LLOYDSME — earnings call

The transcript as filed. Every paragraph is addressable: its link names the page and the position it sits at in the call.

Prepared remarks

THRIVENI · MR. HEMANKUR UPADHYAYA – DEPUTY CHIEF

MR. HEMANKUR UPADHYAYA – DEPUTY CHIEF FINANCIAL OFFICER – LLOYDS METALS AND ENERGY LIMITED

Moderator · Conference Operator

MR. SHIVANSH SINGH – EQUIRUS SECURITIES

PRIVATE LIMITED · Management

Lloyds Metals and Energy Limited May 06, 2026

Moderator · Conference Operator

Ladies and gentlemen, good day, and welcome to the Lloyds Metals and Energy Limited Q4 FY

The next question is from the line of Vikas Singh from ICICI Securities.

Vikas Singh

Congratulations on very good set of numbers.

Sir, my first question pertains to Thriveni.

If I look at our iron ore ramp-up has been largely been done, while the coal has not been ramping up.

So are we going to expect volume growth in this segment?

Because if I remember correctly, a couple of quarters back, we have given a pretty good numbers in terms of revenue guidance on the Thriveni side.

And what has caused this margin expansion on the year-on-year basis from EBITDA margin of 16% to 26%?

Rajesh Gupta

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.

And Jharkhand operations, the contract volumes and all these things we are achieving.

So yes, we'll be increasing our revenues quantity in iron ore more as compared to coal.

And Surjagarh also, we have got a large expansion.

So there also, we are going to increase it.

So this is the reason that iron ore expansion will be much more as compared to coal.

Vikas Singh

Okay.

Sir, just a follow-up question on this.

In the remarks, somebody said that 37%, 39% higher iron ore production could be there.

Would our revenue follow the similar model or the rates are different and revenue growth would be lower than that?

Rajesh Gupta

No, no, revenue growth will be there, and we'll be getting the benefit of economies of scale.

So our revenues will be much, much better.

Vikas Singh

So would that go in tandem with the volume assuming the same kind of rates we are getting across the board or the intensity would be lower than the volume growth?

That's what I was asking effectively.

Rajesh Gupta

More or less, it will be the same.

Riyaz Shaikh

Top line would be more or less the same.

Bottom line will be faster because of economies of scale.

Vikas Singh

Noted, sir.

Sir, my second question pertains to our realization this quarter.

If I see iron ore and pellet, there was a deviation.

One has gone up on a sequential basis while the pellet realization Lloyds Metals and Energy Limited May 06, 2026 has gone down, which is a little bit surprising.

So could you explain what has happened there?

And what is the spot realization?

Have you also taken price hike today?

Rajesh Gupta

What has gone down?

Vikas Singh

Sir, pellet realization sequentially was down as per our own presentation, while the iron ore has been up sharply.

So just wanted to understand...

Rajesh Gupta

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.

On the pricing of iron ore, it's more or less driven by the market.

We are in line with the rest of the market and the steel market.

Vikas Singh

Noted, sir.

And sir, lastly, if you could give us some update on your BHQ project because next year, if I remember correctly, we wanted to do more of a low-grade beneficiation versus the high-grade sales.

Rajesh Gupta

So our -- in my opening remarks, I mentioned that by December 2027, BHQ first phase of 30 million tons input and around 12 million tons output would be commissioned.

And the land is with us.

The equipment has been mobilized -- the construction equipment has been mobilized.

The crushing of the material has started, and we'll be pushing the material on to the site and getting it evacuated from the site in this year.

And over the next 2 years, that material will be accumulated there.

And as far as the project itself is concerned, we are going ahead with -- the total engineering is more or less complete.

The main ordering of 85%, 90% has been ordered with 5-star parties.

The pellet plant has helped us a lot in establishing the final engineering, and that is the status.

Vikas Singh

Since we are beneficiating and the mining ratio to output is lower, do we expect that once the BHQ picks up our overall blended EBITDA per ton on the iron ore side at least would settle on a lower scale?

Rajesh Gupta

We think it's on a higher scale because BHQ beneficiated ore will be 66%, 67%.

The cost upside is around INR200, INR300, I think we explained in the last con-call and particularly with the revised notification of the government on reduced royalties.

So the upside on the cost will be 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.

Vikas Singh

Sir, wouldn't the mining cost per ton of the final material would be 3x higher, 2.5x higher, so that should get added in the cost, not only under beneficiation?

Rajesh Gupta

Much bigger scale volumes.

So we would have -- like I said, the total cost would be in that range that I just mentioned.

And the royalties are much less.

Vikas Singh

This is adjusted for the mining ratio you're talking about.

Lloyds Metals and Energy Limited May 06, 2026

Rajesh Gupta

Absolutely.

I'm talking about net visible ore.

Moderator · Conference Operator

The next question is from the line of Jashandeep Singh from Nomura.

Jashandeep Singh

Congratulations for a great set of results.

Sir, my first question is regarding capex.

You were highlighting how much capex will be required for the second copper stream that you have entered.

I just wanted to understand with that in mind, what will be our FY27, '28 capex guidance for consol Lloyds now?

And in line with that, with capex increasing, the earnings are also increasing significantly, but what will be sustainable net debt to EBITDA or leverage numbers for the company?

And is the company looking for any deleveraging in FY27-'28?

That will be my first question.

Riyaz Shaikh

Thanks Jashandeep.

The total capex excluding the ISP for the Konsari unit is around INR28,000 crores is what we have of which we have already spent, as I mentioned earlier is INR13,500- odd crores.

So that remains with the INR14,500 crores to be spent over the next 2 years.

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.

Jashandeep Chadha

Sir, largely copper capex will start from FY28, is that right?

And also on deleveraging or your sustainable net debt to EBITDA?

Rajesh Gupta

FY27 also, there will be copper investments.

Yes.

Moderator · Conference Operator

Thank you.

The next question is from the line of Ritesh Bhagwati from Alpha Plus Capital.

Ritesh Bhagwati

Thanks for taking my question and first of all, congrats on great set of numbers.

Firstly, it is in regards to our DRC assets.

So we saw our commercial production of 12,000 ton per annum copper cathode plant at Surya Mine got commissioned in March '26.

And plus we have done an acquisition of another 49% stake in Chemaf.

So what I want to, first of all, understand is how are we seeing this ramp-up of 10,000 tons per annum to 30,000 tons per annum happening?

So what is the time line for that?

Secondly, what I also want to understand is how are we seeing this integration of DRC assets happening and what sort of revenue and EBITDA contribution can we see in this financial year?

Moderator · Conference Operator

Thank you.

The next question is from the line of Stuti Agarwal from Chhatisgarh Investments..

Stuti Agarwal

Yes.

Firstly, congratulations for the team for the great set of numbers.

Sir, my first question is the receivables increased from INR171 crores to INR1,480 crores on a consolidated number that is 3.24x.

So is this from the Thriveni or from standalone mix?

Moderator · Conference Operator

Thank you.

The next question is from the line of Parth Kotak from Plus91 Asset Management.

Please go ahead.

Parth Kotak

Hi, thanks for taking mine and congratulations for a good set of numbers.

Sir, actually, I have a couple of questions.

The first one is an extension to the previous participant's question.

I understand that now since MDO is integrated with our operations, if you could just give a bit of colour on our receivable days and inventory days and payable days for the consolidated entity going ahead.

And second, sir, if you could just on an accounting side, provide the number for IPS benefit this year, it would be really helpful?

Rajesh Gupta

On the IPS benefits, basically, it is right now around 1 year in accrual, 1 year post the claim to be made.

The claim would be made in June. for the last year.

So we would get the money in June 2027 for current year.

We're trying to see how that can be expedited.

For the consolidated receivables data, I think this question is a very interesting question.

We don't have a clear cut answer on why exactly that movement is there.

We'll come back very shortly on that.

Riyaz Shaikh

In Thriveni, receivables is 15 to 30 days.

Rajesh Gupta

In Thriveni, the receivables are 15 to 30 days.

Riyaz Shaikh

Private miner owners, but in coal it is 15 days,

Rajesh Gupta

So we have to -- and so it is similar in Lloyd Metals.

We'll figure out exactly the reasoning behind it and come back.

Lloyds Metals and Energy Limited May 06, 2026

Moderator · Conference Operator

Thank you.

The next question is from the line of Amay Sharda from Purnartha Investment Advisors.

Amay sir could you please go ahead.

Since there is no reply from the line of Mr. Amay Sharda.

The next question which is from Harsh Shah from Seven Rivers Holding.

Please go ahead.

Harsh Shah

Yes.

Hi, good afternoon, sir.

Sir in your slide you have given a guidance of 26 million tons for FY27 production of iron ore.

Can you give us a split how much of this will be consumed internally for the downstream products, and what will be sold outside?

Rajesh Gupta

Around 8.85 million tons -- 8.8 million ton will be consumed internally for the pellet plant.

And the DRI plant another 200,000 tons.

So around 9 million tons will be consumed this year internally pellet plus DRI.

Part of the pellet could also be consumed internally is the steel -- in the DRI plant.

Harsh Shah

Thank you.

Moderator · Conference Operator

The next question is from the line of Siddharth Gadekar from Equirus Securities Limited.

Please go ahead.

Siddharth Gadekar

Sir, first on the Chemaf acquisition, can you just speak on the debt that we have acquired with that entity?

And how should one think about that?

Moderator · Conference Operator

Thank you.

The next question is from the line of from Netra Deshpande from Mirae Asset Sharekhan.

Please go ahead.

Netra Deshpande

Good evening sir.

Congratulations to you all for remarkable set of numbers, and metallic numbers for FY26. So to start with the first question, just would like to know, as have already said the estimated phase for the second cost and for the extending costs and what would be the timeline for that as the slurry pipeline for the project, the phase 1, the cost and already it was all clear in the earlier session.

So can you throw some light?

Riyaz Shaikh

We're not able to understand the thing -- can you please?

Netra Deshpande

So what would be Phase 2 cost of and the time line for the overall total project for the slurry pipeline, capacity of utilization and overall volume. total take up and ramping up.

Riyaz Shaikh

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.

Netra Deshpande

Okay.

And my next question is about what would be the revenue growth in terms of volume of iron ore and value-added products for FY27 and FY28?

Rajesh Gupta

There is no increase in volume.

This is the maximized volume that we have.

FY27 we just discussed.

FY28 our steel plant would be operational fully.

So we'll be having a production of 1 Lloyds Metals and Energy Limited May 06, 2026 million tons which is 75%, 80% of the capacity.

Plus the pellet plant would be producing at 8 million, 9 million tons.

So that will be the value added product range and relevantly DRI and pig iron etcetra would be also reproduced according to that.

Netra Deshpande

Okay.

Thank you.

And sir one more which is what would be the intersegment segment in terms of captive iron ore that they are using because after the exhibition as we can see that inter- segment revenue have ramped up.

It is somewhere around 4000 crores FY26. So what would be for Thriveni MDO intra-group dealing worth something for FY27 and if you can put some light because captive transfer of INR907 crores, which we can see the reflection in this?

Rajesh Gupta

I don't think we are ready with that exact figure that you're looking for.

We'll come back shortly on that.

Moderator · Conference Operator

Thank you.

The next question is from the line of Vedant Sarda from Nirmal Bang Securities Private Limited.

Please go ahead.

Vedant Sarda

Thank you for the opportunity and congratulations on great results.

Sir, we have guided 26 million ton of iron ore and double down on our pellet production and DRI production for FY'27.

So can you broadly tell us the revenue growth and EBITDA growth for FY27 on the current realization of iron ore?

Rajesh Gupta

I think the figures are all with you.

We leave it to the analysts to analyze and confirm the figures.

Moderator · Conference Operator

Thank you.

The next question is from the line of Tanmay Chaudhary from Dolat Capital.

Tanmay Chaudhary

Hi, sir.

Thank you for the opportunity.

Sir, my first question is on the logistics side like what are our evacuation plan through the pipeline and the trucks and railway siding and specifically for feeding our recently commenced pellet plant?

Rajesh Gupta

Your question is not very clear, sir.

Can you repeat it?

Tanmay Chaudhary

Yes, sir.

I'm asking on the evacuation plant to the pipeline and on the transport side, like for feeding our recently commenced pellet plant?

Rajesh Gupta

So the recently commissioned pellet plant is being fed by the pipeline that was commissioned around a year back.

The same pipeline is now feeding both the pellet plants that are commissioned.

This product is being evacuated either by truck or by -- from a railway siding, which is around 80 kilometers, 70 kilometers away.

That's as far the evacuation for the current pellet plant and material into the pellet plant is concerned.

Does it answer the question?

Moderator · Conference Operator

Sir the line has dropped.

Ladies and gentlemen, we take this as a last question.

I now hand the conference over to the management for closing comments.

Riyaz Shaikh

Thank you, everybody.

I guess we were able to reply to all your questions and queries.

Once again, thanks, everybody.

And if you have any further questions, you can get in touch with Mr. Chintan Mehta or myself so that we can give you all the further reply.

So thank you once again for participating and thank you, Equirus team for hosting us.

Lloyds Metals and Energy Limited May 06, 2026

Moderator · Conference Operator

Thank you.

On behalf of Equirus Securities Private Limited, that concludes this conference.

Thank you for joining us.

You may now disconnect your lines.

Questions and answers

“Lloyds Metals and Energy Limited

Moderator · Conference Operator

Thank you.

The first question is from the line of Amit Dixit from GS.

Please go ahead.

Amit Dixit

Yes, hi.

Good evening, everyone and congratulations for good performance.

A couple of questions from my side.

The first one is on Slide number 25, where you have this arrangement with Tata Steel on the BRPL project.

Just wanted to understand the economics of this because you have mentioned that the free cash and the profit accruing to us is quite substantial.

So just wanted to understand the capex part of it and how we are looking at operations to ensure that these kind of numbers in terms of free cash accrue to us?