LLOYDSMENSENovember 13, 2025

Lloyds Metals And Energy Limited

6,749words
145turns
13analyst exchanges
4executives
Management on call
Rajesh Gupta
MANAGING DIRECTOR – LLOYDS METALS AND ENERGY LIMITED
Riyaz Shaikh
CHIEF FINANCIAL OFFICER – LLOYDS METALS AND ENERGY LIMITED
S.K. Naredi
DIRECTOR FINANCE – THRIVENI EARTHMOVERS AND INFRA PRIVATE LIMITED
Siddharth Gadekar
EQUIRUS SECURITIES PRIVATE LIMITED
Key numbers — 40 extracted
4 million
point on how to operate and scale. The pellet plant has been ramped up, the first pellet plan of 4 million tons, which began commercial production just at the end of Q1. And in the fourth month of full op
100%
ion just at the end of Q1. And in the fourth month of full operation. In October, we have crossed 100% of capacity with a production of 350,000 tons, a little bit more than that. The pellet plant --
1.2 million
ed approach. Pellet plant number two is already in advanced stages, 1.2 million tons of wire rod plant. The groundwork is progressing extremely systematically. The BHQ beneficia
35%
re the accounts have been consolidated. The EC of our clients in iron ore products has gone up by 35% to 40%. NTPC mines, the EC has gone up by around 20%. Surjagarh mine is also gearing up for full
40%
accounts have been consolidated. The EC of our clients in iron ore products has gone up by 35% to 40%. NTPC mines, the EC has gone up by around 20%. Surjagarh mine is also gearing up for full capacit
20%
clients in iron ore products has gone up by 35% to 40%. NTPC mines, the EC has gone up by around 20%. Surjagarh mine is also gearing up for full capacity from 10 to 26 million tons. Operational an
26 million
the EC has gone up by around 20%. Surjagarh mine is also gearing up for full capacity from 10 to 26 million tons. Operational and capex gearing up is done for these plants. Given our large-scale mining f
rs,
ns the same, plan meticulously, execute swiftly, execute efficiently and build for the next 30 years, not for the 3 quarters. I want to appreciate all our teams at the mines, pellet plants, logistics
INR25,754 million
ted its highest ever quarter at half year revenue. Our total income for quarter 2 FY '26 stood at INR25,754 million, up 75% year-on-year, driven by higher iron-ore dispatches, the commencement of pellet sales an
75%
uarter at half year revenue. Our total income for quarter 2 FY '26 stood at INR25,754 million, up 75% year-on-year, driven by higher iron-ore dispatches, the commencement of pellet sales and improved
INR49,838 million
ales and improved logistics through the slurry pipeline. For H1 FY '26, total income came in at INR49,838 million, higher by 28% year-on-year. EBITDA for the quarter was INR8,693 million, up 95% year-on-year wit
28%
through the slurry pipeline. For H1 FY '26, total income came in at INR49,838 million, higher by 28% year-on-year. EBITDA for the quarter was INR8,693 million, up 95% year-on-year with margins at 33
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Guidance — 20 items
Rajesh Gupta
opening
“The value-added products have further strengthened their profile, and our project pipeline has moved forward as predicted with the planning.”
Rajesh Gupta
opening
“The next project that we have just commissioned is one of the DRI, which has expanded our DRI operations this quarter, just towards the end of this quarter.”
Rajesh Gupta
opening
“Our overall capex plan remains well-structured and each project is aligned to long-term value creation, not short-term capacity addition.”
Rajesh Gupta
opening
“However, I want to highlight that lost revenue will be made up in the coming months, and mining operations are now normalized post monsoon.”
Vikash Singh
qa
“Sir, just wanted to understand our iron ore selling strategy going forward, given that the iron ore prices in the domestic market are slightly under pressure.”
Vikash Singh
qa
“And sir, regarding Thriveni, if I remember when we were doing the merger, our guidance for FY '26 was somewhere around INR8,000 crores with almost INR2,800 crores of EBITDA, first half seems to be on lopsided.”
Vikash Singh
qa
“So, do we want to change the guidance on Thriveni?”
Rajesh Gupta
qa
“The guidance at the time of this merger, when we had bought in this guidance numbers, this was based on 26 million tons of EC of Lloyds metals itself, which we were expecting it to have getting it in the last quarter of the previous year.”
Rajesh Gupta
qa
“So accordingly, we have already changed this guidance.”
Vikash Singh
qa
“So sir, since you are talking about starting the project as soon as first quarter '27, could you give us the product mix which we are thinking of producing there?”
Risks & concerns — 6 flagged
Seamless and reliable evacuation, and we've already seen the advantages in this monsoon, structural cost reduction, lower carbon footprint and most importantly, efficient movement that safeguards our margins even in volatile pricing environment.
— Rajesh Gupta
Sir, just wanted to understand our iron ore selling strategy going forward, given that the iron ore prices in the domestic market are slightly under pressure.
— Vikash Singh
The pellet prices has come up and come down more because of the steel market, steel cycle being a little weak.
— Riyaz Shaikh
So you don't foresee much of the risk going ahead?
— Vikash Singh
For the risk-reward standpoint, the opportunity was compelling.
— Riyaz Shaikh
Talking of first time industry in the country in one of the very difficult terrains.
— Rajesh Gupta
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Q&A — 13 exchanges
Q
Congratulations on good set of numbers. Sir, just wanted to understand our iron ore selling strategy going forward, given that the iron ore prices in the domestic market are slightly under pressure. So we are going to have almost 14 million, 15 million tons extra volume. So would we push more volumes or the pricing is something which we keep in mind because that extra volume would further degrade our pricing scenario. So I just wanted to understand overall scenario, how do you see this and the balancing between volumes and realization?
Riyaz Shaikh
So iron ore strategy, we would like to fill our full EC capacity, which this year stands to around 22 million tons. Given the last few months of extra rain, we may have -- we reach between 20 million, 22 million tons. In terms of pricing, pricing is a little down this last 2 months. But prior to that, it has been a little better than the previous quarter year-on-year. So it is not that it is entirely down. It is softer in a softer regime. And that is the cyclicality of the business, which we are addressing. But we have well executed marketing strategy, including pelletization, including -- usi
Q
A couple of questions from my side, sir. Sir, firstly, on the gross margin front, so the gross margin has reduced around 79% in the current quarter versus an average of around 87%, 88% historically. So I just wanted to know what led to this deduction? And will it continue in the coming quarters?
Riyaz Shaikh
No, there is no such deduction in the gross margin in this quarter. You're talking of the consol numbers or the... Stand-alone basis, sir. Which is all improved and... It should improve further in the next quarter. Sure, sir. And secondly, sir, on the Thriveni part. So in the last quarter, it was mentioned that the EBITDA margin should be around 33%, while the numbers reported were around 16%. So just wanted to know what are the -- what is because of this divergence? I'll request Mr. Naredi to address this question. Yes. Normally, our standard EBITDA margin in our business is around in between
Q
Congratulations on a great set of numbers. Could you share the EBITDA per ton number for DRI in this quarter?
Riyaz Shaikh
The EBITDA per ton for DRI in this quarter has been -- H1 has been INR3,879. Okay. And what is the number for Q2? INR3,150. Got it. Got it. And what was the IPS benefit in Q2 FY '26? IPS we got around INR94 crores as a benefit in Q2. All right. All right, sir. And lastly, sir, if you could share the realized slurry benefit in this quarter? Slurry per ton? Yes, slurry benefit per ton basis. See, as we've been stating, we saved around INR600 per ton on the slurry pipeline. Around INR600 has been the saving due to the slurry pipeline.
Q
My question pertains to our debt situation. So from a stand-alone to consol, I see, we have increased to roughly around INR8,000 crores, that's like an addition of INR6,000 crores. So is it like a project related mostly or it's primarily coming from Thriveni's consolidation? That's my first question.
Riyaz Shaikh
Yes, it's actually coming from Thriveni's consolidation. So INR6,000 crores -- including the RPS, the redeemable preference shares issued to the promoters for taking over of those accounts. Okay. And also, if you could share any comments on our negative cash conversion that we see on a consol basis? Could you repeat that question? If it's possible, can you share any comments on our negative cash conversion, CFO on our consol basis versus the stand-alone? Versus the standalone. Part of it is because of the debt I mentioned. Working capital might be a reason for that. I think we'll get back to y
Q
I just wanted to know what is your estimated iron ore supply shortfall that you expect in current year 2026? And what would be your time line for the third pellet plant?
Rajesh Gupta
The maximum that we can do in iron ore this year is around 22 million tons. We would do a minimum of 20 million, 21 million tons of dispatches from the mine. Part of that will be used internally for the pellet and the DRI, the balance will be sold. We will not be having any stock to a large extent. What was the second part of your question? Third pellet... What would be your timing for the third pellet plant? Third pellet plant will be '28, '29 around the time that the third phase of the beneficiation plant is commissioned. Okay, sir. Noted. And has the IPS benefit been recognized? And what is
Q
My question is related to the debt. So, at the time of Thriveni acquisition, we were told the enterprise value was around INR5,000 crores, so around INR4,950 crores of debt. But now when we see the September balance sheet, a gross debt stands at around INR8,000 crores -- INR7,980 crores versus INR756 crores in March. So, there is an addition of almost, say, INR7,000-odd crores. So, is this like you have extra debt from Thriveni?
Riyaz Shaikh
It's a console number, that INR7,900 crores is a consol number with Lloyds metals also in it. So as in Lloyds -- as in for Thriveni, the number was around INR5,000 crores. I don't -- when we had INR5,600 crores, which is now around INR6,000 crores, which is on account of the scaling up of the operations. So that's a continuous business. We have to go on for the equipment and - - plus we also have a cash balance of INR400 crores. So the net cash would be always INR5,600 crores. Okay. So, we have taken around INR6,000 crores from Thriveni as debt, right? Yes, including BRPL. Understood, sir. Und
Q
Sir, my first question is on the Bharat Wire Ropes acquisition where we have acquired some CCPS. Can you just share the rationale behind that? And how do we see that conversion happening over the next 2, 3 years?
Riyaz Shaikh
See it was purely a financial investment. There is no strategic direction attached to this transaction. It is -- this company's position as an industry with a long-term potential. For the risk-reward standpoint, the opportunity was compelling. We are looking at around something around 18% to 20%. And within 18 months is what's supposed to be converted. So that is what we are looking at. Okay. Sir, second question is on the Thriveni operations. When we had done the acquisition we had given a road map where our mining expansion would go up to almost 123 million, 124 million tons once LMEL also r
Q
My first question is on the -- can you just give me the ballpark number for the captive consumption like for the entire FY '26, like 22 million tons are targeting, how much goal for the...
Rajesh Gupta
Can you repeat the question, be a bit louder? Am I audible right now? Yes, now it's better. Yes. I'm asking like can you give me the ballpark number for the captive consumption over the open market side for the pellet and DRI side for the full year? For the next year, the total market -- the self consumption would be around 8 million tons for the pellet plant give or take 0.5 million tons and around -- out of that 8 million ton, 1 million ton or 800,000 tons will be used internally and around 200,000 tons for the DRI, so around 1 point -- 1 million ton, 1.2 million tons will be used for DRI an
Q
Yesterday, we get an update regarding the purchase of 290 acres of land from Bilt Graphic Paper Product Limited. The queries will -- what will be this land be used for? Is it for a wire rod mill or something else? And another query is regarding any update on coal mining block at Madhya Pradesh?
Rajesh Gupta
On the land, the land will be used, it's around 10 kilometer from our Konsari factory. It will be used for 2, 3 purposes, including partly housing, which already exist on the land. We'll also be using it as a switchyard station for the MSEDCL support system. Regarding Madhya Pradesh mining, there is no update at the moment. It is still under study and things like that.
Q
Sir, just a couple of more questions. So first, on the 1.2 million ton BHQ that you have mined, have you already booked these costs in the quarter? And going ahead, will we see some more BHQ mining done before the BHQ plant comes online?
Rajesh Gupta
The costs have been booked and --- lying-in stock. And over the next 12, 15 months before the BHQ plant comes online, will we see more production on the BHQ side also? Yes. Yes, the mining plan indicates that. The exact figures, we would know as the mining progresses. So this would be over and above the 22 million ton guidance that we are talking about, right? This is over and above the 22 million tons. Okay. Sir, secondly, on the BHQ plant, when do we expect the first plant to get commissioned and about the ramp-up also how should we think about that? Next year, last quarter should be the fir
Q
So just want to touch up on the debt numbers. So considering the capex of INR6,000 crores, how should we see the debt numbers going forward...
Riyaz Shaikh
INR9,500 crores of an NCD issue. That is what we have planned. So going forward, that is something what we are planning to raise that debt over the next 6 months from now. And working capital is something that we have now -- we've got sanctioned of around INR800 crores of working capital. So for FY '27, debt number should be around INR9,000 crores, like INR7,500 crores plus... It will be also repaying because the Thriveni loans are getting repaid also every quarter. And even we start repaying from this month as the loans, what we have taken on a short-term basis will all start being repaid. So
Q
Sir, my first question is on the pellet. So our margins at around INR5,000-odd per ton is much higher than the industry standard. So if you can explain what are the economics here? And assuming today's price, do we expect similar margins to continue on expanded volumes also in coming years?
Rajesh Gupta
So the level of margin is, like I mentioned earlier, amongst the highest in the country, 3, 4 reasons. Number one is captive mine. Number two, captive transfer by the slurry pipeline, saving of INR600 for us and INR1,000 for many other players. Number 3 is an operating cost, which is around INR300 to INR400 lesser. And number four, destination to destination our selling price is around INR200, INR300 higher than anybody else. So given the factor of all of this, like I have kept saying that our company, we are building a cyclical group industry. So the pellet industry, which is not having a ver
Q
Thank you, everybody. Thank you for all the support, and we hope to perform well with your blessing and the blessing of the market. The steel industry is going through a tough cycle at the moment, and we hope to cross this by the time our steel plant starts so that when we are on the other side of a steel cycle, we are in full swing on the steel schedule as well. Thank you again.
Management
Speaking time
Rajesh Gupta
36
Riyaz Shaikh
30
Moderator
15
Siddharth Gadekar
13
Vikash Singh
9
Tanmay Choudhary
6
Vignesh SBK
6
Divy Agarwal
5
Hardik Gori
5
Sumangal Nevatia
5
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Opening remarks
Siddharth Gadekar
Good evening, everyone, and thank you for joining us today. We at Equirus are pleased to host Lloyds Metals and Energy's Q2 FY '26 Earnings Call. We have with us today Mr. Rajesh Gupta, Managing Director; Mr. Riyaz Shaikh, CFO; and S.K. Naredi, Director Finance of Thriveni. Now I would like to invite Mr. Rajesh Gupta to initiate the proceedings for the results call.
Rajesh Gupta
Good afternoon, everyone. A warm welcome to all of you, and I sincerely thank Siddharth ji and the Equirus team for hosting this call and for their continued support. Let me begin with the big picture headline before we go deeper. This has been a half year where operational commissioning of the pellet plant has taken center stage. DRI plant has started. The value-added products have further strengthened their profile, and our project pipeline has moved forward as predicted with the planning. Across the board, the business continues to demonstrate resilience and direction. Let's begin with the projects. The slurry pipeline of 85 kilometers has been one of our biggest enablers this year. And I want to emphasize what the slurry pipeline means. Seamless and reliable evacuation, and we've already seen the advantages in this monsoon, structural cost reduction, lower carbon footprint and most importantly, efficient movement that safeguards our margins even in volatile pricing environment. Thi
Riyaz Shaikh
Thank you, Rajeshji, for the strategic overview. Good evening, everyone. Let me take you through our consolidated financial and operational performance for the second quarter and first half of FY '26, followed by updates on key projects and strategic developments. This quarter has been another strong step forward for Lloyds Metals. We continue to build momentum across all business, translating operational execution into record financial performance. Starting with the stand-alone numbers. To reiterate, the company has reported its highest ever quarter at half year revenue. Our total income for quarter 2 FY '26 stood at INR25,754 million, up 75% year-on-year, driven by higher iron-ore dispatches, the commencement of pellet sales and improved logistics through the slurry pipeline. For H1 FY '26, total income came in at INR49,838 million, higher by 28% year-on-year. EBITDA for the quarter was INR8,693 million, up 95% year-on-year with margins at 33.75% expanding by 348 basis points. For th
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