Shyam Metalics and Energy Limited

Shyam Metalics reported a robust Q3 FY26 with operating revenue reaching ₹4,421 crores, marking a 17.7% year-on-year growth. This performance was primarily driven by a significant 25% year-on-year increase in sales volume. Operating EBITDA stood at ₹487 crores, growing 6.9% YoY, with an operating EBITDA margin of 11%. Profit After Tax (PAT) for the quarter was ₹198 crores, remaining broadly stable YoY, with a PAT margin of 4.5%.

For the nine months ended December 31, 2025, the company achieved a consolidated revenue of ₹13,312 crores, representing a strong 20.9% year-on-year growth. Consolidated EBITDA for this period was ₹1,781 crores, up 16.6% YoY, with an EBITDA margin of 12.2%. The Profit After Tax for the nine months was ₹749 crores, showing an 8.6% growth over the previous year, highlighting solid overall financial health.

The Board has approved a fresh capital investment of ₹6,660 crores for capacity expansion, process improvement, and developing more downstream and value-added products. This is in addition to the remaining ₹8,000 crores from a previous capex plan, to be incurred over the next three years. The company successfully commissioned a 0.45 million tons blast furnace at its Kharagpur plant in Q3 FY26. Key upcoming projects include a 90 MW captive power plant and a 0.15 million tons color-coated plant expected in Q4 FY26, and aluminum backward integration and a new foil plant by June 2026.

Shyam Metalics is actively diversifying its product portfolio, with iron pellets volume increasing by 43% YoY, specialty alloys volume by 18.7% YoY, and stainless steel volume by 8.8% YoY in Q3 FY26. Realizations also improved for iron pellets (5.4% YoY), aluminum (8.5% YoY), and stainless steel (11.3% YoY). The company is strategically focusing on value-added products like stainless steel (200/400 grade) and is exploring a new wagon manufacturing business with a low capex of ₹200 crores, leveraging existing infrastructure and backward integration.

While the global steel industry faces challenges from subdued demand, geopolitical uncertainties, and trade-related actions, the domestic market remains stable with strong fundamentals. Infrastructure development, manufacturing, and urbanization continue to drive demand for long products. The company is operating at 90-95% capacity and expects a decent price increase from January onwards due to the introduction of safeguard duties on steel imports, which is supportive for domestic manufacturers.

The company maintains a conservative and prudent capital allocation approach, primarily funding its capex through internal accruals, with borrowing only if required. Management emphasized its commitment to being a low-leverage company, prioritizing sustainable growth and long-term value creation over aggressive debt-fueled expansion. They project a volume growth of 20-25% for FY26 and FY27, and 15-20% for the next 4-5 years, driven by new capacities and value-added product mix.