Multibagger Shyam Metalics share price drops 14% from all-time high amid Q2 results, profit booking. Should you buy?
- Multibagger Stock: Shyam Metalics shares fell after a 55% profit decline to ₹216 crore in Q2, despite revenue growth. The drop was due to deferred tax asset adjustments. The stock has seen a 7% loss in two sessions and a significant decline from its all-time high.
Multibagger stock Shyam Metalics share price continued to decline for the second consecutive session on Friday after the release of its Q2 results, which revealed a 55% drop in net profit to ₹216 crore for the quarter ending September 2024, despite solid revenue growth.
The decline in profits for the quarter was attributed by the company to an adjustment of ₹328 crore related to deferred tax assets and the reversal of the Income Tax provision due to carried forward losses from the acquisition of Mittal Corp Ltd the previous year.
The revenue for the quarter was ₹3,634 crore, marking a 23.6% increase compared to the same quarter that ended in September 2023, according to a statement from the company.
“We are pleased to report that Q2 FY25 has been a steady quarter for us, despite industry challenges. Our revenues in the quarter grew by 24% YoY to INR 3,634 crores while Operating EBITDA saw a growth of 32% YoY to INR 407 crores. This reflects our ongoing financial robustness and strategic expertise. We are witnessing an improved product mix, with higher contribution from our key products. We are fully committed to staying on course with our growth plans,” Brij Bhushan Agarwal, Vice Chairman & Managing Director of the company.
Furher, Agarwal pointed out that in the recent quarter, the company successfully initiated operations at a Cold Rolling Mill with a capacity of 0.25 MTPA and a Coke Oven Plant with a capacity of 0.45 MTPA at their Jamuria facility in West Bengal. This represents a significant step forward in their efforts to grow strategically. This progress is expected to greatly enhance their revenues and profit margins in the forthcoming quarters.
Shyam Metalics share price today
Shyam Metalics share price today opened at an intraday high of ₹858.10 apiece, the stock touched an intraday low of ₹820.25 per share on BSE. In the two consecutive session, the multibagger stock has lost about 7%, and is down about 14.20% from its all-time high levels of ₹956.05. According to Trendlyne data, the stock has increased approximately 133.02% over the last three years and 85.09% over the past year.
Rajesh Bhosale, Equity Technical and Derivative Analyst at Angel One, stated that Shyam Metalics share price witnessed profit booking in yesterday's session, and today further weakness is observed. Going ahead, the next support is at 820, whereas 900 is resistance. Prices are likely to remain within this range, and the next directional move would be seen on a range breakout beyond the mentioned levels. Bhosale believes it's not a good time for investors to enter at current levels.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.
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