LLOYDSME - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:15 pm

Fundamental Rating: 4.1

📊 Core Financials

• Quarterly PAT at ₹606 Cr. vs ₹635 Cr. shows slight decline, but YoY profit variation is +101%.
• ROCE at 38.3% and ROE at 31.5% indicate excellent efficiency and profitability.
• Debt-to-equity ratio at 0.25 reflects manageable leverage and strong balance sheet health.
• EPS at ₹35.0 highlights solid earnings power.

💹 Valuation Indicators

• P/E Ratio: 37.6 (above industry PE of 20.0, suggesting premium valuation).
• P/B Ratio: ~8.8 (CMP ₹1,302 / Book Value ₹148).
• PEG Ratio: 0.33 (attractive, highlighting undervaluation relative to growth).
• Intrinsic Value: CMP is slightly above fair value, but growth prospects provide margin of safety.

🏢 Business Model & Competitive Advantage

• Lloyds Metals & Energy operates in iron ore mining, sponge iron, and steel production.
• Competitive advantage lies in integrated operations, resource ownership, and strong demand outlook in steel sector.
• Exposure to infrastructure and industrial growth supports long-term sustainability.

📈 Entry Zone & Long-Term Guidance

• Entry Zone: Attractive near ₹1,150–₹1,250 (close to DMA 200 at ₹1,280 and below CMP).
• Long-Term Holding: Suitable for investors seeking steel and mining exposure, with strong fundamentals and growth potential.

✅ Positive

• Exceptional ROCE (38.3%) and ROE (31.5%) highlight efficiency.
• PEG ratio at 0.33 indicates undervaluation relative to growth.
• DII holdings increased (+0.03%), reflecting domestic investor confidence.
• Strong YoY profit growth (+101%).

⚠️ Limitation

• P/E ratio (37.6) is significantly above industry average (20.0).
• Dividend yield at 0.08% is negligible, limiting income appeal.
• Quarterly PAT declined slightly from ₹635 Cr. to ₹606 Cr.

📉 Company Negative News

• FII holdings reduced (-0.12%), showing cautious foreign sentiment.
• Stock trading close to 52-week high (₹1,613), limiting immediate upside potential.

📈 Company Positive News

• Strong YoY profit growth (+101%).
• DII holdings increased slightly, showing domestic support.
• Strong demand outlook in steel and mining sectors.

🏭 Industry

• Steel and mining industry benefits from infrastructure growth, industrial demand, and government spending.
• Industry PE at 20.0, showing Lloyds Metals trades at a premium to peers.

🔎 Conclusion

Lloyds Metals & Energy demonstrates strong fundamentals with high ROCE, ROE, and robust profit growth. However, valuations are stretched with a P/E above industry average, and dividend yield remains negligible. Entry is advisable near ₹1,150–₹1,250 for better risk-reward. Long-term investors may benefit from steel sector growth and Lloyds’ integrated operations, though cautious accumulation is recommended due to premium valuations and slight quarterly profit decline.