Lloyds Metals hits new high on robust Q3 results; stock up 67% in 2 months

Shares of Lloyds Metals and Energy rallied 5 per cent to hit a new high of Rs 289.95 in Monday’s intra-day trade, after the company reported a robust set of earnings. The company recorded its highest ever quarterly revenues of Rs 1,029 crore in the December quarter (Q3FY23) from Rs 171 crore in Q3FY22.

The company said that the revenue growth in Q3FY23 was driven by volume and price growth in both sponge iron and iron ore. However, with 30 per cent larger volumes, iron ore took the lead in momentum.

Besides, the company posted consolidated profit after tax of Rs 230 crore during the quarter, as against net loss of Rs 26 crore in Q3FY22. Earnings before interest, taxes, depreciation, and amortization (ebitda) margin, too, improved 435 bps to 24.94 per cent from 20.55 per cent, in a year ago quarter.

DRI (direct reduced iron) production and sales remain buoyant and stable for Q3FY23. The company reported higher production as capacity utilisation jumped nearly 90 per cent against an average of 75 per cent.

"We have been progressing well in terms of approvals & procedures required for expanding the mining capacity to 10 MTPA. The company has applied for all necessary approvals and is awaiting Final EC clearance," the company said.

The company’s Q3FY23 performance was backed by solid execution, improvement in demand and favourable product mix on the iron ore front. Along with robust mining performance, the sponge iron & power segment, too, demonstrated solid performance.

The company mined its annual rated capacity of 3 million tonnes of iron ore in 9MFY23 and dispatched 4.48 million tonnes.

"The upcoming 72,000 tonnes of sponge iron capacities are progressing well and are expected to add significantly to the company’s revenue in FY24. The company remains strongly poised for higher highs as it scales up mining output and higher sponge production. The company remains debt free and shall continue to remain so, as we plan to undertake projects majorly from internal accruals," the company added.

In the past two months, the stock price of Lloyds Metals zoomed 67 per cent. In the past one month, it rallied 40 per cent, as compared to 1.8 per cent rise in the S&P BSE Sensex.

On December 13, 2022, the Maharashtra State's cabinet sub-committee on industries cleared 13 projects worth Rs 70,000 crore, including as many as three large projects worth Rs 35,520 crore, that will come up in Gadchiroli and Chandrapur districts. Of this, it has cleared a project worth Rs 20,000 crore by Lloyds Metals and Energy. The company had clarified that these approvals are preliminary and require a series of regulatory and internal approvals.