Lloyds Metals And Energy Q1 FY27 earnings call

Lloyds Metals And Energy Limited reported an outstanding Q1 FY27, with consolidated revenue reaching ₹7,354 crores, more than tripling year-on-year. Stand-alone revenue grew 127% YoY and 10% QoQ to ₹5,413 crores, while stand-alone EBITDA surged 172% YoY and 31% QoQ to ₹2,120 crores. The company also achieved a significant milestone during the quarter, crossing a market capitalization of ₹1,00,000 crores, reflecting strong investor confidence in its growth trajectory.

The company achieved its best-ever stand-alone EBITDA margin of 39.2%, expanding by a remarkable 639 basis points YoY and 631 basis points QoQ. This significant improvement was primarily attributed to the commissioning of the slurry pipeline, which structurally lowered logistics and freight costs for iron ore by ₹550 per ton. Additionally, a favorable product mix with value-added products like pellets now contributing 41% of stand-alone revenue and 40% of EBIT (up from 13% and 2% a year ago, respectively) played a crucial role in enhancing profitability.

The second pellet plant, commissioned in May 2026, demonstrated rapid operational efficiency by achieving 100% capacity utilization within just four months. This contributed to a pellet production volume of 1.69 million tons for the quarter, with a healthy realization of ₹11,783 per ton and an EBITDA of ₹5,803 per ton. Overall iron ore production stood at 6.05 million tons, marking a 53% year-on-year increase, while DRI sales volume grew 133% year-on-year to 183,920 tons.

Lloyds Metals incurred ₹3,005 crores in capex during Q1 FY27, adding to the ₹13,513 crores spent from FY24-FY26. The company has ambitious multi-year capex plans, projecting ₹8,500 crores for domestic projects in FY27, ₹11,000-11,500 crores over the next 2-3 years, and ₹15,000-20,000 crores in the third year. This includes a $300 million investment in the Copper JV over the next 9 months, targeting an 8x growth in copper production to 96,000 tons by Q1 FY28, and commissioning the first 1.2 million ton long product steel plant by March 2027.

The Thriveni subsidiary delivered robust results, with revenue growing 63% year-on-year to ₹2,672 crores and EBITDA increasing 145% year-on-year to ₹658 crores, achieving margins of 24.63%. Iron ore volumes, including BHQ, nearly doubled to 19.09 million tons. The Gadchiroli ROM handling capacity was significantly enhanced from 10 MTPA to 55 MTPA, producing 12.83 million tons this quarter. Odisha volumes are projected to grow 39% YoY to 34-35 million tons in FY27, supported by new mining projects like Laserda-Pacheri (1.5 MTPA target) and Dalpahar (3 MTPA target).

The company reported stand-alone net debt of ₹5,616 crores and consolidated net debt of ₹19,000 crores, with a significant portion attributed to the Chemaf acquisition. Management is actively renegotiating the terms of the Chemaf acquisition and expects financial closure in the next quarter. This restructuring is anticipated to lead to a substantial reduction of 40-50% (or $700-800 million) in consolidated debt, primarily by refinancing and removing accrued interest penalties, thereby improving the company's financial health.

Beyond current projects, Lloyds Metals is focused on several strategic initiatives. The BHQ beneficiation plant is targeted for commissioning by March 2028, aiming for an annual output of 16-17 million tons from a 30 million ton throughput capacity. The company is also expanding its green logistics fleet by adding 200 electric and LNG vehicles, which is expected to increase logistics EBITDA from 32% to 40%. These initiatives underscore a commitment to both capacity expansion and operational cost optimization.