Lloyds Metals shares surge over 10%, most in three years, as margins expand in a strong Q3

Shares of Lloyds Metals and Energy Ltd. are up over 10% on Wednesday, February 4, after it reported a positive set of earnings for the third quarter. This is the biggest single-day gain for the stock since April 2023.

Its operational performance during the December quarter was aided by:

• Enhanced Environmental Clearance limits for iron ore, faster ramp up of pellet plant and improved sponge iron volumes.


• Slurry pipeline also aided seamlessly evacuation of iron ore, making company's assets sweat more efficiently.


• Company commenced its operations of Direct Reduced-Iron business expansion the third quarter.


• Higher value-added products like pellets and the commencement of the slurry pipeline led to robust margins.

Llyod Metals' margins expanded to 34.8% from 32%  in the year-ago period. Its profit after tax increased 180% to ₹1,089.56 crore from ₹389.29 crore in the previous year.

The company's earnings before interest, tax (EBIT) increased 36% for mining annually and 55% sequentially, while for sponge iron it was up 1,427% from the previous year and 57% from the previous quarter to ₹583 crore.

Lloyds metals has also approved the pellet capacity expansion at Konsari to 10 MTPA. The same is to be completed by the end of the financial year 2027.

Guidance

Division	FY26 Guidance	FY27 Guidance
Iron ore production	20-22 million tonne	25-26 million tonne
Pellet production	2.8-3 million tonne	6-8 million tonne
DRI Production	450-550kT	700kT
Steel (WRM) Production	N/A	0.15-0.2 million tonne

Shares of Lloyds Metals and Engineering are trading with gains of 10.1% at ₹1,286.7 on Wednesday. It has declined 12.7% in the last six months.

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