Lloyds Metals And Energy Limited — Q4 FY26 earnings call

Call held 6 May 2026

Management summary

Lloyds Metals delivered an exceptional Q4 and full-year FY26, marked by robust financial growth, record operational volumes, and strong margin expansion. The company made significant strides in strategic projects, including capacity ramp-ups in iron ore and pellets, and expanded into the critical copper sector through acquisitions and new plant commissioning. While facing minor challenges like sequential pellet realization decline and initial copper supply issues, management provided clear guidance for future growth and capital allocation, emphasizing cost efficiency and value-added product mix.

Highlights

  • Consolidated revenue crossed INR17,000 crores, fast approaching the $2 billion mark.

  • Standalone PAT for FY26 reached INR3,100 crores, and consolidated PAT INR3,829 crores.

  • Iron ore production grew 120% YoY to 22 million tons in FY26, demonstrating significant volume growth.

  • Pellet plant achieved 100% capacity utilization within just 4 months of commissioning, an exceptional execution outcome.

  • EBITDA margin held steady at approximately 34% across both the last two quarters, with full year standalone EBITDA margin at 33.77% (up 418 bps YoY), reflecting structural cost efficiency.

  • Acquired 49% in CHEMAF Group, strategically entering the critical minerals sector and defining a pathway to 100,000 tons of copper production.

Concerns

  • Pellet realization was down sequentially in Q4 FY26 due to the need to search new markets and increased exports.

  • Sulfuric acid supply shortages impacted initial production volumes at the Surya copper plant, though management expects resolution within 3 months.

  • Consolidated receivables increased significantly from INR171 crores to INR1,480 crores (3.24x increase), which management committed to investigate and clarify.

Key financials

3 periods

Q4 FY26 Standalone

  • Total Income
    ₹4,977 Cr
    YoY +310%
  • EBITDA
    ₹1,679 Cr
    YoY +498%
  • EBITDA Margin
    33.7%
  • PAT
    ₹1,066 Cr
    YoY +368%

FY26

  • Iron Ore Production
    21.96 million tons
    YoY +120%
  • Iron Ore Sales Volume
    16.18 million tons
    YoY +71%
  • Pellet Production
    3.03 million tons
  • DRI Sales Volume
    0.48 million tons
    YoY +56%

FY26 Standalone

  • Total Income
    ₹13,838 Cr
    YoY +104%
  • EBITDA
    ₹4,673 Cr
    YoY +133%
  • EBITDA Margin
    33.8%
  • PAT
    ₹3,194 Cr
    YoY +120%

What they filed

Q1 FY27: revenue up 127.4%, net profit up 140.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,436 1,675 1,193 2,380 2,548 +77%3,840 +129%4,913 +312%5,413 +127%
EBITDA411 537 261 780 842 +105%1,280 +138%1,614 +518%2,120 +172%
Net profit301 390 202 635 606 +101%889 +128%1,066 +428%1,527 +140%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of EBITDA
₹2,900 Cr Total
  • Thriveni (Full Year FY26) ₹1,990 Cr 68.6%
  • Thriveni (Q4 FY26) ₹910 Cr 31.4%

Capital allocation

high confidence
  • Capex ₹8,100 Cr internal accrual-led funding
    • Total capex incurred FY24-FY26 ₹13,500 Cr
    • Capitalized assets (Pellet Plant 1, slurry pipeline, DRI plant) ₹5,100 Cr
    • Capital advances ₹1,850 Cr
    • Remaining capex for Konsari unit (excluding ISP) over next 2 years ₹14,500 Cr
    • FY27 capex plan (includes BHQ plant, ISP Chandrapur, Thriveni, copper) ₹10,000 Cr
    • FY28 capex plan (includes larger steel plant at Konsari, copper) ₹12,500 Cr
    • Thriveni capex for current year ₹1,000 Cr
    In the last 4 years, and this will continue. Konsari, in Gadchiroli, we have completed the 2 pellet plants reaching capacity of 8 million tons, making us the largest merchant pellet player by far. And we also commissioned along with the 85-kilometer slurry pipeline, which is delivering now cost savings and operational stability. In the mine at Hedri, we have completed our mine capacity increase from 3 million to 55 million tons with a sellable output of 26 million tons over the last 4 years. The BHQ beneficiation progressing. Pilot plants results have delivered excellent yields and major engineering contracts are completed, construction machine mobilized. All major machines are ordered on a key European supplier, and we are well in target of first phase readiness by December 2027. This plant, the BHQ beneficiation is a trailblazer in India and will lead to greening of our company in a steel cycle in very dramatic ways. Meanwhile in Chandrapur, the DRI capacity doubled, our power capacity has tripled to a stable 100 megawatts, sorry, and it is stabilized. The steel plant that is a blast furnace, arc furnace, coke oven and rolling mill of 1.2 million tonne wire rod is well underway for commissioning for last quarter this year. The engineering of this third pellet plant is also nearing complete in Chandrapur, along with a 195-kilometer pipeline from Hedri to Ghugus via Chandrapur stockyard. This pipeline will reduce logistic cost for most of the iron ore output by us by more than INR500 a ton and is in advanced planning stage. Coming for the capex update, the company has incurred capex of approximately INR13,500 crores during FY24 to FY26. FY26 stand-alone capex alone was close to INR8, 100, reflecting the significant investment phase we are currently in. Key projects funded into 2 pellet plants, TRI expansion, slurry pipeline and the ongoing capex of the steel plant. Importantly, capex execution is on track and within approved budgets. To give further color on capex of INR13,500 crores, we have capitalized INR5,100 crores of assets comprising mainly of pellet plant 1, slurry pipeline and the DRI plant. INR1,850 crores is capital advances, remaining is CWIP, which you can see is in our published numbers. Next year, our plan is around between INR10,000 crores to INR11,000 crores is what we are planning to spend because that will include a lot of portion from the BHQ plant and the ISP at Chandrapur. It should be around INR10,500 crores. And next year, it should be INR12,500 crores plus, yes, in '27, '28 by that time, we would be clear on the larger steel plant at Konsari and also the copper. So all those expenditures will be further included in this and should be a larger number. So actually, majority of the copper investment will get done in FY27. So we should have the revenues and profitability from copper coming in from FY28 because as I said the plants are near about 85% to 90% complete. So we want to get them running ASAP and that's why a large part of the capex will actually be done this year. And to this we would have to add Thriveni capex. Although, since you asked for consolidated, Thriveni capex would be around INR1,000 crores this year in the coming year this current year.
  • Debt Net ₹3,901 Cr
    • Repayment RPS (Revenue Share Payment) paid in April for Thriveni ₹700 Cr
    Stand-alone net debt as on 31st March 2026 stands at INR3,901 crores, a manageable level given our EBITDA generation. Despite an intensive capex cycle, the balance sheet remains comfortable. Strong EBITDA has supported internal accrual-led funding and controlled leverage.
  • M&A CHEMAF Group Acquisition · Closed

    Entry into critical minerals, strategic realignment in global critical minerals.

    Acquired 49% stake. Total debt of $800 million, reduced by $475 million through negotiation, balance $330 million non-recourse. Additional $200 million borrowing for completion, non-recourse to LMEL.

    In addition, we have acquired 49% in CHEMAF Group. This is the first year after the U.S. and Congo signed a critical mineral agreement in December 2025, and we are proud to be at the forefront of the strategic realignment in global critical minerals. CHEMAF is a large operating copper cobalt platform in the Katanga copper belt with 50-plus permits. Cobalt capacity is expected to scale to approximately 20,000 tons in the 2 operating plants. Along with this, we will be achieving 100,000 tons of copper over the next 3 to 5 years from both CHEMAF and Surya. The total debt which is there on the books of Chemaf is around USD800 million. Large creditors, mostly we have negotiated. And effectively, once we pay out those creditors, this debt will be reduced by 475 million. So that's the amount of negotiation that has been done. And the balance of the debt which will be remaining on the books, which is near about USD330 million, that is fully non-recourse and it will stay at the company level at Chemaf. Also, we are negotiating on that with some of the smaller parties, which are there. So we'll go through that process and possibly we can also receive some benefits from there. So that's broadly the current debt. For completing the plant, possibly we'll borrow additional $200 million, which will also be nonrecourse to LMEL and borrowed at the asset level because the asset itself is near about $1 billion, which is already put on the ground.
  • M&A Surya copper plant Acquisition · Integrated

    Successful commissioning of the Surya copper plant in 6 months.

    Expected to produce 9,000-10,000 tons of copper in FY26.

    I want to congratulate his team and him for successful commissioning of the Surya copper plant in 6 months. We are the first Indian integrated player in the copper business. Copper is the backbone of energy transition, electrification and renewables. It is a perfect point to our one mine portfolio and also our international entry into critical minerals. We have defined pathway to expand capacity to 30,000 tons per annum at Surya mines.
  • Liquidity Liquidity disclosed Strong EBITDA has supported internal accrual-led funding and controlled leverage. Working capital continues to be well managed, held by faster dispatch cycles and healthy demand conditions.
    Strong EBITDA has supported internal accrual-led funding and controlled leverage. Working capital continues to be well managed, held by faster dispatch cycles and healthy demand conditions.

Guidance & targets

Volume

  • Iron Ore Production Volume · FY27 · High confidence 26 million tons
    Our FY '27 guidance reflects the next change in our scale, iron ore production at 26 million tons

    — Rajesh Gupta, Managing Director

  • Iron Ore Dispatches Volume · FY27 · High confidence 27 million tons
    dispatches of 27 million tons

    — Rajesh Gupta, Managing Director

  • Pellet Production Volume · FY27 · High confidence 7.75-8 million tons
    pellet of 7.75 million to 8 million tons

    — Rajesh Gupta, Managing Director

  • DRI Production Volume · FY27 · High confidence 825,000 tons
    DRI at 825,000 tons

    — Rajesh Gupta, Managing Director

  • Wire Rod Mill Production Volume · FY27 · High confidence 150,000 tons
    a formal entry into steelmaking with wire rod mill production at around 150,000 tons.

    — Rajesh Gupta, Managing Director

  • Thriveni Odisha Operations Volume Increase Volume · FY27 · High confidence 39%
    Overall, the Odisha operation volumes are expected to increase by 39% year-to-year to 34 million tons to 35 million tons in FY27.

    — S.K. Naredi, Director of Finance

  • Copper Production (CHEMAF + Surya) Volume · next 3 to 5 years · High confidence 100,000 tons
    Along with this, we will be achieving 100,000 tons of copper over the next 3 to 5 years from both CHEMAF and Surya.

    — Rajesh Gupta, Managing Director

  • Copper Production (Surya) Volume · FY26 · Medium confidence 9,000-10,000 tons
    I think we are looking at producing a total of around 9,000 to 10,000 tons of copper for the financial year ending this year.

    — Management

  • Pellet Plant Production (2nd Plant) Volume · current year (FY27) · High confidence 7.5-8 million tons
    We hope to repeat that in the second plant as well. And therefore, we hope to achieve 7.5 million to 8 million tons in this complete year.

    — Rajesh Gupta, Managing Director

Cost Savings

  • Annual Cost Savings Cost Savings · by March '28 · High confidence >INR2,000 crores
    We expect annual cost savings to surpass INR2,000 crores per annum as all logistics and sustainability initiatives are maturing by March '28.

    — Rajesh Gupta, Managing Director

  • Logistic Cost Reduction (Slurry Pipeline) Cost Savings · null · High confidence >INR500 per ton
    This pipeline will reduce logistic cost for most of the iron ore output by us by more than INR500 a ton and is in advanced planning stage.

    — Rajesh Gupta, Managing Director

Project Readiness

  • BHQ First Phase Readiness Project Readiness · December 2027 · High confidence December 2027
    All major machines are ordered on a key European supplier, and we are well in target of first phase readiness by December 2027.

    — Rajesh Gupta, Managing Director

Profitability

  • Thriveni Geomysore Gold Mining EBITDA Contribution Profitability · FY27 · Medium confidence INR60 crores
    January '26, we have a targeted EBITDA contribution of approximately INR60 crores in FY27, a meaningful new revenue stream with further upside as exploration progresses.

    — S.K. Naredi, Director of Finance

  • BHQ Beneficiated Ore EBITDA Profitability · once commissioned · High confidence Up
    So we think that the EBITDA will go up once the BHQ is commissioned.

    — Rajesh Gupta, Managing Director

Capacity

  • Copper Capacity (Surya) Capacity · null · High confidence 30,000 tons per annum
    We have defined pathway to expand capacity to 30,000 tons per annum at Surya mines.

    — Rajesh Gupta, Managing Director

  • Pellet Plant Capacity (Total) Capacity · FY27 · High confidence 8 million tons per annum
    This takes our total pellet capacity to 8 million tons per annum and positions us strongly for FY27 volume growth.

    — Management

  • Pellet Plant Capacity (Debottlenecking) Capacity · end of FY27 · High confidence 10 million tons
    We are studying and applying to the government for relevant permissions. We should get that by year-end by FY'27, so next year we will see an increased production in that. So that will be for both the pellet plant or only the first pellet plant? Yes, both the pellet plants. So effectively, we can go to 10 million tons of pellet capacity with these two plants?

    — Rajesh Gupta, Managing Director

Project Commissioning

  • Steel Plant (Chandrapur) Project Commissioning · last quarter this year (FY27) · High confidence Commissioning
    The steel plant that is a blast furnace, arc furnace, coke oven and rolling mill of 1.2 million tonne wire rod is well underway for commissioning for last quarter this year.

    — Rajesh Gupta, Managing Director

Project Completion

  • Slurry Pipeline Phase 2 Project Completion · within 2 years · High confidence Completed
    The Phase 2 slurry pipeline is the 16 million tons what we are planning. This is -- the plants for the entire capex to be completed within 2 years, as we mentioned earlier also.

    — Riyaz Shaikh, Chief Financial Officer

What to watch in Q1 FY27

Consolidated Receivables Clarification

Next quarter
Current INR1,480 crores (up 3.24x YoY)
Target Management explanation for increase and plan for reduction

Why it matters

A significant increase in receivables could impact working capital and cash flow; management promised to clarify this in the future.

The receivables increased from INR171 crores to INR1,480 crores on a consolidated number that is 3.24x... We don't have a clear cut answer on why exactly that movement is there. We'll come back very shortly on that.

Risks & concerns

  • Operating in Congo (challenging geography)

    medium

    Management acknowledged Congo as a 'new territory' with historical challenges, but emphasized mitigation through partnership with the U.S. and a strategic critical minerals deal.

    Analyst acknowledged

  • Significant increase in consolidated receivables

    medium

    Consolidated receivables increased from INR171 crores to INR1,480 crores (3.24x increase), which management could not immediately explain and committed to investigate and clarify later.

    Analyst not addressed

  • Sulfuric acid supply shortages for Surya copper plant

    low

    Initial supply shortages for sulfuric acid led to slightly lower volumes at the newly commissioned Surya copper plant, but management expects resolution within 3 months by leveraging supply from an acquired plant.

    Management acknowledged

Q&A highlights

7 direct
Economics of Tata Steel BRPL project and free cash flow generation Direct
This is a business which is already in place. So for generating this kind of free cash flow, the amount of sustaining capex is not much. So that's why the free cash flows are high because this is a take-or-pay contract that we have with Tata Steel as a captive consumer.

Clarifies the nature of the BRPL project as a low-capex, high free cash flow, take-or-pay contract with Tata Steel, indicating stable earnings.

Asked by Amit Dixit

Incremental capex for Congo copper operations and risk mitigation Direct
Based on our current evaluation, including the initial working capital and the mine development, which will be treating these plants, it would require near about $200 million to $260 million... But that risk is mitigated by the fact that we are partnering with the U.S. and U.S. has a strategic and critical minerals deal, which was signed in 2025.

Provides specific capex figures for the Congo project completion and highlights the strategic partnership with the U.S. as a key de-risking factor for operations in a challenging geography.

Asked by Amit Dixit

Thriveni's revenue and margin expansion, especially iron ore vs. coal Direct
In iron ore, we are starting 2 new mining leases. And for the other mining leases where we are already doing, we have got the environmental clearances enhancement. And due to that, the iron ore production is going to be higher as compared to the earlier year. And in respect of coal, as we stated, Indonesian operations, we are slightly slowing down due to lower margins.

Explains the drivers behind Thriveni's strong performance, emphasizing iron ore expansion due to new leases and environmental clearances, while indicating a strategic slowdown in lower-margin Indonesian coal operations.

Asked by Vikas Singh

Sequential decline in pellet realization despite sharp iron ore increase Partial
As volumes have gone up in pellet, we have had to search new markets, and that is why the pellet realizations are a little lower because the newer markets are at a distance. Some tenders were there earlier, which we have not been able to re-establish again. And we've been doing a little bit more export.

Addresses a specific financial anomaly, attributing the lower pellet realization to market expansion efforts and increased exports, which might involve higher logistics costs or different pricing structures.

Asked by Vikas Singh

Impact of BHQ beneficiation on overall blended EBITDA per ton for iron ore Direct
We think it's on a higher scale because BHQ beneficiated ore will be 66%, 67%. The cost upside is around INR200, INR300... The upside on the selling price or on the usage level, even if we do it internally, will be at INR700, INR800. So we think that the EBITDA will go up once the BHQ is commissioned.

Provides a clear financial outlook on the BHQ project, indicating that despite higher mining costs, the superior quality and realization of beneficiated ore will lead to an overall increase in EBITDA per ton.

Asked by Vikas Singh

Consolidated capex guidance for FY27 and FY28, and debt reduction plans for Thriveni Direct
Next year, our plan is around between INR10,000 crores to INR11,000 crores... And next year, it should be INR12,500 crores plus... Thriveni debt, yes, we are looking at. We have plans of reducing RPS as it was just paid around INR700-odd crores in this month of April for the RPS.

Gives a comprehensive overview of the company's significant capex plans for the next two fiscal years, including various projects, and details specific debt reduction actions for Thriveni.

Asked by Jashandeep Singh

Impact of new government regulation on iron ore grade below 45% on royalty and off-take Direct
So the royalty is paid on material going out of the mine and the lower grade of less than 45 or less than 35 would be going out of the mine and paying a royalty at the rate of 50% or 75%, respectively. So that would reduce our BHQ output cost to the BHQ plant. So it helps us in terms of reduction of cost.

Explains how new regulations regarding lower-grade iron ore will actually benefit the company by reducing BHQ output costs due to lower royalty rates, improving cost efficiency.

Asked by Jashandeep Singh

Debt acquired with CHEMAF acquisition and its consolidation Direct
The total debt which is there on the books of Chemaf is around USD800 million. Large creditors, mostly we have negotiated. And effectively, once we pay out those creditors, this debt will be reduced by 475 million... So although we own 49%, but because we are having the operational control on the ground... it gets consolidated into our books.

Clarifies the significant reduction in CHEMAF's acquired debt through negotiation and explains why the 49% stake results in consolidation due to operational control, providing transparency on the financial impact.

Asked by Siddharth Gadekar

3 min read 7 chapters

Detailed narrative

Exceptional Financial Performance and Margin Expansion

Lloyds Metals reported an outstanding Q4 FY26, with standalone total income soaring 310% YoY to INR4,977 crores, contributing to a full-year FY26 income of INR13,838 crores, up 104% YoY. Standalone PAT for the full year reached INR3,194 crores, a 120% YoY increase, while consolidated PAT stood at INR3,829 crores. The company maintained a robust EBITDA margin of 33.73% in Q4, expanding 1000 bps YoY, and achieved a full-year standalone EBITDA margin of 33.77%, an improvement of 418 bps YoY, demonstrating structural cost efficiencies and a higher value-added product mix.

Record Operational Volumes and Capacity Ramp-up

The company achieved significant volume growth, with iron ore production for FY26 reaching 21.96 million tons, a 120% YoY increase, and sales volume at 16.18 million tons. The newly commissioned pellet plant demonstrated exceptional execution, achieving 100% capacity utilization within just four months and producing 3.03 million tons for FY26. DRI sales volume for FY26 grew 56% YoY to 480,000 tons. The monthly iron ore run rate in April 2026 already stands at approximately 2 million tons, indicating strong momentum for FY27.

Strategic Projects and Infrastructure Development

Lloyds Metals has invested INR13,500 crores in capex over the last four years, with INR8,100 crores in FY26 alone, focusing on future growth. Key projects include two pellet plants with a combined capacity of 8 million tons per annum, an 85-kilometer slurry pipeline already delivering cost savings, and a 1.2 million tonne wire rod steel plant in Chandrapur, which is well underway for commissioning in the last quarter of FY27. The BHQ beneficiation project is progressing towards first phase readiness by December 2027, targeting 30 million tons input and 12 million tons output.

Expansion into Copper and Critical Minerals

The company has strategically expanded into the critical copper sector, defining a pathway to increase its Surya copper plant capacity to 30,000 tons per annum. Furthermore, Lloyds Metals acquired a 49% stake in CHEMAF Group, a significant copper-cobalt platform in the Katanga belt, aiming for a combined 100,000 tons of copper production from CHEMAF and Surya over the next 3-5 years. The Surya plant, commissioned in March 2026, is expected to produce 9,000-10,000 tons of copper in FY26, with initial sulfuric acid supply issues expected to be resolved within three months.

Thriveni's Robust Performance and Operational Excellence

Thriveni delivered a transformational FY26, reporting total income of INR7,997 crores and an EBITDA of INR1,990 crores, achieving a 25% EBITDA margin. The environmental capacity at Surjagarh mines has been significantly increased from 10 million tons to 55 million tons per annum. Thriveni's Odisha operations are projected to increase volumes by 39% YoY to 34-35 million tons in FY27, driven by new mining leases and enhanced environmental clearances, while lower-margin Indonesian coal operations are being scaled down.

Capital Allocation Strategy and Debt Management

The company's standalone net debt stood at a manageable INR3,901 crores as of March 31, 2026, supported by strong EBITDA generation. Future capex plans include INR10,000-11,000 crores for FY27 and INR12,500 crores for FY28, to be funded through a mix of internal accruals and debt, targeting a net debt to EBITDA ratio of 1-1.5x. The acquired debt of CHEMAF, initially $800 million, was significantly reduced by $475 million through negotiations, with the remaining $330 million being non-recourse to Lloyds Metals.

Cost Optimization and Value-Added Product Focus

Lloyds Metals is committed to cost optimization, projecting annual cost savings exceeding INR2,000 crores by March 2028, primarily driven by maturing logistics and sustainability initiatives. The slurry pipeline is expected to reduce iron ore logistic costs by over INR500 per ton. The strategic shift towards value-added products is evident, with their contribution to FY26 standalone revenues rising to 32% (from 20% in FY25) and to EBIT contribution increasing to 30% (from 11% in FY25), indicating a focus on higher-margin offerings.

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