Target: ₹1,175

CMP: ₹852.75

Shyam Metalics and Energy Ltd (SMEL) is the second largest manufacturer of aluminium foil in India and is expected to be a key beneficiary of the anti-dumping duty (ADD) announced on Chinese aluminium foil imports. We expect SMEL to generate ₹1-1.25 crore additional EBITDA over the next 2 years on the back of the ADD and additional aluminium foil capacity coming online.

Additionally, the 12 per cent safeguard duty announced on steel products is expected to lead to improving EBITDA/t for the colour coated sheets business of SMEL. We build these advantages into our estimates, increasing our FY26/27E EBITDA by 2/4 per cent leading to an increased PT of ₹1,175 (earlier ₹1,150).

SMEL has an existing aluminium foil capacity of 26,400 MT (annual) and is in works to increase this by an additional 18,000MT. Currently, the EBITDA/t is roughly ₹35,000/t which post the ADD is expected to increase by ₹20,000/t.

SMEL is the most diversified metals player with a robust execution track record of delivering capacities on time. It has spent ₹5,900 crore on capex until 9MFY25 as part of its 5-year capex plan, which began in FY23 and will spend ₹410 crore in Q4. Upcoming units in the next few quarters are oxygen plant, captive power plant, beneficiation unit, small stainless steel units, etc.