Lloyds Metals and Energy shines on potential gains from acquisition, capex

livemint.com:

Subscribe to enjoy similar stories. Lloyds Metals & Energy Ltd’s shares have gained about 14% so far in 2025 in the backdrop of its quarterly update and announcement of employee stock options (Esops) for its 6,000 workers. For the December quarter (Q3FY25), the company’s iron ore production is up 8% year-on-year, higher than the 3.5% growth clocked in half-year ended September (H1FY25).

Volume growth, along with the price increase of ₹800-900 per tonne taken during the quarter, should boost profitability. The issuance of Esops, worth over ₹1,400 crore at the current market price, carries significance given the disruption faced by the iron ore miner until some years ago due to its presence in the Maoist-affected region of Gadchiroli in Maharashtra. In December, Lloyds announced the acquisition of mining development operations (MDO) of Thriveni Earthmovers.

A J.M. Financial Institutional Securities report estimates Thriveni’s MDO business could have an Ebitda potential of about ₹2,000 crore a year. The acquisition should also help Lloyds in faster ramp up of its mining capacity to 25 million tonnes per annum (mtpa) from current 10 mtpa.

The company has sought regulatory approval for this and expects to get it by February. Lloyds has increased its iron ore production by 3.6 times during FY22-24, which has helped its profitability. Ebitda growth stood at 37% in H1FY25.

Also, the company is working on reducing its cost of operations, improving realization and forward integration. This strategy includes construction of a beneficiation and pelletisation plant, to be completed in phases starting March. The management has indicated that this would generate a premium of $40-50 per tonne ( ₹3,400-4,300) against an additional