The average target price of LLOYDSME.NS is 1579 and suggests 6% upside potential. Usually, this means a HOLD recommendation among investment firms. This neutral recommendation suggests no significant price movement, up or down, in the next 12 months. The most optimistic analyst has a target price of 1905.0. This translates into 28% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 1570.0. This suggests 5% upside potential. Even the most pessimistic analyst believes there will be stock growth. 

Lloyds Metals and Energy Limited manufactures and sells sponge iron products in India. The company operates in three segments, Sponge Iron, Power, and Mining. It also offers direct sponge iron; and by-products, such as char, fly ash, ESP dust, bed materials, and iron ore fines. The company is involved in the generation and distribution of power. Lloyds Metals and Energy Limited was incorporated in 1977 and is based in Mumbai, India.

India

Lloyds Metals and Energy Limited

Basic Materials

The company pays dividends on rare occasions. There have only been a few years with dividend payments in the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are unclear. In the past 12 months, the dividend yield has barely been above zero and was substantially below that of its peers. 

LLOYDSME.NS reported revenue of INR 66 458mn in the last 12 months, down 5% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 5% from FY24 to INR 28.40. Market expects EPS to reach INR 32.57 in FY25.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Within the past six months, its performance has trailed this peer group's by 6ppts and its growth decelerated by 3ppts in the past month. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The company has reported good EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 29.5% in the last 12 months, a decline from 30.9% in FY24. 

Historically, LLOYDSME.NS has reported very strong net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 21.8%, a growth from 21.8% in FY24. 

Another important profitability metric, return on assets (RoA), amounted to 15.4% in the last 12 months, a decrease from 22.8% in FY24. The market analysts predict that RoA will be 16.6% in FY25, again stronger than its peers. 

In the last 12 months, the return on capital employed (RoCE) declined to 19.9%, above the peers. The consensus estimate for FY25 for RoCE is 29.8%, again ahead of the peers. 

Lloyds Metals and Energy Limited reported a return on equity (RoE) of 22.6% in the last 12 months, down from 33.1% in FY24. The market consensus projects an RoE of 24.5% in FY25, again ahead of its peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 6.3 in the past several years. This ratio implies a excellent shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are close to minimal. In combination with rigorous business standards, shareholder rights are well protected.

LLOYDSME.NS has average trading liquidity. The average private investor can sell his common position in the stock almost immediately. Liquidity is usually quite stable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. 

No other major risks have been identified.

The risk of default is moderate. We note resilient historical revenue growth, robust profitability, solid return on capital, strong debt servicing capacity, adequate interest coverage, solid cash flow generation, and an favourable capital structure, among the positive credit factors. Among the negative credit factors and we point to weak positions in its industry, poor working capital management.

In highly turbulent market conditions, LLOYDSME.NS is not volatile. In other words, the stock will fall far less than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be very low. 

In normal market circumstances, LLOYDSME.NS is not overly volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will remain relatively stable. The stock's losses on its worst days (less than 1-5% of the time) will range from very low to minimal. We would also like to highlight the minimal intraday volatility of the instrument. 

Based on key historical and expected multiples, the stock is greatly overvalued relative to its peers. Specifically, the stock is fairly valued on P/E, overvalued on EV/EBITD. 

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Lloyds Metals and Energy Limited

₹ 1488.9

4

Lloyds Metals and Energy Limited

₹ 1488.9

4

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

₹ 1488.9

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