Metals And Mining Sector Stock Rallied 4.91%, Buy For 105% Strong Gains, Says ICICI Securities

Brokerage firm ICICI Securities has a "Buy" on Shyam Metalics and Energy Ltd. (SMEL) with a target price of Rs 570/share. ICICI Securities perceive more than 100% upside in SMEL's stock price from the current Market Price (CMP). The stock is likely to give a strong gain of up to 105% from its CMP.

SMEL is a midcap Metals and Mining Sector stock having a market capitalisation of Rs 7,116.75 crore. The company is engaged in the manufacturing of long steel products such as iron pellets, sponge iron steel billets, TMT structural products, wire rods, and ferroalloys.

Stock Performance & Outlook

The stock of SMEL on Friday rallied 4.91% and closed at Rs 279/share. On 16 March 2023, the stock recorded its new 52 week low at Rs 263 apiece. Whereas, it recorded 52 week high on 24 March 2022 at Rs 385.50 apiece. It was listed on 24 June 2021.

Since its listing, it has fallen 25.83%. It declined 0.23% in 1 week. In 1 month it declined 4.04% and in 3 months, it declined 4.17%. In the past 1 year, it declined by 19.69%.

Outlook and valuations

ICICI Securities said, "We find SMEL best placed among steel companies under our coverage as a result of its attractive growth prospects. On valuations, the stock is trading at 2.4x FY25E EBITDA - lowest among peers."

It added, "We recommend SMEL as the top pick among steel players under our coverage with a revised target price of Rs570 (earlier Rs425) on 4.5x FY25E EBITDA. In the near term, we see the required dilution of promotors' stake to 75% by Jun'24 (currently at 88.35%) as the key risk to stock performance."

Disclaimer

The stock has been picked from the brokerage report of ICICI Securities. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.