Lloyds Metals and Energy Ltd

Financial Performance

• Q1 FY27 stand-alone revenue: INR 5,413 crores; up 127% YoY, 10% QoQ
• EBITDA: INR 2,120 crores; up 172% YoY, 31% QoQ
• PAT: INR 1,527 crores; up 141% YoY, 43% QoQ
• EBITDA margin: 39.2%; YoY +639 bps, QoQ +631 bps
• Margin drivers: slurry pipeline, lower logistics, better mix, higher value-added share
• Value-added products: 41% of stand-alone revenue, 40% of EBIT
• Iron ore: production 6.05 mt; sales 5.46 mt; realization INR 6,068/ton; EBITDA 2,230/ton
• DRI: sales 183,920 tons; realization INR 27,376/ton; EBITDA 6,273/ton
• Pellets: production 1.69 mt; 100% capacity utilization in 4 months; realization INR 11,783/ton; EBITDA 5,803/ton
• Pellets mix: domestic 75.3%, export 24.7%
• Standalone net debt (30 Jun): INR 5,616 crores
• Consolidated net debt: ~INR 19,000 crores; Chemaf debt renegotiation underway
• Comment: record revenue, record EBITDA, record PAT; best ever margin

Operating Update

• Second pellet plant commissioned May 2026; pellet capacity utilization reached 100% within 4 months
• Pellet sales mix: 75.3% domestic, 24.7% export
• Value-added product mix rising; impact on margins and broader product mix

Capex and Balance Sheet

• Capex: INR 13,513 crores in FY24–FY26; INR 3,005 crores in Q1 FY27
• Standalone net debt: INR 5,616 crores as of 30 June
• Consolidated debt (net): around INR 19,000 crores; Chemaf debt renegotiation ongoing

Projects and Outlook

• 2 million ton long-product steel plant to be commissioned shortly
• BHQ beneficiation, third pellet plant, slurry and iron-ore handling lines progressing
• Copper (Chemaf) JV: two assets; total capex ~$300m to completion; ~$130m already invested
• JV asset book size ~$800m; 9 months to financial closure; mix of equity and debt
• MDO with Tata Steel: ramp-up plans; slurry pipeline BOT project being explored
• PNG ABG project: under study; no capex figures yet
• Thriveni pipeline and Odisha/Gadchiroli/c operations: scalable with 2 new mines and green fleet

Guidance and Outlook

• Capex guidance: ~INR 11,000 crores for the next 2 years; INR 15,000–20,000 crores in the following year
• Full-year EBITDA margin guidance for Thriveni: 28%–30% remains intact

Q&A Highlights

• Copper expansion roadmap: target ~100,000 tons; capex ~$300m; 50% India contribution; financial closure in 3–4 months
• Chemaf debt restructuring: to be completed next quarter; ~40%–50% debt reduction post-closure
• BHQ plant: commissioning by March 2028; recovery ~38% (vs 35%); finished product 66–67% Fe; gangue <3%
• NTPC wage receivable: no provision; negotiations ongoing; expected resolution in 2–3 months
• Maharashtra steel plant: first plant under execution; target March 2027; Konsari expansion being studied
• Odisha volumes: Laserda-Pacheri 1.5 mtpa; Dalpahar 3 mt; FY27 Odisha volumes 34–35 mt

Meeting Details

• Date and time: 11 August 2026 at 3:30 PM.
• Type and mode: group conference call; virtual.
• Event: earnings conference call for Q1FY27; organiser: Lloyds Metals and Energy Ltd.
• Purpose and availability: earnings discussion for Q1FY27; recording available on website.
• Key participants include a Company Secretary.

Business Overview

• LMEL is a mining-to-metals group with Iron Ore, Pellets, DRI, Power, and MDO ventures.
• Key growth drivers include Thriveni MDO, slurry pipelines, and captive power.
• Strategic expansion into copper and cobalt via DRC projects Chemaf and Surya Mines.

Operational Highlights

• Standalone Q1 FY27: revenue ₹54.13bn; EBITDA ₹21.20bn; PAT ₹15.27bn; EBITDA margin 39.17%.
• Second pellet plant commissioned May-2026; pellets production 1.69 MnT; 100% capacity utilization.
• Iron Ore Q1 FY27: production 6.05 MnT, sales 5.46 MnT; realisation ₹6,068/tonne.
• DRI volumes 183.92 kt; EBITDA/tonne ₹6,273.
• Pellets Q1 FY27 production 1.69 MnT; mix 75.3% domestic, 24.7% exports.
• Capex: ₹135.13bn in FY24-26; ₹30.05bn in Q1 FY27.
• Exports expanded to Kenya, South Korea, Indonesia and China.
• Net debt as on 30 Jun 2026: ₹56.16bn.

Financial Performance

• Consolidated Q1 FY27 revenue ₹73.54bn; EBITDA ₹27.82bn; PAT ₹17.34bn; margin 37.82%.
• FY26 EBITDA ₹61.40bn; PAT ₹38.29bn; EBITDA margin 35.88%.
• FY26 includes one-time loss on fair value of CCPS ₹643mn.
• TEIPL Q1 FY27 revenue ₹26.72bn; EBITDA ₹6.58bn; margin 24.63%.
• Net debt TEIPL ₹58.21bn as of 30.06.2026.
• Consolidated FY26 borrowings: current ₹65.31bn; non-current ₹138.49bn.
• FY26 consolidated revenue ₹171.13bn; EBITDA ₹61.40bn; PAT ₹38.29bn; PAT margin 22.37%.

Capital Structure & Liquidity

• Standalone net debt as of 30 Jun 2026: ₹56.16bn.
• TEIPL net debt (incl. RPS) as of 30 Jun 2026: ₹58.21bn.
• Consolidated borrowings (FY26): current ₹65.31bn; non-current ₹138.49bn.

Strategic Priorities & Outlook

• Three SPVs for 66 MW wind and solar; captive power to secure energy.
• Greening with 100–120 MW renewables; cost savings via captive energy.
• MDO expansion: Tata Steel Joda West operations commenced June 2026; feasibility for volume expansion.
• Slurry pipeline FEASIBILITY linking Odisha mines to steel plants under BOT.
• Copper and cobalt expansion: Chemaf 70,000 TPA Cu and 20,000 TPA Co; 49% stake.
• Surya Mines ramp to 800–1,000 TPM by FY27 end.
• Panguna development: community, hospital, education; 54+ mining concessions.

Risks & Mitigation

• Q1 FY27 loss due to EP-1 shutdown amid upgrades; higher sulfuric acid and diesel costs.
• Mitigation: EP-2 upgrade; ramp-up; new mine operations.
• Longer-term exposure to input costs, FX, and regulatory changes mitigated by captive energy and diversified assets.

Governance & Leadership

• Tata Steel MoU to explore collaboration across growth areas.
• Thriveni MDO acquisition; Joda West MDO operations commenced 1 Jun 2026.
• Captive logistics and governance improvements via strategic partnerships.

Meeting Details

• 14 August 2026, Mumbai: Equirus Annual India Conference 2026; Physical; One-on-one and group meeting.
• 18 August 2026, Mumbai: Motilal Oswal 22nd Annual Global Investor Conference 2026; Physical; One-on-one and group meeting.

Participants

• Company Secretary

Purpose

• Purpose: investor and analyst meet/events.

Additional Notes

• Meeting details will be available on the company's website.

Issue Overview

• Type of issue: QIP of equity shares and preferential issue of convertible warrants.
• Total issue size undersubscribed, causing proportional allocation reductions.
• Main objectives: fund pellet plant project, general corporate purposes, and issue-related expenses.

Utilisation of Proceeds

• Utilisation largely aligned with disclosures; some related-party payments noted.
• Major deviations: payments to related parties from QIP proceeds; promoter infusion via preferential issue.
• Object 1 Pellet plant completed; Object 2 expansion ongoing; GCP utilisation largely complete.
• Unutilised proceeds held in fixed deposits and monitoring account.
• Cost overrun for Konsari project; ICE certificate validates revised cost.
• Interim ICD investments and related-party transactions flagged for governance concerns.
• GCP funds used under management undertakings; minor tax payment disclosed.

Governance and Compliance

• All statutory approvals for the objects obtained.
• Material events: cost overrun and related-party payments raise investor risk.
• Unclear disclosures on unutilised proceeds in annual reports; governance implications.
• ICD investments and related-party transactions require ongoing monitoring.

General Corporate Purpose (GCP)

• GCP funds utilized substantially; cumulative GCP usage documented.
• Funding approvals evidenced by management undertakings and notices to shareholders.
• Tax payments recorded under GCP; details in supporting documents.
• Board approval specifics for GCP allocation not clearly stated.

Financial results

• Unaudited Standalone and Consolidated results for quarter ended 30 June 2026 approved; limited review.
• Results cover Q1 FY2026-27; Audit Committee reviewed prior to board approval.

Board appointment

• Appointed Avijit Ghosh as Independent Additional Director for five years from 10 Aug 2026 (subject to member approval).

Renewables group captive investments

• Approved 26% stakes in Amplus Green One, Amplus Energy One, and Amplus Ceres Solar.
• Total consideration: Rs 29.66 cr (Green One), Rs 9.89 cr (Energy One), Rs 8.47 cr (Ceres).

LGRF loan conversion and investment

• Converted USD 200 million loan to equity in LGRF; LGRF remains wholly owned.
• Enable investment in LGRF via CCPS/OCPS/RPS; may be in one or more tranches.

Thriveni TEIL investment

• Approved investment in TEIL up to INR 625 crores via rights/further issue.

Amalgamation TPPL-BRPL

• Scheme of Amalgamation between TPPL and BRPL approved; effective May 21, 2026; Lloyds' stake unchanged.

Debt and security and proceeds utilisation

• Security Cover Certificate for NCDs as on 30 June 2026 confirms 100% asset cover.
• Jan 30, 2026: 60,000 NCDs; base Rs 300 cr plus green shoe Rs 300 cr.
• May 8, 2026: 75,000 NCDs; total Rs 750 cr.
• Utilisation of issue proceeds: Rs 1,218 cr utilised; Nil deviation.

Audit and compliance

• Independent reviews on standalone and consolidated results; unmodified opinions.
• Auditor's Emphasis: NTPC HPC wages receivable; ongoing conciliation; management expects favorable outcome.

ESOP updates

• ESOPs: cumulative 3,36,95,000 shares issued; options outstanding 67,66,112; exercisable 2,73,323.

Customs penalty and financial impact

• Order from Nagpur Customs demanding differential duty and penalties dated 21 July 2026.
• Total demand: differential duty Rs 7,74,60,071; interest Rs 54,74,037; penalty Rs 1,16,19,020.
• Company paid the differential duty, interest, and penalty before issuance of the order.
• Date of receipt of order: 27 July 2026.
• Impact: penalty has no material impact on financials or operations.

Encumbrance release details

• Pledgor: Crosslink Food and Farms Private Limited.
• Target: Lloyds Metals and Energy Limited.
• Event: Release of pledge over 6,00,000 equity shares.
• Lender: Jio Credit Limited.
• Date: 3 July 2026.
• Pre-release encumbered: 65,558,548 shares (11.65%).
• Post-release encumbered: 6,765,409 shares (10.32%).
• Shares released: 600,000 (0.92%) of total share capital.
• Reason: prudent financial management; lender's interests protected.