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• Shyam Metalics Q4 FY26 and FY26 results blogpost */

Shyam Metalics FY26: Strong volumes, deeper downstream push

Shyam Metalics and Energy Limited closed FY26 with higher volumes, a stronger March quarter, and a clear push towards downstream products. On a consolidated basis, FY26 revenue from operations stood at INR 18,552.2 crore, up 22.4% year on year. EBITDA for the year was INR 2,536.7 crore, up 21.0%, while profit after tax came in at INR 1,060.5 crore, up 16.6%.

The March quarter added momentum. Q4 FY26 revenue from operations was INR 5,240.4 crore, rising 26.6% year on year. EBITDA increased 32.8% to INR 756.1 crore, while PAT rose 41.7% to INR 311.9 crore. The company also highlighted that sales volume reached 4.94 million tonnes in FY26, implying 26% year on year growth, supported by ramp-up in newer capacities.

A key theme running through both the investor presentation and the concall was the shift towards value-added product categories. While steel products still contribute around three-fourths of revenue, management has been adding new levers such as cold rolled and coated products, stainless steel downstream expansion, and aluminium foil integration.

Financial performance: growth led by volumes and operating leverage

In Q4 FY26, operating EBITDA was INR 726.9 crore and operating EBITDA margin stood at 13.9% versus 12.4% in Q4 FY25. For FY26, operating EBITDA was INR 2,333.0 crore with operating margin of 12.6% versus 12.3% in FY25.

Per the company, the quality of earnings was supported by cost control, product mix improvement and the benefit of captive utilities. In FY26, around 81% of power was sourced from captive power plants, which management highlighted as a margin support in a cost-sensitive sector.

Core financial summary

The balance sheet continued to reflect conservative leverage. At March 2026, gross debt was shown at INR 957 crore and net debt was negative INR 378 crore, indicating net cash after adjusting for liquid investments and cash.

Product mix: downstream products gaining share, but steel remains core

Shyam Metalics has been positioning itself as an integrated ore-to-metal producer, with diversification across carbon steel products, specialty alloys, stainless steel and aluminium foil.

The company’s FY26 revenue mix in the presentation shows a gradual broadening compared to earlier years. In FY26, intermediates contributed 32% of revenue, finished steel 45%, specialty alloys 11%, stainless steel 7%, and aluminium 4.

The Q4 FY26 revenue breakup shared in the presentation provides a more granular view. Carbon steel accounted for 38.7% of quarterly revenue, followed by CR coil and sheets at 14.1%. Aluminium foil contributed 10.3%, iron pellets 9.8%, pig iron 7.6%, and stainless steel 7.3. Sponge iron and specialty alloys together contributed about 9.2%, while the rest was classified as others.

This mix matters because EBITDA per tonne varies sharply by product category. The company disclosed Q4 FY26 EBITDA per tonne across product verticals: carbon steel at INR 7,460 per tonne, stainless steel at INR 8,512 per tonne, specialty alloys at INR 18,780 per tonne, and aluminium at INR 36,562 per tonne.

Capex and commissioning: CRM scale-up and new INR 2,700 crore plan

FY26 was framed as a year of execution and stabilisation. Management highlighted completion of the CRM complex at Jamuria and commissioning of a furnace at the Kharagpur plant during the year.

Cold rolling and coated products at Jamuria

The company described the greenfield cold rolling mill project at Jamuria, West Bengal, spread over 55 acres and approved under the PLI scheme. Products include GI and GL coils and PPGI.

Phase I of 250,000 tonnes was already commissioned, and Phase II of 150,000 tonnes was commissioned in April 2026. Total capex for the project was stated at INR 603 crore, with INR 600 crore incurred and INR 3 crore pending.

In the concall, management said the Galvalume line in the CRM complex was expected to be commissioned by end of the month or early next month, indicating that FY27 should see a fuller year impact from CRM and coated product lines.

Fresh capex approved: SBQ mill and stainless downstream

Alongside the results, the board approved fresh capex of INR 2,700 crore focused on higher value-added growth.

The capex includes:

1. A long and specialty wire rod and bar mill (SBQ) with furnace of 0.8 MTPA, budgeted at INR 900 crore, expected commissioning by March 2029.

2. Expansion of stainless steel with downstream facilities from 0.5 MTPA to 0.6 MTPA, budgeted at INR 1,800 crore, also expected commissioning by March 2029. The downstream package includes SS cold rolling mill, SS precision cold rolling mill, SS hot rolling annealing and pickling line, and SS bright annealing line.

In the concall, management described target end markets for stainless as pipes and tubes, decorative applications, and certain export and specialty categories. They also indicated that the stainless value-added segment could earn higher EBITDA per tonne compared to commodity carbon steel, while emphasising the advantage of integration and captive utilities.

Capital allocation, cash generation and shareholder returns

The company reiterated its preference to fund growth through internal accruals and maintain conservative leverage. The presentation lays out a capital allocation philosophy, including a 70:20:10 approach: 70% towards growth, 20% reserved for liquidity, and 10% allocated to dividends.

Cash flow from operations in FY26 was shown at INR 2,027 crore, while capex spending in FY26 was INR 2,046 crore. The company noted that it remained cash positive even at peak capex cycle.

Dividend payouts have been maintained through the expansion phase. The board recommended a final dividend of INR 2.70 per equity share for FY26, subject to shareholder approval. In FY26, dividend payout ratio in the presentation was shown at 12%, with INR 126 crore distributed as dividend on INR 1,061 crore net profit.

Risks and disclosures to track

The audited consolidated results include an emphasis of matter related to a provisional attachment order issued by the Directorate of Enforcement (ED) on April 15, 2026 on one of the subsidiaries. The note states that specified investments aggregating INR 152.48 crore were provisionally attached for 180 days under the Prevention of Money Laundering Act in connection with an ongoing investigation related to alleged purchase of coal from illegal mining and coal pilferage in certain areas. The management refuted the allegations and stated it is pursuing legal recourse, and that it does not expect any impact on operations and financial statements.

Investors may also monitor working capital movements. The presentation shows inventory days increasing to 123 in March 2026 from 100 in March 2025, while creditor days rose to 132 from 97. In the concall, management attributed the higher inventory to raw material positioning for newly commissioned units like the CRM and blast furnace related operations.

Closing takeaways

FY26 for Shyam Metalics was defined by volume growth, a strong March quarter, and continued downstream integration. The company is building a broader product engine, where CRM and coated products, stainless downstream facilities, aluminium foil expansion and newer initiatives like railway wagon manufacturing sit alongside the traditional ore-to-metal steel base.

The near-term execution will be judged by ramp-up of recently commissioned assets, while the medium-term roadmap is shaped by the INR 2,700 crore capex approved for March 2029 commissioning. Alongside that, the company’s net cash position and operating cash flow generation remain central pillars of its capital allocation narrative.