Lloyds Metals and Energy delivered exceptional financial performance in Q1 FY27, with net profit surging nearly three-fold to ₹1,726 crore compared to ₹651 crore in the corresponding quarter of the previous year. The company achieved remarkable revenue growth with total income rising to ₹7,354.3 crore from ₹2,383.5 crore year-on-year, representing a tripling of revenue from the same period last year. EBITDA increased significantly to ₹2,781.4 crore from ₹805.7 crore, while EBITDA margin expanded to 37.82% from 33.80%, demonstrating improved operational efficiency and profitability across all business segments. The company's operating profit more than tripled during the quarter, with operating profit margin (OPM) showing significant improvement from the previous year, contributing to the strong overall performance.
The board approved several strategic initiatives during the quarter, including investment of up to ₹625 crore in Thriveni Earthmovers and Infra Private Ltd. through subscription to rights issue or further issue of capital. This investment can be made in one or more tranches, providing flexibility for the company's expansion plans. Additionally, the board approved investments in renewable energy projects for captive consumption under the Group Captive Scheme, including acquisition of a minimum 26% stake in both wind and solar power projects. The arrangements cover both wind and solar power through agreements with Amplus Energy Solutions Pte. Ltd., Amplus Green One Power Private Ltd., Amplus Energy, Amplus Energy One Private Ltd., Amplus Ceres Solar Private Ltd., and Amplus Ceres for wind and solar power respectively. The company will also execute Wind Power Purchase Agreements with Amplus Green One and Amplus Energy One, and Solar Power Purchase Agreements with Amplus Ceres.
The company announced the appointment of Avijit Ghosh as an additional director designated as non-executive independent director for a five-year term commencing August 10, 2026, and ending August 9, 2031. This appointment is subject to approval of the company's members. The board also approved conversion of existing loans extended by the company to its wholly owned subsidiary, Lloyds Global Resources FZCO, into equity shares of the subsidiary. Additionally, it approved an enabling investment in Lloyds Global Resources FZCO through subscription to compulsorably convertible preference shares, optionally convertible preference shares, redeemable preference shares and/or other permissible preference shares, hybrid securities or other securities, with the proposed investment subject to applicable laws, regulations, approvals and compliances.
The company's operating profit more than tripled during the quarter, with operating profit margin (OPM) showing significant improvement from the previous year. Total expenses fell substantially from ₹698.77 crore in Q4 FY26, contributing to the sequential profit recovery. Profit before tax increased to ₹112.59 crore from ₹88.17 crore sequentially, while the company reported no exceptional items during Q1 FY27, compared with a ₹3.49 crore exceptional loss in Q4 FY26. The strong operational performance reflects the company's focus on cost optimization and operational efficiency improvements across all business segments, with the EBITDA margin expansion to 37.82% from 33.80% demonstrating enhanced operational leverage. Iron ore volumes rose 58% year-on-year to 5.46 million tonnes, 6% above Nomura's estimates, while realisations stood at ₹6,068 per tonne, up ₹220 per tonne sequentially and 13% above the brokerage's estimate.
Nomura has downgraded Lloyds Metals and Energy to 'Neutral' from 'Buy', saying valuation has caught up with the company's growth story even as execution remains on track. The brokerage lowered its target price to ₹1,950 from ₹2,050, based on an EV/EBITDA multiple of 8.3x versus 8.4x earlier. The stock currently trades at 10.7x one-year-forward EV/EBITDA. Nomura trimmed its FY27F/FY28F/FY29F EBITDA estimates by around 2-3% to reflect revised commodity price assumptions, while the core business and MDO continue to perform strongly in line with expectations. However, operational challenges in the copper asset ramp-up and cost pressures amid the West Asia crisis prompted Nomura to cut its multiple for the non-ferrous business to 12x from 14x. With commercialisation of the copper mines underway and execution largely on track, Nomura believes 'most key catalysts are now reflected in the stock price'.
