Lloyds Metals and Energy: Forging Ahead with Record Performance and Strategic Integration in Q2 & H1 FY26

Lloyds Metals and Energy Limited (LMEL) has delivered a stellar performance in the second quarter and first half of fiscal year 2026, marking a period of significant operational milestones and robust financial growth. The company reported its highest-ever quarterly income, underscoring the success of its strategic initiatives and integrated operations. Total income for Q2 FY26 stood at INR 2,575.4 crore, a remarkable 75% year-on-year increase, while H1 FY26 saw total income reach INR 4,983.8 crore, up 28% year-on-year. This impressive growth was primarily fueled by higher iron ore dispatches, the successful commencement of pellet sales, and enhanced logistics through the newly commissioned slurry pipeline.

The company’s profitability also saw a substantial boost, with EBITDA for Q2 FY26 increasing by 95% year-on-year. EBITDA margins expanded significantly, reaching 33.75% in Q2 FY26 (a 349 basis points increase YoY) and 33.67% in H1 FY26 (a 363 basis points increase YoY). This margin expansion is a direct result of a better value-added product mix, particularly from pellet sales, and the operational efficiencies gained from the slurry pipeline. Profit After Tax (PAT) for Q2 FY26 was INR 605.6 crore, and for H1 FY26, it reached INR 1,240.2 crore, demonstrating a strong bottom-line performance.

Operational Excellence and Strategic Projects

LMEL’s operational performance was robust across its key segments. Iron ore production volume for Q2 FY26 stood at 3.42 million tons and 7.38 million tons for H1 FY26, representing a growth of 77% and 24% year-on-year, respectively. Sales volumes also grew by 10% in Q2 FY26 and 26% in H1 FY26. The realization per tonne for iron ore was INR 5,571 in Q2 FY26 and INR 5,856 in H1 FY26, showing stable growth.

The newly commissioned pellet plant at Konsari has been a significant success story. It began commercial production at the end of Q1 FY26 and achieved 100% capacity utilization by October 2025, within just four months of operation. Pellet production for Q2 FY26 was 0.78 million tons, with a strong realization of INR 9,916 per tonne and an EBITDA of INR 5,039 per tonne. This robust performance is largely due to the slurry pipeline and captive ore supply, ensuring cost efficiency and strong margins.

In the DRI and Power segment, DRI sales volumes for Q2 FY26 and H1 FY26 were 88.2 kilotons and 167.1 kilotons, respectively, showing a 4% year-on-year increase. While realizations were muted due to market softness, lower fuel costs helped maintain operating profitability. The company also commissioned its DRI expansion project in Ghugus during Q2 FY26, which is expected to contribute to higher output in H2 FY26.

Driving Growth Through Integration and Sustainability

LMEL’s strategic vision is centered on building world-class assets and revolutionizing iron ore mining and beneficiation. The company’s acquisition of an 80% stake in Thriveni MDO Operations for INR 70 crore is a testament to this strategy. This backward integration is expected to boost mining business margins by 10-15% on a consolidated basis, enable end-to-end MDO contracts, and provide access to the international mining industry. The company is also investing in renewable energy to secure 100 MW of power for captive consumption and optimize power trading, aiming for total savings of over INR 20,000 crore (USD 2.4 billion) over 10 years on a consolidated basis.

In line with its commitment to sustainable business practices, LMEL is actively pursuing various ESG initiatives. These include green mining practices, deployment of electrical mining equipment, and establishing an EV and LNG ecosystem at Surjagarh mines. The company’s CSR arm, Lloyds Infinite Foundation, is dedicated to community development, with over $8.3 million invested in FY25. Recent initiatives include the acquisition of a 20% equity stake in LT Gondwana Skill Hub Private Limited to promote skill development and employment for the tribal community in Gadchiroli.

Outlook and Future Prospects

Looking ahead, LMEL is confident in sustaining its momentum. The company expects its FY26 EBITDA to be in the range of INR 2,000-2,200 crore and targets iron ore dispatches of 20-22 million tons. The total capacity for its pellet plants is projected to reach 12 million tons with all three lines. The third pellet plant is expected to be commissioned around FY28-FY29, coinciding with the third phase of the beneficiation plant. The first unit of the BHQ plant is anticipated by Q4 FY27, with plans for 3 units of 15 million tons input each.

Despite challenges such as market softness in the DRI segment and an ongoing legal dispute with NTPC, LMEL’s integrated operations, disciplined capital allocation, and strong focus on value-added products and cost optimization position it for continued growth and resilience in the dynamic metals and energy sector. The company remains committed to creating a business at a structurally low cost, fully integrated, and environmentally responsible, delivering sustainable shareholder value.