Shyam Metalics plans Rs 10k cr capex to increase capacity, Rs 40k cr topline in 2031 vision document

Kolkata, Oct 16 (PTI) Shyam Metalics and Energy Ltd (SMEL) on Thursday announced its growth blueprint for 2031, outlining a Rs 10,000 crore capital expenditure plan to enhance production capacity and targeting a 2.5-fold increase in topline to Rs 40,000 crore.

The company plans brownfield expansion across West Bengal, Odisha, and Madhya Pradesh to minimise execution risks and optimise returns on capital employed, a statement said.

The company aims to expand its aggregate production capacity from 15 million tonnes to 27 million tonnes by 2031, and targets a 2.5-fold increase in topline to Rs 40,000 crore, it said.

The growth will be driven by expansion in speciality and stainless steel, flat products, and aluminium segments, with a sharp focus on downstream and high-value applications in defence, railways, engineering, and real estate, the company said.

SMEL claimed that it will invest about Rs 10,000 crore, largely from internal accruals, towards technology upgrades, process innovation, energy efficiency, and downstream integration.

It expects EBITDA margins to improve by 200-300 basis points after the expansion, aided by operational leverage and better product mix realisation.

The Kolkata-headquartered company also aims to double its export revenue from USD 150 million to USD 300 million.

To support its cost efficiency and raw material security, the company has recently secured iron ore mining assets in Maharashtra and will continue leveraging European technology partnerships for value-added product development, the statement said.

Analysts pointed out the Vision 2031 capacity expansion to 27 MTPA is "operationally feasible, but financial targets carry high risk".

Achieving the EBITDA margin improvement by 200-300 basis points depends on market conditions, they said.

Cost benefits from the newly secured captive iron ore assets are likely to be delayed beyond the 2031 timeline due to lengthy regulatory processes, according to them.

The claim that the Rs 10,000 crore capital expenditure will be funded mostly from internal accruals is "unconvincing", given its past cash flows, the analysts said. PTI BSM BDC