CRISIL Ratings has upgraded Shyam Metalics and Energy Limited’s long-term credit rating to CRISIL AA+/Stable from CRISIL AA/Positive. The upgrade reflects the company’s strong financial profile, prudent capital structure, robust liquidity, operational efficiencies, and consistent business growth. The rating agency also reaffirmed its CRISIL A1+ rating on the short-term bank facilities and commercial paper programme.
Rating Upgrade Rationale
The upgrade to CRISIL AA+/Stable reflects the expectation that Shyam Metalics will maintain its strong business risk profile, driven by a healthy scale of operations and product diversification, while sustaining a strong financial risk profile and liquidity. CRISIL expects scale and diversification to further increase with the ongoing capacity expansion.
Key Rating Strengths
CRISIL noted Shyam Metalics’ established market position in East India, increasing product diversification, and the extensive experience of its promoters. Combined capacities have increased to 15.13 million tonnes per annum (MTPA) as of July 31, 2025. The company focuses on increasing the share of finished and value-added products.
Financial Performance & Outlook
For fiscal year 2025, the consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) was Rs 1,868 crore. CRISIL expects the blended consolidated EBITDA per tonne to increase to over Rs 5,000 by fiscals 2026 and 2027. The company has a strong consolidated financial risk profile and liquidity. As of March 31, 2025, the ratio of total outside liabilities to tangible net worth was 0.45 time.
Capex Plans
Shyam Metalics plans a consolidated capex of Rs 6,500-7,000 crore over fiscals 2026-2028, to be funded largely through internal accruals. CRISIL anticipates the financial risk profile will remain strong over the medium term.
Rating Sensitivity Factors
A significant increase in revenue driven by robust growth across product segments with majority contribution from value-added products, and sustained improvement in the operating margin to above 15% while maintaining a net-debt-free balance sheet, could lead to a further upgrade.
However, deterioration in operating performance due to weakened demand and intense competition leading to a significant decline in operating profitability, or time/cost overruns or higher-than-expected debt-funded capex weakening debt protection metrics, could result in a downgrade.
Source: BSE
