Detailed Narrative
Q4 & FY25 Performance Overview
Lloyds Metals achieved its highest ever profit before tax and sponge iron production in FY25. The company completed 100% utilization of its 10 million tons iron ore capacity. FY25 revenue grew by 3% year-on-year, and EBITDA increased by 13% to INR 2,005 crores, primarily driven by higher iron ore realizations. However, Q4 FY25 saw subdued iron ore sales volumes at 1.66 million tons and muted realizations for sponge iron and power, leading to lower absorption of fixed costs and subdued margins, exacerbated by INR 13 crores in ESOP costs and INR 17-18 crores in community development expenses.
Aggressive Project Commissioning & Capex Plans
The company is undertaking significant expansion projects, with a guided capex of INR 6,000-6,500 crores for FY26, focused on mining, pellet, and steel capacities. Total announced capex over the next 5-7 years is INR 32,000-33,000 crores. Key projects are progressing rapidly: the slurry pipeline is commissioned, the 4 million ton pellet plant is under pre-commissioning (EC received Nov '23), and the 360,000 ton DRI plant and 60-megawatt power plant (EC received Feb '24) are expected to commission one unit in June '25 and the other in July '25.
Thriveni MDO Acquisition Update
The acquisition of the Thriveni MDO business is awaiting NCLT approval, which is expected by Q1 FY26. Management views this as a major milestone that will unlock significant opportunities, noting that cultural integration between the two entities has already begun, with teams bonding well and aligning with the company's growth objectives.
Iron Ore Market Dynamics & Outlook
The Indian iron ore market remains buoyant, with the steel market growing at an 8% production rate and the iron ore market at 5-6%. Management believes that despite potential increases in supply, strong domestic demand and the company's quality will ensure absorption without impacting pricing. They anticipate selling 70-75% of their material within a 400-600 km radius of the mine or pellet plant.
BHQ Project Development & Long-Term Reserves
The pilot plant for Banded Hematite Quartzite (BHQ) is performing well, with technology inputs being refined to reduce processing costs. Engineering for the overall project is underway in China. Permissions for ground progress are anticipated by Diwali 2025, with the first beneficiation plant train expected by June/July 2027, and subsequent trains by March 2028 and July 2028, targeting 5 million tons output from 15 million tons input. The company has total reserves of about 850 million tons, with BHQ transition expected to be complete by 2033-2034.
Industrial Promotion Scheme (IPS) Benefits
The company received INR 72 crores in IPS benefits for old projects last year. For new projects, IPS accrual begins upon operation, with an estimated cash flow of INR 35-40 crores expected in FY26. The IPS is capped at 150% of investment in Gadchiroli and 115% in Chandrapur, reimbursed over a maximum of 12 years, accruing towards local sales GST and royalty for captive consumption.