Shares of Shyam Metalics and Energy soared 2.4 per cent in trade to clock an all-time high of Rs 892.5 per share after the company commenced phase I of the greenfield cold rolling mill it has been building at its Jamuria plant in West Bengal.
At around 1:51 PM, shares of Shyam Metalics and Energy were up 2.25 per cent, or Rs 19.6 higher, at Rs 891 per share. In comparison, the BSE Sensex was trading nearly 200 points higher at 83,090, around the same time.
The company’s Jamuria plant, a cutting-edge cold-rolling mill, has a total production capacity of 400,000 tons annually. It is being built at a total capital cost of Rs 603 crore, with Rs 346 crore already invested, and Rs 257 crore pending to be invested.
As per the company’s exchange filing, the mill will specialise in producing pre-painted galvalume coils (PPGL) and coils of galvanised iron/galvanised steel (GI/GL). With this expansion, Shyam Metalics will be able to produce steel products of high caliber, which will strengthen its integrated steel manufacturing capabilities.
The facility had commenced a trial run under Shyam Metalics Flat Product Pvt. Ltd., a subsidiary of Shyam Metalics, according to the company’s exchange filing.
“We aim to achieve optimal utilisation of the new facility within the next two years, contributing around 8 per cent to 10 per cent of the company’s revenue and earnings before interest, tax, depreciation, and amortisation (Ebitda) in the years to come,” said Brij Bhushan Aggarwal, vice chairman and managing director of Shyam Metalics and Energy Ltd.
Shyam Metalics’ new cold rolling mill will support housing, warehousing and industrial sheds, with a particular emphasis on affordable housing through government initiatives such as PMAY.
Global brokerage firm UBS initiated coverage on Shyam Metalics and Energy on August 22, 2024, with a ‘Buy’ rating. UBS had stated that it is upbeat about the iron and steel products company on the back of value-added products, strong earnings visibility and lower cyclical risk because of diversified metal products.
With a target price of Rs 1,200 per share for 12 months, the brokerage sees an upside of 57.6 per cent from Wednesday’s closing of Rs 763.8 per share, on the BSE.
In the past one year, shares of Shyam Metalics have gained 94.7 per cent, compared to the BSE Sensex’s rise of 17.5 per cent during the same period.
First Published: Sep 16 2024 | 2:25 PM IST
