Shyam Metalics share zooms 8% today; chart reveals this make-or-break level

Shyam Metalics share price: The small-cap metal company is etsting the super trendline resistance of Rs 804 per share, as per the daily charts

Shyam Metalics and Energy share price (Shyam Metalics share price) soared 8.2 per cent on the BSE on Friday, January 3, 2025. Shyam Metalics share price hit an intraday high of Rs 802 today, on the back of heavy volumes.   

At 1:05 PM, Shyam Metalics share was up 6.18 per cent on the BSE as against a 0.5 per cent dip in the benchmark BSE Sensex today.

 

Till the time of writing this report, 89,000 shares had changed hands on the counter on the BSE compared with a two-week average volume of 17,000 shares. Combined with the volume on the NSE, roughly 3.75 million shares have changed hands on the counter so far in trades.

 

 

Shyam Metalics is one of the largest producers of ferro alloys in terms of installed capacity and the fourth-largest player in the sponge iron industry. It is engaged in the production of long steel products such as Iron Pellets, Sponge Iron Steel Billets, TMT Structural Products, and Wire Rods.

 

Analysts at ICICI Securities have a ‘Buy’ rating on Shyam Metalics with a share price target of Rs 975 per share.

 

Shyam Metalics Financials

For the September 2024 quarter (Q2FY25), Shyam Metalics’ consolidated total Income stood at Rs 3,708.61 crore, up 1.26 per cent a total income of Rs 3,662.480crore reported in Q1FY25 and 24.49 per cent higher than Rs 2,978.93-crore total income of Q2FY24.

 

The company reported net profit after tax of Rs 215.63 crore in Q2FY25.

 

According to analysts, Shyam Metalics and Energy (SMEL) is rapidly evolving into one of the most diversified metal companies in India while significantly expanding its capacities in the value-added segment.

 

Under its capex programme of Rs 10,000 crore, Shyam Metalics aims to increase its return on invested capital (RoIC) from 14.5 per cent in FY24 to 19.6 per cent by FY27. This improvement, analysts said, reflects the efficiency of the company’s investments and the expected impact on profitability.

 

With a projected incremental RoIC of 35-40 per cent from the new investments, SMEL’s focus on high-return projects will enhance shareholder value and provide an attractive return on capital, making the company an appealing investment proposition for long-term growth, said those at B&K Securities.

 

“We believe the overall topline could grow at a CAGR of 31 per cent (FY24-27E), with Ebitda margins exceeding 12 per cent and a return on equity (RoE) of 17.5 per cent. We are initiating coverage of the stock with a ‘Buy’ rating and a target price of Rs 1,028,” the brokerage had said in November 2024.

 

Shyam Metalics share price chart:

With today’s intraday high of Rs 802, Shyam Metalics share came close to the 50-day moving average of Rs 812, while testing the super trendline resistance of Rs 804 per share, as per the daily charts.

 

The stock is seeking support at Rs 738 per share, its 200-DMA. As long as it stays above this level, it may attempt to breach the said DMAs for further upmove. Shyam Metalics immediate resistance is at Rs 789 (20-DMA), Rs 803 (super trendline), Rs 813 (50-DMA), and 832.5 (100-DMA).

 

However, in case the stock breaks the support of Rs 738, it may fall towards Rs 693 levels. Below this, the next support is at Rs 565, its 100-week moving average.