Global brokerage firm UBS maintained its bullish outlook on Shyam Metalics and Energy in its recent note, expecting the stock to rise another 40% from current levels, even as it has gained 26% so far this year.
It has retained its 'buy' rating on the stock with a target price of ₹1550, indicating an upside potential of 45.25% from the stock's Wednesday closing price of ₹1067 apiece, as it believes the market does not fully appreciate management's execution track record, diversification benefits, and efficient operations.
In terms of valuations, the brokerage pointed out that the stock trades at 7.5x one-year forward EV/EBITDA, in line with the three-year average, leaving room for multiple expansion.
In its note, the brokerage highlighted three key reasons for its strong outlook: disciplined capital allocation, superior project execution, and efficient operations—the key differentiators for a commodity company.
UBS’ review of completed and upcoming projects indicates that Shyam delivers capex at a lower cost and with shorter timelines than industry averages, supporting superior ROIC and faster growth.