Shyam Metalics (SHYAMMETL)

FairStock Score: 65/100 — STEADY

Score breakdown: P/E: 1/3 · ROCE: 1/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• Conservative balance sheet with Debt/Equity of only 0.10
• High promoter holding of 74.59% aligns owner interests
• Strong growth track record: 5-year revenue CAGR of 19.18% and latest quarter sales of ₹4,421 Cr
• Piotroski F-Score of 7 and Altman Z-Score of 3.01 indicate financial health

Concerns

• Rich valuation: P/E of 24.76 and EV/EBITDA of 32.22 leave little margin of safety above Graham Number of ₹557.07
• Mediocre profitability for a commodity business: ROE of 9.19% and ROCE of 12.05%
• Weak cash conversion: Free Cash Flow of ₹60 Cr is tiny versus net profit of ₹198 Cr
• DCF intrinsic value of ₹19.65 suggests the market is pricing in far too much optimism

AI Analysis

Let’s look at Shyam Metalics the way I’d look at any business. It’s an iron and steel producer, which tells me immediately that I’m in a cyclical commodity business, not a franchise with durable pricing power. The balance sheet is conservative: debt/equity of 0.10, promoter holding of 74.59%, and an Altman Z-score of 3.01, so financial distress isn’t the worry. The Piotroski F-Score of 7 also tells me the fundamentals are reasonably healthy. But my margin of safety is missing. At ₹826.95, the P/E is 24.76 and EV/EBITDA is 32.22—expensive for a cyclical. Book value is ₹378.08, so the P/B is 2.19, yet the company earns only ₹9.19 per ₹100 of equity and ROCE is 12.05%. That’s not a wonderful franchise; it’s a decent operator in a tough business. Graham’s number is ₹557.07, and the price is well above it. The DCF intrinsic value of ₹19.65 makes me deeply uncomfortable, even allowing for conservative assumptions. Growth is real: five-year revenue CAGR of 19.18%, sales growth of 17.07%, and profit growth of 14.89%. The latest quarter shows ₹4,421 Cr in sales and ₹198 Cr in net profit. But free cash flow is only ₹60 Cr, so earnings are not fully converting to cash. The dividend yield of 0.52% gives me almost nothing while I wait. This is a cyclical, and cyclicals should be bought when they’re cheap and hated, not when they’re priced for perfection. I’d keep it on my watchlist and wait for a better price.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer