Nomura rates Lloyds Metals 'Buy' on initiation; sees 40% upside potential

Lloyds Metals and Energy is transitioning from a pure-play miner to a more stable, diversified and less cyclical business, Nomura said.

The Tokyo-headquartered brokerage, Nomura, initiated coverage on Lloyds Metals and Energy with a ‘Buy’ rating and a target price of ₹1,600, implying an upside potential of more than 40 per cent. The company is transitioning into an integrated steel producer with a diversified revenue base, which makes the case for a ‘meaningful upside’, according to Nomura.

 

The brokerage expects Lloyds Metals and Energy to generate consolidated earnings before interest, taxes, depreciation, and amortisation (Ebitda) of ₹10,900 crore by the financial year 2028. This represents a significant leap from the ₹1,900 crore estimated for the financial year 2025, reflecting a compound annual growth rate (CAGR) of 77 per cent. 

 

 

As of 9:20 AM, Lloyds Metals and Energy share price was trading 2.9 per cent higher at ₹1,193 per share on the National Stock Exchange (NSE). The scrip was seen outperforming the Nifty 50 index, which was up 0.55 per cent. 

 

Vertical integration

Lloyds Metals and Energy is setting up fully integrated steel facilities at Ghughus and Konsari, with an aim to develop Gadchiroli–Chandrapur as a steel hub in Western India. It plans to commission the steel facilities during the financial years 2027 and 2029, Nomura said.

 

The brokerage believes that profitability will likely improve as Lloyds Metals and Energy may leverage low-cost iron ore, along with a focus on value-added products and cost efficiencies.

 

Long-term access to high-grade, low-cost iron ore

Lloyds Metals and Energy has long-term access to high-grade, low-cost iron ore until 2057 through the Surjagarh mine, which is allocated without an auction premium. This has given the company a unique competitive advantage, Nomura said.

 

Surjagarh is Maharashtra’s sole iron ore mine, which holds 157 million tons (MT) of extractable reserves and 701 MT of branded hematite quartzite (BHQ), featuring a low silica-alumina profile that supports structural cost advantages, according to the brokerage.   CHECK Stock Market LIVE Updates 

Earning stability

 

Lloyds Metals and Energy has ensured overall earnings predictability with its acquisition of 79.82 per cent stake in Thriveni Earthmovers and Infra in July 2025. Thriveni Earthmovers and Inra have an annuity-like contract model, which limits exposure to volatility in commodity prices, Nomura said. 

 

The brokerage estimates Thriveni Earthmovers and Infra may contribute 20 per cent of consolidated Ebitda by the financial year 2028. 

 

Global resource diversification

 

Lloyds Metals and Energy’s copper business provides resource diversification through its wholly-owned subsidiary, Lloyds Global Resources FZCO, according to Nomura. The miner acquired a 50 per cent stake in Nexus Holdco FZCO, which gives exposure to copper and multi-mineral assets in the Democratic Republic of Congo (DRC). 

 

This transaction has improved the geographic and commodity diversification. Nomura estimates the acquisition to be earnings accretive, with an estimated ₹490 crore Ebitda by financial year 2028.

 

Key risks

 

The key downside risks to Nomura’s projections for Lloyds Metals and Energy include execution delay in steel capacity, geopolitical instability in the Democratic Republic of Congo, BHQ beneficiation not yielding the same results as seen in the pilot project, and resurfacing of Naxal activities.

 

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