💰 Financial Performance

Revenue Growth by Segment

Iron Ore revenue grew 14.5% YoY to INR 34,649 Mn in H1-FY26. Value Added Products (VAP) revenue surged 75.2% YoY to INR 15,189 Mn in H1-FY26. Total consolidated income for H1-FY26 reached INR 61,185 Mn, a 57.2% increase compared to H1-FY25.

Geographic Revenue Split

The company is expanding its presence across Eastern and Central India through strategic acquisitions like MRPPL and BRPL. Specific regional percentage splits are not disclosed, but the focus is on domestic steel belts and export pellet markets.

Profitability Margins

Operating margins have shown a steady upward trend: 27.09% in FY24, 29.59% in FY25, and reaching 31.40% in H1-FY26. PAT margins stood at 19.76% for H1-FY26, slightly down from 22.06% in H1-FY25 due to higher finance and depreciation costs from recent acquisitions.

EBITDA Margin

Consolidated EBITDA margin was 31.40% in H1-FY26, up 136 bps YoY. Standalone EBITDA margins reached 33.75% in Q2-FY26, driven by higher iron-ore dispatches and the commencement of pellet sales which offer higher value addition.

Capital Expenditure

The company invested INR 2,400 Cr in H1-FY26. Planned capex for the full year FY26 is INR 4,500-5,000 Cr, with a further INR 6,000-6,500 Cr projected annually for the next two years to fund greenfield steel plants and mining infrastructure.

Credit Rating & Borrowing

Credit ratings are sensitive to maintaining a net debt/EBITDA ratio below 1.0-1.2x. Borrowing costs increased significantly with finance costs rising from INR 55 Mn in H1-FY25 to INR 1,904 Mn in H1-FY26 following the debt-funded acquisition of TEIPL.

⚙️ Operational Drivers

Raw Materials

Iron Ore (primary mineral), Coal (for DRI and power), and Pellets (intermediate product). Iron ore mining is the core driver, with sales reaching 5.92 MMT in H1-FY26.

Import Sources

Primary sourcing is domestic, specifically from the Surjagarh mines in Maharashtra and coal operations in Odisha (PB West). The company is also exploring global resources through a 50% stake in Nexus Holdco FZCO.

Key Suppliers

Thriveni Earthmovers (TEIPL) is the primary MDO partner, now integrated as a subsidiary. The company also entered an MoU with Tata Steel for raw material mining and logistics cooperation.

Capacity Expansion

Iron ore sales grew from 5.37 MMT in H1-FY25 to 5.92 MMT in H1-FY26. Pellet sales commenced reaching 0.69 MMT. The company is scaling towards a 26 million ton environmental clearance (EC) capacity for iron ore.

Raw Material Costs

Integration of MDO operations is expected to save INR 400-500 per tonne in mining costs. Total operating expenses for H1-FY26 were INR 41,975 Mn, representing approximately 68.6% of total income.

Manufacturing Efficiency

The company achieved a record coal production of 70,000 tons in a single day at the PB West site. Slurry pipeline usage has improved logistics efficiency and supported higher revenue dispatches.

Logistics & Distribution

Logistics are being optimized through the slurry pipeline and strategic MoUs (e.g., with Tata Steel) to handle increased volumes from the Surjagarh mines efficiently.

📈 Strategic Growth

Expected Growth Rate

20%

Growth Strategy

Growth is driven by the integration of Thriveni’s MDO operations to capture margins, expanding pellet production capacity, and transitioning into a 'low-cost' steel producer. Strategic acquisitions like the 80% stake in TEIPL and the MoU with Tata Steel for raw materials and pellets are central to this strategy.

Products & Services

Iron Ore, Pellets, DRI (Sponge Iron), and Power.

Brand Portfolio

Lloyds Metals and Energy Limited (LMEL).

New Products/Services

Commencement of pellet sales contributed significantly to the 75% YoY revenue growth in the standalone business for Q2-FY26.

Market Expansion

Expansion into Eastern and Central India steel belts through the acquisition of stakes in MRPPL and BRPL for INR 14.95 Bn.

Market Share & Ranking

The company's PB West coal mine secured 1st place among 328 participating mines in India for operational excellence.

Strategic Alliances

Non-binding MoU with Tata Steel Limited (Dec 2025) for cooperation in mining, logistics, and steel making; partnership with Thriveni Earthmovers for MDO operations.

🌍 External Factors

Industry Trends

The industry is shifting toward cleaner technologies to meet environmental standards. LMEL is positioning itself as an integrated player with direct control over its raw material supply chain to maintain a competitive cost structure.

Competitive Landscape

Key competitors include major domestic steel and mining firms; LMEL competes by integrating mining, logistics (slurry pipeline), and value-added production.

Competitive Moat

The primary moat is cost leadership derived from captive iron ore mines (Surjagarh) and integrated MDO operations, which provide a sustainable cost advantage of INR 400-500/tonne over non-integrated competitors.

Macro Economic Sensitivity

Highly sensitive to the global steel cycle; however, the company is building a resilient business model to minimize impact from steel price volatility.

Consumer Behavior

Demand is driven by industrial infrastructure growth and the domestic steel consumption cycle in India.

Geopolitical Risks

Global geopolitical tensions and trade restrictions are identified as threats to the supply chain and raw material costs.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to environmental clearances (EC) for mining volumes and pollution norms for steel and power plants. The company recently received an expanded EC for its mines in June 2025.

Environmental Compliance

The company faces increased operational costs to meet environmental standards and invest in cleaner technologies. Non-compliance risks include fines and operational disruptions.

Taxation Policy Impact

The effective tax rate for H1-FY26 was approximately 21.1% (INR 3,243 Mn tax on INR 15,333 Mn PBT).

Legal Contingencies

The company sought shareholder approval to ratify and waive the recovery of excess remuneration paid to Directors, indicating past regulatory oversight issues.

⚠️ Risk Analysis

Key Uncertainties

Slower-than-expected ramp-up of projects and any adverse regulatory changes impacting mining licenses are the primary uncertainties that could lead to net debt/EBITDA exceeding 1.2x.

Geographic Concentration Risk

Heavy concentration in Maharashtra (Surjagarh mines) and Odisha, though acquisitions are diversifying the footprint into other steel belts.

Third Party Dependencies

While MDO is now integrated, the company still relies on related party transactions, such as an annual limit of INR 2,000 Cr with Lloyds Engineering Works Limited.

Technology Obsolescence Risk

The company is mitigating technology risk by investing in modern logistics like slurry pipelines and cleaner steel-making processes.

Credit & Counterparty Risk

Trade receivables increased significantly to INR 14,541 Mn in H1-FY26 from INR 1,714 Mn in FY24, suggesting a need for rigorous credit monitoring as the business scales.