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Technical Report on Sarda Energy & Minerals Limited by Shyam Advisory

March 14, 2022

Incorporated in 1973, Sarda Energy & Minerals Limited (SEML) is the flagship
company of Sarda Group and is engaged in the production of steel, ferro alloys and
power. .
Products and Capacities
Ferro Alloys (39% in FY21 vs 40% in FY20): Ferro alloys are high value added
products used for manufacturing of mild steel and special steel. Production capacity
of 111 MVA.
Steel – billets, wire rods and HB wire (28% in FY21 vs 27% in FY20): Billets
are semi-finished steel products while Hot rolled products are made from direct hot
billet charging. Production capacity of Billets – 3 lakh MT, Wire rods – 1.8 lakh MT
and HB wires – 30,000 MT.
Sponge Iron (11% in FY21 vs 13% in FY20): Produced by reducing Iron Ore
using non-coking coal. It is used to produce steel billets. Production capacity of 3.6
lakh MT.
Pellet (15% in FY21 vs 10% in FY20): Mainly used for production of Sponge
Iron. Production capacity of 8 lakh MT.
Power (4% in FY21 vs 5% in FY18): Power generated through Hydro projects
(143 MW capacity) as well as thermal projects (162 MW capacity).
Others: 3% in FY21 vs 5% in FY20.
Geographical Split (FY21)
Domestic: 85% vs 83% in FY20
Exports: 15% vs 17% in FY20
The Co expanded Iron Ore Pellet capacity by 2 lac MMT to 8 lac MMT in March
2021. It also completed a113 MW hydro power project at Sikkim which
commenced operations in June 2021.
It isexpanding Ferro Alloys capacity by 36 MVA to 147 MVAwhich is likely to be
completed by FY23. Further, construction of a 24.9 MW Hydro Power plant on the
Rehar river in Chhattisgarh has started and is expected to be completed in FY25.

Backward Integration
The Co is backward integrated with most of the raw material sourced captively.
The captive iron ore mine has a capacity of 1.5 MMT. The captive thermal and
waste heat power plant have a combined power generation capacity of 161.5 MW,
fulfilling100% of the power requirement of the Co. Further, the Co has recently

won two coal mines in Chhattisgarh and MP with a combined capacity of 1.8
MMT, adequate for the entire captive consumption of the Co.

Diversified Product Offering
The Co has diversified its revenue base across sale of intermediate and finished steel
products, ferroalloys, surplus power from the captive power plant and hydro power.
This gives the Co flexibility in terms of shifting through different products across
business cycles, thereby sustaining margins.
Hydro Power
The Co has three operational hydro power projects in Uttarakhand, Chhattisgarh
and Sikkim with a combined capacity of 143 MW. It has signed long term PPAs
with state discoms for supply of power. Further, construction of a new 25 MW
hydro power project in Chhattisgarh has commenced and is expected to
commercialise by FY25.
Locational Advantage
The Co enjoys locational advantages in terms of proximity of captive mines from
plants. The captive iron ore mine and the recently acquired coal mine is located
within 200 KM from the manufacturing facilities of the Co, improving operating
Investment in Associates
The Co’s equity investments in subsidiaries (excluding Sarda Metals and Alloys
Ltd), joint ventures and controlled entities were around Rs 608 crore (29% of the
tangible net worth) as on March 31, 2021. These investments are in entities with
weaker credit risk profiles as well as back-ended returns.
Other Income
The Co earned other income of 144 crores (6% of total income) in FY21 on account
of Fair value gain on Financial Instruments.
Contingent Liabilities
The Co has contingent liabilities of 526 crores as of March 2021.

sardean chart - Shyam Advisory

Technical View: Sarda Energy & Minerals Limited, Structured Formation on
daily chart looks positive. Stock had long waited breakout with strong Bullish
candle, RSI divergence indicate Buying signal. We may see some sell off from
present level and test the breakout level which is at1020 said level willact as a
storng support.

Volume analysis: – 1 Day Delivery volume Increase by 299.43% over 5 day average,
However; 1 Month: Delivery volume increase by 14.52% , This stock may generate
more volumes in upcoming sesions,hence; We recommend BUY signal for this
share . Buying can be done above 1077 for Target 1130, Target 1200, Use Strict
stop loss 1000.

Moving Averages: -Sarda Energy & Minerals Ltd. is trading higher than 5 day, 20
day, 50 day, 100 day and 200 day moving averages
5 Day 942.54             50 Day 835.61          200 Day 747.97
20 Day   855.85        100 Day 821.12

Shareholding pattern:-

sp - Shyam Advisory


The Promoter holdings 72.05% %. No change in Promoter holdings. No change in
Promoter pledged shares.

Key Ratio:-

key ratio - Shyam Advisory