP).

Environmental Compliance

Focus on minimizing carbon emissions and utilizing renewable energy (solar lights/irrigation). ESG profile supports its credit risk profile.

⚠️ Risk Analysis

Key Uncertainties

Project execution and stabilization risks for the INR 10,000 Cr planned capex. Vulnerability to inherent cyclicality in the steel sector (potential margin impact of 10%+).

Geographic Concentration Risk

Manufacturing units are strategically concentrated in Eastern India, though sales are diversified across 40+ international markets.

Technology Obsolescence Risk

Mitigated by adopting best-in-class technologies and infrastructure to maintain cost leadership.

Credit & Counterparty Risk

Receivable balances increased as of year-end FY25 due to increased operations; however, liquidity remains strong with INR 1,071 Cr in cash and equivalents.