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LLOYDSME - Fundamental Analysis: Financial Health & Valuation
Last Updated Time : 05 Nov 25, 7:43 am
Back to Fundamental ListFundamental Rating: 4.3
📊 Financial Overview
- Profitability: PAT surged to ₹635 Cr from ₹202 Cr QoQ, with a healthy profit variation of 13.8%. EPS stands at ₹29.2.
- Return Metrics: ROE at 31.5% and ROCE at 38.3% reflect excellent capital efficiency and operational strength.
- Valuation: P/E of 44.9 is above the industry average (22.7), indicating premium valuation, though justified by growth.
- P/B Ratio: With a book value of ₹122 and price of ₹1,303, the P/B ratio is ~10.7, suggesting a high valuation multiple.
- PEG Ratio: 0.40 signals strong earnings growth relative to valuation, indicating potential undervaluation.
- Debt Profile: Debt-to-equity ratio of 0.12 shows prudent financial management and low leverage.
- Momentum: RSI at 46.1 and MACD at -0.23 suggest neutral sentiment with potential for technical rebound.
🏢 Business Model & Competitive Edge
- Lloyds Metals & Energy operates in the mining and sponge iron segment with integrated operations across iron ore extraction and steel production.
- Backward integration, captive resources, and cost-efficient operations provide a strong competitive moat.
- Strategic expansion into value-added steel and green energy initiatives enhances long-term growth visibility.
💡 Entry Zone Recommendation
- Current price is slightly below DMA 50 (₹1,333) and near DMA 200 (₹1,287), indicating a consolidation phase.
- Suggested Entry Zone: ₹1,250–₹1,290 for accumulation on dips.
- Long-term holding is favorable given strong fundamentals and sectoral tailwinds.
✅ Positive
- Exceptional ROE and ROCE highlight operational excellence.
- Strong earnings growth with a low PEG ratio indicates undervaluation.
- Low debt-to-equity ratio enhances financial resilience.
⚠️ Limitation
- High P/E and P/B ratios suggest valuation caution.
- Modest dividend yield of 0.08% may not appeal to income-focused investors.
- MACD in negative territory reflects weak short-term momentum.
📉 Company Negative News
- FII holdings declined by 0.12%, indicating cautious foreign sentiment.
- Stock has corrected ~19% from its 52-week high of ₹1,613.
📈 Company Positive News
- Strong quarterly earnings and margin expansion.
- DII holdings increased by 0.03%, reflecting growing domestic institutional interest.
🏭 Industry
- Metals and mining sector benefits from infrastructure growth, industrial demand, and government capex initiatives.
- Industry P/E of 22.7 supports moderate valuation for high-growth players.
🧾 Conclusion
- Lloyds Metals & Energy is a fundamentally strong player in the metals sector with robust profitability and growth momentum.
- Entry near ₹1,250–₹1,290 offers a compelling long-term opportunity, especially for growth-focused investors.
- Monitor institutional flows and commodity price trends for sustained performance.
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