Stock of this iron & steel company has zoomed over 1,300% in one year

Shares of Lloyds Metals & Energy hit the upper circuit for the fourth straight day, up 5 per cent at Rs 183.30 on the BSE in Tuesday’s trade. It has surged 24 per cent in past one week, compared to 3 per cent fall in the S&P BSE Sensex during this period. The stock of this iron & steel products company is currently trading at its highest level on the BSE.

The trading volumes have more than doubled, with 323,000 shares changing hands on the BSE till 11:30 am, as against an average of less than 150,000 shares that were traded daily in past two weeks.

In the past one year, the market price of Lloyds Metals has zoomed 1,301 per cent - from level of Rs 13 to Rs 183.3 now - on improved operational performance. The S&P BSE Sensex has rallied 22 per cent during the same period.

For the first nine months ended December 2021 (9MFY22), Lloyds Metals had reported a consolidated operating profit of Rs 25.30 crore against operational loss of Rs 5.22 crore in 9MFY21. Revenue from operations had more than doubled to Rs 364 crore from Rs 158 crore during the same period last fiscal.

The company has two separate business segments -- manufacturing of sponge iron, and generation of power. The sponge iron sector is linked to the steel sector in such a way that a rise in demand for steel would increase the demand for sponge iron. The various sectors that are expected to contribute to the growing demand include infrastructure, roads, railways, bridges, airports, industrial plants, buildings, automobiles, etc.

In the FY21 annual report, the company management had said that the upward trend is expected to continue on account of fiscal measures taken by the Government such as infusion of funds for development of infrastructure sector, introduction of stimulus packages for revival of industry besides factors like increase in consumption and production of steel, upcoming infrastructure and Greenfield projects, stabilization of prices etc.