SYNOPSIS: The company’s subsidiary nears commissioning of aluminium facility in Odisha, targeting value-added products, margin expansion of 40-50 percent, and 2-2.5x revenue growth, strengthening diversification and downstream capabilities.
During Thursday’s trading session, shares of the 4th Largest Sponge Iron player, leading player in terms of pellet capacity, and one of the largest ferro alloys producers in India, surged over 4 percent on BSE, after the company announced that its upcoming aluminium unit may boost margins by 40-50 percent and drive 2-2.5x revenue growth.
With a market cap of Rs. 23,588 crores, shares of Shyam Metalics and Energy Limited are currently trading in the green at Rs. 845.05 on BSE, up by around 4 percent, compared to its previous closing price of Rs. 812.8. The stock has delivered negative returns of nearly 7 percent in the last one year, but has gained by over 8 percent in one month.
What’s the News
As per its latest disclosure to the stock exchanges, Shyam Metalics and Energy Limited informed that its step-down subsidiary, Smel Steel Structural Pvt. Ltd., is nearing commencement of commercial operations at its aluminium manufacturing facility in Sambalpur, Odisha. This project represents a strategic entry into value-added aluminium products.
The facility is designed to manufacture Aluminium Flat Rolled Products (FRP) with an installed capacity of 60,000 tonnes per annum in the thickness range of 0.3-4.0 mm, along with Aluminium Foils with a capacity of 18,000 tonnes per annum in the thickness range of 6-40 microns.
This expansion aligns with the company’s strategy to diversify its product portfolio and move up the value chain by focusing on higher-margin, value-added offerings. It also aims to cater to the growing demand for high-quality aluminium products across industries, reduce reliance on imports, and strengthen domestic manufacturing capabilities.
The commissioning of the Sambalpur facility is expected to significantly improve both operational and financial performance. The company anticipates a 40-50 percent improvement in operating margins, driven by a better product mix and enhanced efficiencies. Additionally, revenues are projected to grow by 2 to 2.5 times over the medium term, supported by expanded market reach and higher realization products.
The project further enhances the company’s integrated manufacturing ecosystem by strengthening downstream capabilities and enabling entry into high-growth segments, thereby creating new revenue streams.
Moreover, the plant’s strategic location offers logistical advantages, ensuring efficient access to key markets and facilitating smooth distribution across domestic as well as international geographies, while supporting operational efficiency.
The project is also expected to generate employment opportunities in the region and contribute to the socio-economic development of Odisha. It aligns with the Government of India’s “Make in India” initiative, aimed at boosting domestic manufacturing and self-reliance.
Financials, Management Guidance & More
Shyam Metalics & Energy Limited is one of India’s leading and fastest-growing integrated metal-producing companies primarily in the steel Industry in West Bengal, Odisha, Jharkhand and Madhya Pradesh, with a focus on long steel products, ferro alloys, aluminium and stainless steel.
As of Q3 FY26, the company reported a combined production capacity of 16.78 million tonnes per annum (MTPA). Additionally, it generated a total of 467 MW of power, of which ~83 percent was sourced from captive operations during Q3 FY26, supporting margin improvement.
The company expects a strong growth trajectory over the coming years, with both revenue and EBITDA projected to grow by ~2.5 times by FY31. Revenue, which stood at Rs. 15,137 crore in FY25, is anticipated to scale significantly, supported by expansion into diversified, value-added product segments that offer higher return on capital employed (ROCE) and relatively lower capital expenditure requirements.
Historically, over the past two decades, the company has delivered a CAGR of around 16 percent in revenue and 19 percent in EBITDA, reflecting consistent operational performance across cycles. Building on this track record, management expects revenue to grow at a CAGR of 15-17 percent and EBITDA at 18-20 percent over the next five years, without requiring substantial additional capital investment while maintaining its existing 75 percent stake.
Shyam Metalics reported a significant growth in revenue from operations, experiencing a year-on-year increase of around 18 percent, from Rs. 3,756 crores in Q3 FY25 to Rs. 4,421 crores in Q3 FY26. Meanwhile, its net profit increased during the same period from Rs. 197 crores to Rs. 198 crores, representing a marginal rise of just around 1 percent YoY.
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