Brokerages remained constructive on Shyam Metalics and Energy after the company reported a strong June quarter of FY27 (Q1FY27) performance, with UBS reiterating that the stock remains one of its preferred midcap ideas, while Goldman Sachs said the next phase of growth will be driven by capacity additions.
Analysts said the company delivered another strong operational quarter, supported by robust revenue growth, higher realisations and improving profitability.
While UBS highlighted margin expansion through cost optimisation, Goldman Sachs believes the ongoing capacity ramp-up will remain the key earnings driver over the medium term.
Brokerages Decode
UBS
- Maintained Buy with a target price of Rs 1,250.
- Said the company delivered strong Q1FY27 revenue and EBITDA growth of 23% and 32% year-on-year, respectively.
- Noted that EBITDA growth was primarily led by improving realisations.
- Highlighted a 90 basis-point year-on-year improvement in margins, driven by cost optimisation initiatives.
- Continues to view Shyam Metalics as one of its top midcap ideas.
Goldman Sachs
- Maintained Buy with a target price of Rs 1,050.
- Said the company surpassed estimates during the June quarter.
- Expects the ongoing capacity ramp-up to remain the key driver of growth going forward.
Shyam Metalics Q1 Performance
Shyam Metalics reported a 23.3% year-on-year increase in consolidated revenue to Rs 5,455 crore in the June quarter, while EBITDA rose 28.3% to Rs 812 crore. EBITDA margin expanded to 14.9% from 14.3% a year ago.
Operating EBITDA grew 32% year-on-year to Rs 765 crore, with the operating EBITDA margin improving to 14% from 13.1% in the corresponding quarter last year.
Profit after tax increased 20.6% year-on-year to Rs 351 crore, while cash accrual for the quarter stood at Rs 616 crore.
Chairman and Managing Director Brij Bhushan Agarwal said the quarter marked a strong start to FY27, driven by disciplined execution and operational efficiencies. He added that the company has begun commercial production at its aluminium foil facility in Odisha, while the aluminium flat rolled products facility remains on track for commissioning in the second quarter.
The company also unveiled its Vision 2031 roadmap during the quarter, outlining plans to transform from a commodity-focused steel producer into a diversified value-added metals company.
Management said new capacities across hot rolled products, special bar quality steel, stainless steel, aluminium and downstream businesses are expected to strengthen earnings quality, profitability and capital efficiency over the coming years, while maintaining a strong balance sheet supported by internal cash generation.
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