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ICICI Securities Report
The volume/realisation data of Shyam Metalics and Energy Ltd. for May 2023 has reinforced our conviction on company's growth prospects. Key points:
Rebar volume rose despite overall weak demand;
volume ramp up of aluminium foils and LC ferrochrome may aid margins; and
implied revenue for May 2023 is up 2% YoY despite sharply lower realisation across all product lines.
Going ahead, we expect earnings growth largely on the back of capacity ramp up. On profitability front, we expect month-on-month decline in May 2023 owing to lower realisation across all product lines except ferrochrome.
That said, we expect lower thermal coal and iron ore costs to aid profitability in Q2 FY24. Hence, we do not envisage a risk to our FY24E Ebitda of Rs 25.6 billion (up 73% YoY).
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