Shyam Metalics and Energy Limited: history, ownership, mission, how it works & makes money

A Brief History of Shyam Metalics and Energy Limited

Shyam Metalics and Energy Limited, founded in 2002, has rapidly evolved into a major player in the Indian metal manufacturing sector. Initially started as a producer of iron and steel, the company has expanded its operations to include a broad spectrum of metal products.

The company's manufacturing facility is located in West Bengal, with a strong emphasis on efficiency and sustainability. Shyam Metalics has a total production capacity of approximately 1.5 million tons per annum for its iron and steel products, which includes sponge iron, billets, and TMT bars as of 2023.

In June 2021, Shyam Metalics made a significant milestone by launching an initial public offering (IPO) that raised approximately ₹909 crore (around $122 million). This IPO was oversubscribed by more than 121 times, showcasing strong investor confidence.

The company's operations encompass a diverse product range, including:

• Sponge Iron
• Mild Steel (MS) Billets
• Mild Steel (MS) TMT Bars
• Wire Rods
• Energy generation from waste heat recovery

According to the financial data for the fiscal year ending March 2023, Shyam Metalics reported:

Shyam Metalics has undergone various expansions, with the most recent one being in 2022, where the company announced plans to increase its production capacity by another 1 million tons for its long steel products by 2024.

In terms of stock performance, as of October 2023, Shyam Metalics traded at approximately ₹420 per share, reflecting a year-to-date growth of about 35%. The company's P/E ratio stood at around 23.5, indicating a healthy valuation in comparison to its peers in the industry.

Shyam Metalics has also made strides in sustainability, with initiatives aimed at reducing carbon emissions and enhancing energy efficiency. The company reported a reduction of over 15% in its carbon footprint since 2020.

In summary, Shyam Metalics and Energy Limited represents a vibrant growth story in India's metals sector, marked by rapid expansion, solid financial performance, and a commitment to sustainability.

A Who Owns Shyam Metalics and Energy Limited

Shyam Metalics and Energy Limited, a prominent player in the Indian metal industry, is primarily owned by the Shyam Group, which was founded by its chairman, Mr. Bansidar Sarda. As of the latest publicly available data, the ownership structure is as follows:

As of June 30, 2023, the total number of outstanding shares of Shyam Metalics and Energy Limited was approximately 69,07,00,000. The institutional investors include various mutual funds and foreign portfolio investors, who have increasingly shown interest in the company due to its performance and growth potential.

The retail investor segment constitutes a significant part of the non-institutional investors, reflecting the growing public interest in the metal and energy sectors. The company's robust sales and profit margins have further fueled this interest.

In the fiscal year ending March 31, 2023, Shyam Metalics reported revenues of approximately ₹8,000 crore, showcasing a year-on-year growth of approximately 17%. The net profit for the same period was reported at ₹580 crore, equating to a net profit margin of about 7.25%.

In terms of governance, the board of directors includes key members from the Sarda family, ensuring continuity in management and strategic direction. Notably, Mr. Gunjan Sarda, the Managing Director, has been instrumental in driving the company’s operational efficiencies and expanding its product offerings.

Shyam Metalics and Energy Limited has a diverse product portfolio that includes long steel products, ferro alloys, and energy generation, which strategically positions it within the marketplace amidst changing demand dynamics.

The company’s stock is traded on the National Stock Exchange (NSE) under the ticker symbol SHYAMMETL. As of September 29, 2023, the price of the stock has been approximately ₹382, reflecting a market capitalization of around ₹26,400 crore.

The ownership dynamics of Shyam Metalics and Energy Limited reflect a stable promoter holding, diverse institutional interest, and growing retail participation, indicating confidence among investors in the company’s future growth trajectory.

Shyam Metalics and Energy Limited Mission Statement

Shyam Metalics and Energy Limited aims to provide environmentally sustainable and cost-effective solutions in the metal and energy sectors. Their mission is centered on delivering high-quality products and services while fostering innovation and achieving operational excellence.

The company emphasizes its commitment to sustainability, efficiency, and community welfare. The mission statement is encapsulated in their goals to enhance product quality, maintain customer satisfaction, and improve overall productivity.

Core Components of the Mission Statement

• Quality: To provide high-quality iron and steel products, meeting stringent international standards.
• Sustainability: To utilize eco-friendly technologies in production processes.
• Innovation: To foster an environment of continuous improvement and innovation within the industry.
• Community Engagement: To contribute positively to the communities they operate in through various social initiatives.
• Customer Focus: To prioritize customer needs and ensure a superior experience.

Financial Overview

Shyam Metalics and Energy Limited reported significant financial performance in their FY 2022-23 earnings. The following table provides an overview of key financial metrics:

Market Position

As of October 2023, Shyam Metalics and Energy Limited holds a prominent position in the Indian steel industry. The company is known for its production capacity, which includes:

• Steel Production: Approximately 2.5 Million Tonnes Per Annum (MTPA)
• Iron Ore Pellets: Production capacity of 1.2 MTPA
• Power Generation: 350 MW from renewable and non-renewable sources

Strategic Initiatives

The company's strategic initiatives include:

• Expansion of production facilities to increase capacity by 15% over the next two years.
• Implementation of energy-efficient technologies aiming for a 20% reduction in carbon emissions by 2025.
• Investing in community development projects with a budget of ₹ 100 Crore annually.

Shyam Metalics and Energy Limited continues to focus on its mission to lead in the metal and energy sectors while maintaining strong financial health and commitment to sustainability.

How Shyam Metalics and Energy Limited Works

Shyam Metalics and Energy Limited operates primarily in the steel manufacturing and energy sectors in India. Established in 2002, the company has positioned itself as a prominent player in the production of iron and steel products, including long products, flat products, and sponge iron. As of the fiscal year 2023, the company reported a revenue of ₹9,095 crore.

The company’s manufacturing facilities are located in Odisha, with a total capacity of about 2.7 million tonnes per annum (MTPA) for steel and a sponge iron production capacity of 1.5 MTPA. For the financial year 2022-2023, Shyam Metalics achieved an EBITDA margin of approximately 20%, reflecting its operational efficiency.

Shyam Metalics focuses on a variety of products, including:

• Sponge Iron
• Billets
• Wire Rods
• TMT Rebars
• Structural Steel

In addition to steel production, the company is active in the energy sector, with a power generation capacity of 54 MW through waste heat recovery systems. The energy segment reported revenues of ₹1,085 crore in FY 2023.

Shyam Metalics' sales strategy involves a mix of direct and distributor-led channels, ensuring a broad market reach across India. The company caters to various industries, including construction, infrastructure, and manufacturing. As of September 2023, the company had a market capitalization of approximately ₹9,185 crore.

With a focus on sustainable practices, Shyam Metalics has invested in green technologies aimed at reducing carbon emissions. The company operates an efficient water recycling program that has led to a reduction in freshwater consumption by over 20%.

Operationally, Shyam Metalics maintains a robust supply chain and logistics network, which enhances its ability to manage raw material costs effectively. The company sources iron ore from both captive mines and third-party suppliers, optimizing its procurement processes to ensure cost efficiency.

In terms of financial positioning, Shyam Metalics reported a debt-to-equity ratio of 0.5 in FY 2023, indicating a conservative approach toward leverage. This enables the company to invest in growth opportunities without excessively increasing financial risk.

The company has plans for further expansion, including increasing its production capacity to 5 MTPA by FY 2025, supported by a capital expenditure plan of ₹1,000 crore over the next two years. This growth trajectory is aligned with India’s increasing demand for steel, projected to grow at a CAGR of 7.5% through 2025.

How Shyam Metalics and Energy Limited Makes Money

Shyam Metalics and Energy Limited operates primarily in the steel and energy sectors. The company's revenue generation is derived from manufacturing, selling various steel products, and producing power through its captive power plants.

Revenue Breakdown

For the fiscal year 2022-2023, Shyam Metalics reported a total revenue of approximately ₹10,259 crores, showcasing a significant increase from ₹8,296 crores in FY 2021-22.

• Steel Products: The major portion of the revenue comes from various steel products including:
• Long Steel Products: ₹7,165 crores
• Flat Steel Products: ₹2,382 crores
• Others (including Ferro Alloys): ₹712 crores

The company’s product offerings include TMT bars, billets, and wire rods, which are essential for construction and infrastructure projects.

Cost Structure

The cost of goods sold (COGS) for FY 2022-2023 was reported at ₹9,411 crores, leading to a gross profit margin of approximately 8.3%.

• Raw Materials: Key inputs like iron ore and coal are significant contributors to cost. The prices of iron ore averaged around ₹5,500 per ton in 2023.
• Operating Expenses: This includes labor, utilities, and maintenance costs, totaling about ₹1,200 crores.

Energy Generation

The company operates a total installed capacity of 300 MW from its captive power plants. In FY 2022-2023, Shyam Metalics generated approximately 1,800 million units (MUs) of electricity, contributing significantly to savings on power purchases. The revenue from energy sales was around ₹350 crores.

Financial Performance Indicators

The company has maintained a robust operational efficiency, with a return on equity (ROE) of approximately 18.5% for FY 2022-2023. The operational strategy focuses on leveraging cost efficiencies and maintaining a diverse product portfolio to mitigate market risks.

Market Position

As of October 2023, Shyam Metalics holds a significant share in the Indian steel market, ranking among the top producers with a capacity of around 2.5 million tonnes per annum (MTPA).

The global steel demand is expected to grow by approximately 2.2% in 2024, providing a favorable outlook for companies like Shyam Metalics that are well-positioned in this sector.