Lloyds Metals - Strong Performance Led By Higher Volumes: Systematix

Systematix Report

Lloyds Metals and Energy Ltd. established in 1977, the company is one of India’s largest merchant iron ore miners, operating at 10 million tonne iron ore capacity slated to increase to 55 million tonne (including banded hematite quartzite) in the near future.

Lloyds Metals reported Q1 FY25 revenue of Rs 24.2 billion (+23%/+56% YoY/QoQ), Ebitda of Rs 7.2 billion (+34%/+57% YoY/QoQ), and Ebitda margin of 29.7% (+247 bps/+24 bps YoY/QoQ). The company reported iron ore sales of 3.6mt, registering 13%/82% YoY/QoQ growth. Direct-reduced iron and power sales were reported at 76 kt (+14% YoY/QoQ) and 49 million units (-1%/+3% YoY/QoQ), respectively.

The iron ore segment reported Ebitda/tonne of Rs 1,738/tonne, a growth of 21% YoY but fell 18% sequentially. DRI segment Ebitda/tonne during the quarter came in at Rs 7,666/t (-6%/+217% YoY/QoQ). Lloyds Metals and Energy has laid out plans to become an integrated steel producer with a greenfield capacity expansion of 4.2 mt (3 mt flat products and 1.2 mt long products with a focus on value addition).

Lloyds Metals and Energy is currently debt free and has a capex plan of Rs 330 billion, which it intends to fund largely through internal accruals. The company’s Q1 FY25 capital expenditure was Rs 5.98 billion and guides for a capex allocation of Rs 33 billion/Rs 65 billion in FY25/FY26.

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